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Endowments
An endowment is a donation made to the University with the understanding that the “capital” or “principal” amount of the donation will be invested in perpetuity. The principal is invested and only the earnings are spent via what is called a spending allowance.
Key Criteria for Establishing an Endowment
To establish an endowment, we require a letter from the donor(s) stating that they want the contribution to be an endowment and the restricted use of the investment income. Also, the University requires a minimum principal value contribution of $50,000. If that contribution is spread over multiple payments, a signed contribution schedule is required for the account to be considered an endowment.
If a contribution meets the requirements to become an endowment, the following steps should be followed:
- Send all copies of signed donor documentation and a copy of the check (or other means of payment) to Allison Timpe, Senior Accountant, located at Hughes Administration Center 335 (HC335).
- Submit the completed ‘Request for New Account’ form along with documentation in Step 1.
- Send actual check (or other means of payment) and original documentation to Jeff Shin in Information Management, located in Degheri Alumni Center 312 (DAC312).
Please allow 3 business days upon receipt of all information, for proper account set-up. Once completed, a new account memo will be emailed to all involved parties.
The spending allowance represents the available “budget” for an endowment during the fiscal year. Spending allowances will be calculated in the spring before the beginning of each new fiscal year. A schedule will be forwarded to the President, Vices Presidents, the Deans of each school, and other involved departments by March 31st. The approved amount is uploaded to Oracle by June 30, before the new fiscal year.
A transfer of expenses from one account to another can be accomplished as long as it is reasonable and justified. A Journal Entry Request form can be submitted along with supporting documentation to Allison Timpe in Hughes Administration Center 335 (HC335) or via email at timpe@sandiego.edu.
Questions regarding any of this information can be directed to the following:
Allison Timpe, Senior Accountant x-4398 timpe@sandiego.edu
Katy Roig, Assistant Controller x-7404 kroig@sandiego.edu
You can also reference the Endowment Policies and Procedures.
FREQUENTLY ASKED QUESTIONS (FAQs)
How is the Spending Allowance calculated?
The University’s spending allowance rate is currently set at 4% of the trailing 3-years average of the endowment’s fair market value (FMV). FMV is the sum of the endowment principal, and the accumulated realized and unrealized earnings.
How much does the endowment earn each year?
There is no set amount that an endowment earns each year. The amount earned is based on market fluctuations and cannot be determined in advance. For more information on investments or earnings, contact Joan Wolf at x4683 or wolfj@sandiego.edu.
