In 1991, the University created the Endowment Investment Pool (Pool). At that time, the University’s Board to Trustees (Board) required that all subsequently established endowments must be invested in the Pool. For endowments in existence when the Pool was created, participation in the Pool was optional and departments had to request that their endowments participate in the Pool. The Board strongly encouraged departments to invest existing endowments in the pool, even if done so over a period of time. Currently, there are approximately 1,500 endowments and only about 25 are not invested in the Pool.
The unit market price of the Pool is believed to be near a low point in this market cycle. Therefore, now would be a great time to have those endowments which are not currently invested in the Pool to participate. All departments should review the Management Reports for their endowments (Activities in Funds 8500 and 8700). If they have amounts only in Claim on Cash (Account 10500) and Fund Balance (Account 30000), they should immediately request that those endowments be invested in the Pool.
Endowments not invested in the Pool are not growing in value, thus not protecting their purchasing power for the future. They are only receiving interest at an annual rate of approximately 2%. That rate has been lower and, in this market cycle, it possibly may go lower again. The Endowment Investment Pool has a 4% annual total return spending policy which enables more funds to be credited to the endowment’s expendable to use for the purposes of the endowment.
To invest these older endowments in the Endowment Investment Pool, please send your request to David Heaps, in Financial Reporting & Accounting, at David.Heaps@admin.utah.edu.
Let’s get those endowments in the Pool and get them earning more and growing for your department!
