Endowments at Oklahoma City University
Gifts for immediate needs are vital and always welcome. But there is another way to support the university which while providing for immediate needs, also insures its future well-being. An endowment fund is established with cash, securities or other assets through an outright gift, or through an estate gift. In most cases, unless otherwise instructed by the donor, the fund is permanently restricted in an invested account and only the income from the fund is spent, insuring that your gift will continue to make a difference in perpetuity.
Specifying the Purpose of Your Gift
When you establish an endowment at Oklahoma City University, you decide how the funds will be used. For example, many donors choose to direct their endowments toward student scholarships or faculty chairs or professorships, sustain an on-going program, or provide a fund for changing areas of greatest need.
Others choose to endow their annual gift. As annual giving is the lifeblood of any non-profit organization, the ability to count on your gift each year makes it possible for us to carry out our mission. Through an endowment designated for the annual fund, you can continue to support the university in a meaningful and reliable way even after your death.
The purpose of your endowment gift is up to you, but we do request that you consult with us in advance to make certain we will be capable of meeting the conditions of your gift. Generally, we will prepare an “Endowment Agreement” between you and OCU which specifies the terms of your gift. If you should change your mind about how you want the gift used, the agreement may be amended, but it does serve to insure your wishes are known and met, now and into the future.
Naming an Endowment Fund
In creating an endowment, you have the opportunity to attach your name or the name of something special to you to the project, program, scholarship, or other item to be funded. This enables us to honor and remember you or a loved one far into the future. Your gift becomes a lasting tribute and establishes a permanent link between the past and the future of Oklahoma City University.
If you are considering a memorial gift, please let us know. We will be happy to work with you.
Minimum Endowment Amount
A minimum gift of $25,000 is required to establish an endowment; however, this amount may be pledged and paid over a five-year period. Until the fund reaches $25,000, all earnings are reinvested in the fund and no awards will be made.
How to Get Started
Once you have decided to create an endowment, you can achieve your goal through several methods – the choice is yours. Please contact Judy Reyes-Henderson in the Office of University Advancement at firstname.lastname@example.org or 405-208-7000. We can answer your questions and get you started – without obligation. Working with you and your financial advisers, we’ll help you determine if an endowment fund at Oklahoma City University meets your philanthropic goals.
Why are endowments important to OCU?
An endowment creates financial stability, allowing OCU to be less dependent on unpredictable sources of revenue. The base of resources from endowments represent a rich variety of activities such as scholarships and fellowships for talented students, support for distinguished and dedicated faculty members through professorships and chairs, support for the library or support for other programs.
What is an endowment?
An endowment is a long-term investment in OCU that provides benefits to students, faculty or programs year after year, generation after generation.
An endowment is a fund made up of gifts (including will bequests) that are subject to a donor requirement that corpus be maintained and invested to create a stream of income. Only a portion of the average investment earnings is expended to carry out the specified purpose of the endowment. To guard against the eroding consequences of inflation, the remaining portion of investment return is reinvested to help ensure that the endowment maintains its purchasing power over time to support future generations.
What is corpus?
Corpus typically refers to total donor gifts to an endowment.
What is endowment principal?
Sometimes the terms principal and corpus are used interchangeably, and on occasion, principal can be used to refer to corpus as well as excess returns not needed for spending and returned to principal.
What is the difference between a quasi endowment and a true endowment?
A true endowment is one created by an external donor that requires maintenance of the corpus. A quasi endowment is one that has been established by an internal board or administrative unit that may be fully expended or unendowed by that internal board or administrative unit.
How are endowment investments managed at OCU?
The University’s endowments consist of individual donor-restricted funds which are managed and controlled by the University. The University also has endowment funds which are held and managed by others (see below).
Most endowments are invested with the Oklahoma United Methodist Foundation (“OUMF”). These assets are to be held in perpetuity by OUMF for the benefit of the University. The University receives distributions from the income earned by the trusts, which is generally restricted for scholarship purposes.
The University previously made transfers to the Oklahoma City Community Foundation, Inc. (“OCCF”), for which the University has specified itself as the beneficiary of the funds. Annually, distributions from the funds are paid to the University according to OCCF’s spending policy.
In addition to the funds discussed above, OCCF maintains other funds that have been contributed by various donors to OCCF for the benefit of the University. These funds are not included as assets of the University, but earnings from these funds are paid to the University each year.
What is the spending policy for endowments?
The amount that can be spent each year from endowments is established by the Board of Trustees. The current policy calls for quarterly distributions of 5% (on an annualized basis) of the average market value of the fund for the trailing three years on a rolling basis. The spending policy is reviewed at least annually or more often, as needed, and may be changed at any time.
Investments held and managed by OUMF and OCCF for the benefit of OCU are subject to their spending policies.
What happens to any “excess returns” in the endowment?
Earnings beyond the amount needed for spending are referred to as “excess returns” and are added back to principal and reinvested in the long-term pool to promote growth and protect against inflation for future programs.
How soon will new endowments start to spend for their intended purposes?
If the endowment agreement prohibits spending of corpus, new endowments may begin spending after accumulated investment earnings are sufficient to fund a spending budget, subject to the annual computation date for endowment spending budgets of June 30th. According to the OCU Investment Committee’s policy, it takes at least one full year of investment before earnings may be expended from a new endowment.
What is an “underwater” endowment?
This is an endowment that, through declining market performance has used all accumulated earnings and appreciation and has eroded the original gift value, or corpus. The market value of an underwater endowment is less than the corpus.
What is the minimum amount for establishment of an endowment?
The University’s minimum to fund an endowment is $25,000.
Can an endowment be designated for a specific purpose?
Absolutely! As with any gift to OCU, an endowed gift offers alumni and friends the opportunity to have their names, or the name of a loved one, linked to an area of the University in which they have a special interest.
Some donors create unrestricted endowments, recognizing that the needs and challenges of the future will differ from those of today. Unrestricted gifts are used for the highest priority needs on campus, and provide the most flexibility as these needs change.
Many donors create undergraduate scholarships or graduate fellowships to aid deserving students.
Some donors choose to endow a professorship or a chair in the academic discipline that inspired them as students.
Other donors choose to direct their gifts to programs or purposes of special concern to them, knowing that these additional funds stimulate growth and enhance excellence.
How many endowments exist for the benefit of OCU and its students?
Approximately 607 endowed funds are invested for the benefit of OCU and its students.
How can an endowment be established at OCU?
Interested donors can talk with a development officer in University Advancement and External Relations about the gift and the intent of the new endowment. An endowed agreement outlining use of available funds will be drafted by the development office and edited/approved by the donor(s).
The endowment may be funded with an outright gift, pledge payments over a period of up to five years or a planned gift. Some donors establish a trust or other planned gift vehicle to ensure their endowment’s funding in the future, but make annual gifts to fund the endowment’s purpose from year to year during their lifetimes.