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Endowed gifts Tips for managers How an ISU endowment fund works Endowment levels |
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INSIDE IOWA STATE June 14, 2002 Endowed gifts Faculty, staff play key role in carrying out donor wishes by Diana Pounds Most donors have a pretty good idea of how they'd like to help the university. They want to help students pay for college. Or honor the memory of a great teacher. Or bring an outstanding professor to campus. Or equip a lab. Each of the more than 1,200 endowments that support Iowa State reflects a donor's desire to make a contribution that will benefit the university in some special way for decades to come. Nearly $14 million in endowment earnings annually The ISU Foundation helps donors set up endowments, but the task of ensuring that donors get their money's worth -- that gifts go where they were intended -- falls to hundreds of faculty and staff. They're the department chairs, committee members, financial aid officers and numerous others who spend nearly $14 million annually in earnings from various endowments. "A lot of people think that the ISU Foundation raises money for endowments and makes sure that it's spent correctly," said Johnny Pickett, university controller and a member of a committee that recently reviewed ISU endowment activities. "But we in the university are spending the money and we're responsible for seeing that it's spent in accord with donor intent." President Gregory Geoffroy appointed a committee last fall to determine whether endowment expenditures are in line with donor wishes. The Committee to Review Endowment Expenditures concluded that those spending endowment earnings are doing so appropriately and with the intent to meet donor expectations. Fall training for endowment managers However, the committee, led by veterinary medicine professor David Hopper, also made a number of recommendations aimed at improving the way Iowa State handles endowments. "I've accepted these recommendations and we're already working on their implementation," Geoffroy said. "One emphasis of the recommendations, for example, is to ensure that everyone involved in managing endowments knows how to properly handle the accounts. We're developing a training session for all endowment administrators for fall 2002." Other responses to the committee recommendations also are under way, Geoffroy said. Representatives from the foundation, controller's office and student financial aid office are planning a thorough review of all privately funded endowments, an improved online system for viewing endowment account information, and continued refinement of the endowment agreement. A good agreement The endowment agreement, also known as the memorandum of agreement, received considerable attention from the review committee. A good agreement is clearly written and designed for the long-term -- for that endowment administrator a hundred years in the future who will look to the agreement for directions on how to spend. While recent agreements are written to meet those standards, the committee noted some problems with older agreements, Hopper said. Some designate funds for programs that no longer exist while others include criteria that are vague or difficult to meet. One such example, according to Earl Dowling, director of financial aid, is an endowment created by the Class of 1917. The agreement stipulated that earnings provide full in-state tuition scholarships. However, earnings from the endowment don't provide enough funds to meet today's in-state tuition costs, so the agreement, as originally written, couldn't be carried out today. Such agreements can be updated, said Phyllis Lepke, ISU Foundation senior vice president. The foundation, in cooperation with ISU departments, is reviewing all agreements and when necessary, clarifying and updating their terms. "If it's impossible to execute an agreement as written, the foundation establishes contact with donors or their beneficiaries to work out a new agreement," Lepke said. The report from the Committee to Review Endowment Expenditures is available online at http://www.iastate.edu/news/today/02/jun/endow.html. |
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