CEA - Endowment Fund
When chapters seek to create permanent scholarship funds or offer perpetual funding for permanent educational use areas, the Endowment Fund may offer a more appropriate option than the Chapter House/Educational Fund. By its nature, the Endowment Fund is a permanent asset of the Educational Foundation, restricted for use by the named chapter. Each Endowment Fund provides funding via the Spending Rate. (See Below)
Policies
- A one time 5% administrative (overhead) fee (but not less than $5) on each individual alumni contributions will be paid to the DUEF's general fund. For example: A gift of $1,000 will result in a $950 deposit to the Endowment Fund and $50 to the DUEF general fund.
- To cover the cost of maintaining the Fund, the DUEF will assess a 1% annualized service fee. The fee will be calculated and withdrawn monthly, based on the previous month-end Fund value.
- A minimum of $25,000 is required to establish an Endowment Fund.
- Unlike the Chapter House/Educational Fund, the Endowment Fund is established to permanently meet educational needs of the chapter. This fund will be adjusted monthly, corresponding to what the Foundation's investment portfolio achieves. This includes both income and capital appreciation.
- To allow for easy participation, no restrictions are placed on minimum size of gifts or number of gifts accepted. (Note in Policy one that gifts less than $100 will incur a $5 administration fee.)
- Grant requests may be submitted and processed four times a year-January 1, April 1, July 1 and October 1-to the DUEF for consideration. The DUEF Board of Trustees must approve the application before any grant funds are paid.
- The spending rate is based on a continuous 12-month rolling average of the fund's net asset value.
- Each CEA must have an alumni chapter in good standing designated with oversight responsibilities.
- A written plan must be submitted at the time a CEA is established that outlines the educational objectives/purposes.
- In the event that a chapter becomes inactive, or has its charter suspended for a period of at least eight (8) consecutive years, the assets in each such inactive or suspended chapter's CEA fund will revert to the endowment of the DUEF.
DELTA UPSILON FOUNDATION SPENDING POLICY
The Foundation's mission states: "Providing for the long-term financial stability of the Brotherhood." This necessitates the preservation of the real, inflation-adjusted purchasing power of the Foundation's assets. The Foundation's spending policy for permanently restricted endowed funds attempts to balance the long-term objective of maintaining the purchasing power of the Foundation's assets with the goal of providing a reasonable, predictable, stable and sustainable level of funds to support the Foundation's budget.
To maintain the purchasing power of the Foundation's assets and achieve a sustainable level of distributions to the Foundation's budgets, the Foundation's spending rate is currently established at 4% of the net asset value of the appropriate endowed fund. The Board of Trustees will review the spending rate at least annually and may change the spending rate as appropriate.
To mitigate the impact of short-term market volatility on Foundation spending, the spending rate will be based on a continuous 12-month rolling average of the net asset values of the appropriate endowed fund. This spending rate is based upon a total return on the Foundation's assets which includes both income and capital appreciation to be withdrawn for spending.
Spend rate calculation example* for a distribution request made in March 2010:
| Month | Market Value | 12-month Average |
|---|---|---|
| 03/2009 | $25,000.00 | $313,558.42/12 = $26,129.87 |
| 04/2009 | $25,200.00 | |
| 05/2009 | $25,401.60 | Funds available in March 2010 = $26,129.87 x 4% = $1,045.19 |
| 06/2009 | $25,604.81 | |
| 07/2009 | $25,809.65 | |
| 08/2009 | $26,016.13 | |
| 09/2009 | $26,224.26 | |
| 10/2009 | $26,434.05 | |
| 11/2009 | $26,645.52 | |
| 12/2009 | $26,858.69 | |
| 01/2010 | $27,073.56 | |
| 02/2010 | $27,290.15 |
For newly established funds, distributions will not be available until 12-months of history has been established. For previously established funds that have switched to the new agreement, if a 12-month history is not available at the time of distribution, the average will be calculated using the history available. *Note: All figures given in this example are for illustration purposes only. Actual returns may vary.
As the fund continues to appreciate, so does the amount of funds available. If, in a given year, the funds available exceed the funds awarded, the surplus is simply retained in the fund until requested.