ABOUT THE NEIU FOUNDATION
The 91Porn Foundation is a registered 501(c)(3) charitable organization governed by a 13-member volunteer Board of Directors.
Your gift to the NEIU Foundation qualifies for tax deduction in accordance with IRS regulations during the calendar year that you made your gift. You will receive a gift acknowledgment for your files. Consult your tax professional for more information.
what is an endowment?
An endowment is meant to provide a perpetual source of income for scholarships, faculty and University programs for generations of NEIU students. When an endowment is established, your gift, or the principal (or corpus), is invested long-term and a portion of the annual earnings are paid out to support the designated purpose for which the endowment was established. The goal is to ensure that the principal maintains its purchasing power over time to support future generations. As other sources of revenue such as state appropriations, grants and research sponsorship can be unpredictable, an endowment provides a consistent, reliable, perpetual source of income for programs and services that inspire and fund above-average achievement by students and faculty. The larger the endowment is, the greater the income that can be provided; therefore the more opportunities available for students, faculty, and strategic University programs.
Definitions of terms
Endowment: An endowment is defined as a donation of money or property to a non-profit organization for the ongoing support of the organization. An endowment is structured so that the principal amount (the "Corpus") is maintained at all times, but the realized income from interest, dividends, and net realized gains (gains greater than losses) is available for use.
The Corpus of an endowment shall be defined as the principal amount of the gift contributed initially to the fund or subsequently through additional gifts or under the terms of the endowment. Income distributions from endowments will be made as long as the Corpus of the endowment is not pierced or reduced. The Corpus shall remain the underlying asset of the endowment.
Net Income is defined as interest, dividends, and realized net gains from the sales of securities or other tangible property belonging to the endowment.
what are illinois' legal requirements for an endowment?
In June 2009, Illinois enacted the Uniform Prudent Management of Institutional Funds Act (UPMIFA). (See ilga.gov; 1972 UMIFA, SC-ST §34-6-10 through §34-6-80). UPMIFA is designed to replace the existing Uniform Management of Institutional Funds Act (UMIFA), which was approved by the National Conference of Commissioners on Uniform State Laws in 1972. This act provided uniform and fundamental rules for the investment of funds held by charitable institutions and the expenditure of funds donated as "endowments" to those institutions. Those rules supported two general principles: 1) that assets would be invested prudently in diversified investments that sought growth as well as income, and 2) that appreciation of those assets could prudently be spent for the purpose of an endowment fund held by a charitable institution. UPMIFA, as an update and successor to UMIFA, establishes an even sounder and more unified basis for charitable fund management than UMIFA.
who is responsible for investing the foundation's assets?
In accordance with the NEIU Foundation's bylaws, the NEIU Foundation Endowment is managed by the Investment Committee of the Foundation, comprised of volunteer members with professional expertise in investments. The Investment Committee is responsible for investments, re-investments, and general management of the endowment. The committee establishes policies for investing capital, monitoring, and reviewing investment performance, establishing appropriate benchmarks, and managing the investments to maximize the endowment's financial potential while minimizing risk. The NEIU Foundation contracts with DiMeo, Schneider & Associates for investment consultant services.
how are endowments invested?
Each of the many endowments managed by the NEIU Foundation operates effectively as an independent account. Individual funds' assets or accounts are pooled and invested as a single portfolio. This practice has two benefits: it reduces the cost of administration and provides additional opportunities for investment for these funds due to economies of scale associated with many asset classes. The NEIU Foundation invests the managed endowment in order to maximize long-term returns while mitigating risk through maintaining a diversified portfolio. Independent accounts are affected on a pro-rata basis.
what is asset allocation?
Asset allocation involves the division of your assets on the basis of percentage among a range of different investment categories. Which investment classes are selected is an important determining factor in portfolio return. The NEIU Foundation invests currently in 11 different asset classes, and the Board of Directors monitor and discuss returns and risk tolerance on a quarterly basis, while reviewing the Investment Policy on an annual basis.
how is endowment spending determined?
The Board of Directors approves an endowment spending policy, recommended by the Investment Committee. The NEIU Foundation spending policy is based on a total return approach for the purpose of maintaining stable cash flows over the long-term, protecting endowment funds against inflation, and preserving and growing the purchasing power of the endowment. The Foundation's spending policy is calculated by applying a payout rate to a moving average based on the prior three-years' market value as of June 30.
are there fees on endowments?
University foundations across the U.S. apportion a small percentage of the gift as a fee for managing the gift and the endowment. The NEIU Foundation charges an annual administrative/management fee of up to 1.0 percent to endowments. The fee partially offsets fund management and administrative costs associated with the endowment and supports the general fund. The fee is based on the 12-month rolling average of the endowment pool's market value as of June 30.
when does drawdown from my endowment begin?
Income may be distributed from an endowment based on the endowment spending policy and generally takes place when three conditions are met: 1) the fund must have met the minimum amount for the type of endowment being established; 2) the fund must have a current market value higher than its historical value; and 3) the fund must have been invested for a full fiscal year. The NEIU Foundation's fiscal year is from July 1 through June 30.
Feel free to email the NEIU Foundation at neiufoundation@neiu.edu to discuss endowment possibilities further with an advancement professional.
