Washington State University
BUSINESS POLICIES AND PROCEDURES MANUAL

FINANCE
30.78
New 11-08
Finance and Administration
335-5524

Establishing a Quasi Endowment

PDF link

POLICY

When the University invests otherwise spendable gift funds in the Consolidated Endowment Fund for the purpose of producing long-term spendable income, such a fund is called a quasi endowment.

A quasi endowment is established by the Vice President for Business and Finance when he or she determines that establishment of such a fund is beneficial to the University.

Quasi endowments (sometimes referred to as funds functioning as endowments) are granted to units within the University for the purpose of converting currently spendable assets into invested assets that will produce future on-going support of a University program.

Generally, a quasi endowment will not be established unless the funds will remain in the Consolidated Endowment Fund for at least three years. NOTE: The Consolidated Endowment Fund is a commingled pool of private gifts that are invested by WSU Foundation in a balanced portfolio of equity and fixed income investments intended to provide permanent funding for WSU's educational mission.

Requirements

A quasi endowment is designated by the Vice President for Finance and Administration for the uses specified in the underlying Establishment of Fund document or, in the absence of donor restrictions, for the purposes specified by the requesting unit. See also 30.75.

A minimum of $100,000 is required to establish a quasi endowment. Once established, funds are spent in accordance with the terms establishing the quasi endowment. Changes to a quasi endowment or spending of the "principal" require approval by the Vice President for Finance and Administration.

By the nature of the financial resources used to create a quasi endowment, only the Vice President for Finance and Administration as treasurer for the Board of Regents can create a quasi endowment. All quasi endowments are assets of the University and, for investment purposes, are treated like all other University endowments.

Management and Advancement Fee

Quasi endowments are subject to the same Management and Advancement Fee as true endowments.

NOTE: The Management and Advancement Fee is an asset-based fee that is paid to WSU out of the Consolidated Endowment Fund's earnings to cover a portion of the salaries and operating costs associated with the services that WSU provides WSU Foundation. It is assessed quarterly on the 36-month moving average of the Consolidated Endowment Fund's market value at the percentage specified in the spending policy approved by WSU Foundation.

Expendable Resource

For financial reporting purposes, all investments of quasi endowments are considered expendable resources.

Establishment

Requests for establishment of, or additions to, a quasi endowment must be made through a dean, vice president, or chancellor.

Submit the request to the Associate Vice President for Finance requesting establishment of, or addition to, a quasi-endowment. The request memorandum must contain at least the following information:

The Associate Vice President for Finance reviews the request and recommends approval or disapproval to the Vice President for Business and Finance.

If approved by the Vice President for Finance and Administration, the Associate Vice President for Finance staff works with the requesting unit to set up the necessary accounts and funds transfers. If not approved, the Associate Vice President for Finance notifies the unit in writing.

Terminations

Requests for termination of, or withdrawals from, a quasi endowment must be made through the responsible dean, vice president or chancellor. The request is in the form of a memorandum to the Associate Vice President for Finance requesting termination of or withdrawal from a quasi endowment. The request for termination must be submitted to the Associate Vice President for Finance at least six months prior to the anticipated termination date. The memorandum must contain at least the following information:

The Associate Vice President for Finance reviews the request and recommends approval or disapproval to the Vice President for Finance and Administration. Finance and Administration coordinates the request with the WSU Foundation Finance Office.

If approved, the Associate Vice President for Finance staff works with the requesting unit to effect the transaction and transfer funds. If not approved, the Associate Vice President for Finance notifies the unit in writing.