Transcript Endowment Reports - George Washington University

Endowment
Reporting
Finance Director Presentation
April 17, 2012
Presented by:
Jennifer Hinkle with
Renee Fitzmorris
Objectives
• Provide general overview of the endowment
– Endowment transaction process
– How to spend endowment payout
• ETS reports
• Frequently Asked Questions (FAQ)
Endowment Overview:
Like a Mutual Fund
Price per share (Market Value: 1/31/12)
New Endowment Gift /
Internal Fund Transfer (IFT)
(Transaction Date: 2/15/12)
Units bought the following
month
(Transaction Date: 3/31/12)
Fund allocations begin the
following month
(Transaction Date: 4/30/12)
• Received and recorded as revenue/transfer by Development and
Comptroller’s Office in appropriate fund designation
• Corpus increases in ETS (both gift and IFT)
• Market Value increases in ETS for IFT (cash invested the month it
occurs)
• Endowment gift and IFT (corpus/principal) buys units in the following
month
• Units bought based on 1/31/12 market value price per share
• Market Value increases in ETS for gifts (cash transferred the month
after it occurs – allows for reconciliation and any adjustments)
• Fund generates payout based upon current year payout rate
• Fund shares in earnings/expenses of the pooled endowment
How to Utilize Payout
• Submit Endowment Request Form to Treasury
Management with supporting documentation
attached.
• Form location http://financeoffice.gwu.edu/treasury/
Required Information:
-Requestor
-Endowment Fund
Option 1:
Payment Request
(for Direct Charge)
Something to keep In
mind…
What specific
information would be
useful for reporting
back to the donor?
Option 2:
Funds Transfer
(for Reimbursement)
New Form Section!
Option 3:
Payout Reinvestment
Required Information:
-Requestor & Department
Approval Signatures
3 Options to Utilize Payout:
1) Payment Request/Direct charge
• Have endowment pay for expense directly from available payout
• Purchase Requisitions/Purchase Orders may be required
• See guidance 
http://www.financeoffice.gwu.edu/procurement/Documents/PDF/RequisitionNeeded
FAQ.pdf
• Treasury Management reviews form and supporting documentation and sends
approved form to Accounts Payable (Comptroller’s Office) for processing
2) Funds Transfer/Reimbursement
• Reimburse department for expenses incurred related to endowment purpose
• Treasury Management reviews form and supporting documentation and sends
approved form to Endowment Accounting (Comptroller’s Office) for processing
3) Reinvest payout into endowment fund
• Department does not have current use for payout
• Payout is no longer available for spending, but it buys additional units. These additional
units then generate more payout for use in future periods.
ETS Reports
• Frequency: Quarterly
– Monthly or ad-hoc reports provided
upon request
June Reports
Q1 September
Reports
Q2 December
Reports
Q3 March
Reports
April Reports
May Reports
(Year-end)
Provided by
October 20th
Provided by
January 20th
Provided by April
20th
Provided by May
20th
Provided by June
20th
Provided midSeptember (after
financial
statement audit)
ETS Reports
• Location: GWDocuments
GWDocuments also
contains DONOR
DOCUMENTS such as:
-Memorandums of
Understanding (MOU)
-Internal memos
• Report Types: 5
–
–
–
–
–
Description
Payout Rollforward
Payout Drawdown
Gift
Corpus
-Payout requests
Description Report
Purpose
• Quick snapshot of funds by fund number (ET/EQ)
Includes
•
•
•
•
•
Description of fund purpose (see MOU for more detail)
# of units
Book value (i.e. gifts, IFTs that contribute to the corpus/principal)
Market value
Unspent payout allocated to date
Payout Rollforward Report
Includes
Purpose
• Shows payout activity
during current fiscal year
• A. Beginning unspent balance rolled over from prior year
• B. Payout allocated to date
• C. Payout spent to date (drawdowns)
• See Drawdown report for more detail!
• D. Payout spent to date (direct charges)
• See Drawdown report for more detail!
• E. Current system balance as of report date
• F. # of units
• G. Remaining “Authorized” payout to be allocated through June
Drawdown Report
Purpose
• Detail of payout spent in current year
Includes
• Fund number, amount, description of expense (scholarship, direct charge, payout drawdown request)
• “Release of Restrictions” are entries for accounting purposes and have no impact (net to zero)
Gift Report
Purpose
• Shows gift, pledge payment, and internal fund transfers for the current month/year
Note
• Some versions show the units bought and total units
• Remember, units are purchased on a one month lag from the gift date!
Corpus Report
Purpose
• Shows transactions during the current year that impact the corpus balance of the endowment
Note
• Very few departments get this report as the information is included in book value amount on the Description
Report
Trivia Question
I have a new December 2011 gift coming in for an endowment, how can I
estimate how much payout I will have to spend for the rest of FY12?
A. If material/critical to your operating needs, contact the Endowment
Analyst for information to calculate. If less critical, wait until the next ETS
report comes out.
B. Calculate price per share from ETS Description reports using total units
and market value for your division.
Answer: A
• Obtain price per share from Endowment Accountant (you need the total units in the pooled
endowment and total market value, which is not available at the divisional level).
•
Calculate units purchased = gift amount / share price
•
Calculate payout = units * pro-rated annual payout rate applicable to gift timing
•
Timing can be complex and some information may not show up on ETS reports timely
• Strongly encourage checking calculations that will be used for donor communication or
business operations with Endowment Accountant.
• Calculations should be confirmed with subsequent ETS Reports (as actual amounts could
differ due to rounding or human error).
FAQ: Calculate Total Payout Available
as of Report Date
Use: Year end requests (can be
completed before May/June)
Current Unspent Payout Balance (Column E)
+ Current Year payout to allocate through June (Column G)
• Example A = ($6,375) + $20,625 = $14,250
• Example B = $248,750 + $56,250 = $305,000
• Example C = $31,750 + $11,250 = $43,000
*Calculation incorporates
current year activity (i.e. payout
drawdowns)
Trivia Question
As of July 1, 2012, how much endowment payout is available for use?
A. None
B. The month of July
C. Only unspent prior year payout
D. Unspent prior year payout PLUS all of the payout that will be
allocated in FY13 (Jul-12 through Jun-13)
Answer: D
• Unspent prior year payout carries into the next year.
• All payout that will be allocated on a monthly basis during FY13 is available for
spending on July 1.
• GW STRONGLY encourages spending unspent prior year payout as well as all
current year payout. The donor has given this money to be used for the
purpose of the endowment (scholarships, professorships, etc.).
FAQ: Calculate Total Payout Allowed to
be Spent as of 7/1/11
Use: Good for planning at the beginning
of the year (payout requests can be
completed before May/June)
Beginning Balance (Column A)
*Calculation EXCLUDES current year
activity (i.e. payout drawdowns). It shows
gross payout that will be allocated.
+ Current Year payout allocated through report date (Column B)
+ Current Year payout to allocate through June (Column G)
• Example A = $14,750 + $28,875 + $20,625 = $64,250
• Example B = $250,000 + $78,750 + $56,250 = $385,000
• Example C = $36,000 + ($4,250) + $11,250 = $43,000 + $20,000 (12/31/11 reinvestment) = $63,000
•
Note: On 7/1/11, this fund had $63,000 available, however when $20,000 was reinvested, it was taken out of
column B and is no longer available for spending per Jan-12 report.
Trivia Question
I won’t have my June reports until September. Is there a way I
can ESTIMATE how much payout a fund will get in FY13?
A. Yes
B. No
Answer: A
• The Board of Trustee’s will typically approve the payout rate for the upcoming
year at its Q3 meeting, held in May.
• Using the most recent ETS Report (Descriptions or Payout Rollforward), the
number of units can be multiplied by the payout rate to determine how much
payout will be allocated over the next 12 months.
• Confirm this when Q1 reports are received.
• Note: There can be nuances; for example if a new gift is received, there is a
timing lag before payout is earned.
FAQ: Calculate Annual Payout
Quick Estimate: Calculate with Units
Units (Column F) * FY12 Payout Rate
• Example A = 16,500 * $3.00 = $49,500
• Example B = 45,000 * $3.00 = $135,000
• Example C = 9,000 * $3.00 = $27,000
Use: Talking with donor about
payout their endowment is
generating annually and planning
annual support for ongoing
activities, such as awards, prizes,
professorships, etc.
More Precise Estimate: Sum Authorized Payout Columns
Payout allocated through report date (Column B)
+ Payout to allocate through June (Column G)
• Example A = $28,875 + $20,625 = $49,500
• Example B = $78,750 + $56,250 = $135,000
• Example C = ($4,250) + $11,250 = $7,000 + $20,000
(reinvested payout taken out of column B) = $27,000
Jennifer Hinkle
Senior Endowment Analyst and
Supervisor
Comptroller’s Office
[email protected]
(703) 726-1910
Renee Fitzmorris
Manager, Gift and Endowment
Administration
Treasury Management
[email protected]
(703) 726-4156