How is the Foundation Funded?
- The Foundation relies mostly on investment income to pay for its operation.
- The plan ensures that 100 percent of gifts are deposited into the accounts for which they have been designated. If a donor makes a $1,000 gift, $1,000 is deposited into the appropriate account.
- The Foundation receives no state or university funding.
- The Foundation spent about 15 cents in 2008 to raise a dollar.
Foundations use many formulas to cover their operating expenses. Some charge a percentage of each gift; others place all gifts in a separate account for six months, using the investment income for operations. Many university foundations are part of their university and receive a fee or stipend from the institution.
Source of UW Foundation Operating Funds
Endowment fund earnings
An amount equal to one percent of the invested assets of the endowment fund (which includes the individual “32” accounts”) is allocated to the Foundation operating account. The allocation is made quarterly at a rate of 0.25 percent of the prior quarter’s fair market value. The amount is taken at the overall pool level, before income and appreciation are distributed to separate accounts.
Income from expendable “12” accounts
We calculate monthly “12” account earnings by crediting all gifts received on the last day of each month and charging all disbursements as paid on the first day of each month. The income earned on the “float” goes into the Foundation’s unrestricted earnings account.
Direct charges to funds
The Foundation allocates direct fundraising expenses to the funds for which the expenses are generated. Those expenses include printing, mailing, Telefund costs and travel. The full salary of additional, dedicated development directors for a school or college also can be charged to the unit’s expendable funds. In 2008, the Foundation board voted to rebate that cost to schools and colleges. Benefits for the dedicated personnel are paid from the Foundation’s general operating account.
Unrestricted gifts made specifically for the Foundation
Occasionally, donors make a gift to support the operation of the Foundation.