University Endowed Chairs, Professorships and Faculty Fellowships
Last Update: April 2011
Responsible University Officer:
- Senior Vice President for Academic Affairs and Provost
- Senior Vice President for Academic Affairs and Provost
- Updated: April 2011
- Primary Contact : Jill Merriam
Printed on: . Please go to http://policy.umn.edu for the most current version of the Policy or related document.
The University may accept gifts for the purpose of creating endowed chair, professorship, or faculty fellowship positions. University faculty may be eligible to hold one of these positions to enhance their contribution to teaching, research and public service.
Endowed chairs, professorships, and faculty fellowships typically carry the name of the donor, of a person or institution designated by the donor, or of a person in whose name the University seeks funds to endow the position. Chairs, professorships and faculty fellowships will not include such terms as University, distinguished or the title Regents Professor. These titles are conferred only by the Board of Regents.
The Senior Vice President for Academic Affairs and Provost, chancellor, or dean determines the appointment and length of term for each position based on the memorandum of agreement with the donor. Once endowed chairs, professorships, or faculty fellowships are established, the responsible University administrator is responsible for ensuring the endowment funds are expended in accordance with the terms of the endowment and for providing periodic reports on the status of the position and nature of activities to the donor.
Units must document and communicate the process for appointing faculty members to named chairs, professorships, or faculty fellowships, including specifying the search and selection procedures.
Responsible University administrators and academic departments must coordinate all donor proposals, negotiations, and contracts with the Foundation(s) to ensure that there is no conflict with other donor/proposal contracts, that all parties agree how the donation is to be applied, and that the proposal is in compliance with all applicable policies.
The Board of Regents approves the minimum levels of endowments.
Endowment of Chairs
A permanent chair may be established when:
- $2,000,000 or more has been placed in an endowment that provides in perpetuity the annual funds needed for support; or
- $200,000 per year of expendable funds is made available for at least ten years.
In the latter case, the fund purpose will continue during the term of the support. The combination of recurring funding from the unit and chair endowment payout/income distribution must be sufficient to provide salary and fringe benefits for the recipient, staff support, travel and other expenses. Units with Permanent University Fund (PUF) chairs must follow the spending requirements outlined in MN State Statute. In the case of chairs established on a term basis, the number of chairs in a particular unit is limited in accordance with other applicable University policies to avoid excessive dependence on nonrecurring sources of support.
Endowment of Professorships
A permanent professorship may be established when:
- $1,000,000 or more has been placed in an endowment that provides in perpetuity the annual funds needed for support; or
- Alternatively, professorships may be established if a minimum of $100,000 per year of expendable funds if made available for at least ten years.
In this latter case, the fund purpose will continue during the term of the support. The combination of recurring funding from the unit and endowment payout/income distribution must be sufficient to provide salary and fringe benefits for the recipient, staff support, travel and other expenses. Units with PUF professorships must follow the spending requirements outlined in MN State Statute 137.022. In accepting the gift, the department or other unit accepts responsibility for providing additional funds as may be necessary for the faculty member(s) holding the professorship to carry out the intent of the gift.
Endowment of Faculty Fellows
Faculty fellows require a minimum of $500,000 in permanent endowment or a minimum of $50,000 per year of expendable funds if made available for at least ten years. Generally, these funds are used to supplement a faculty member's salary, to provide stipends and support for fellowships, or to cover expenses incurred in a lecture series.
Use of Income from an Endowed Position
Units will use the income from an endowed chair for the expense of a full-time faculty member, or visiting faculty member. The income from the endowment may be used for salary or supplements, graduate students, support staff, startup costs, supplies, travel, publishing expenses, and other items necessary to support the work and increase the effectiveness of the scholar, as specified by the conditions of the gift. In situations where sufficient funding is available, more than one chair, professorship, or faculty fellowship may be supported with the income stream from the endowment, assuming the original intent of the gift is maintained. Reasonable expenses associated with searching for chairs, professorships, or faculty fellowships may be charged to the endowment when the chair is vacant. The donor and the appropriate Foundation must approve any material changes to the original endowment.
For all other uses, the Senior Vice President for Academic Affairs and Provost must grant approval in advance of the expense.
REASON FOR POLICY
To implement Board of Regents Policy: Namings. Endowed chairs are intended to be maintained in perpetuity and be used to support the most outstanding faculty. The University intends to maintain the highest standards of stewardship and fiduciary responsibility for these endowed chairs, preserve the inflation-adjusted value of the fund, maximize total return, and provide necessary information to donors and appropriate officers of the University. Reporting to donors is essential to recognize their important contribution to the University's mission.
- Requesting Approval for PUF Chairs
- Establishing Permanent University Fund Endowments
- Planning to Select and Appoint the Chairholder
- Calculating and Planning the Distribution of Endowment Income
- Planning to Select and Appoint the Endowed Positions
- Managing and Reporting Endowment Activity - This procedure is being developed. If you have questions, contact Stacy Hebdon at 612-624-5858 or firstname.lastname@example.org.
Other Endowment Procedures
To be determined.
There are no forms associated with this policy.
U of M Medical Foundation
- Consolidated Endowment Fund (CEF)
- The fund represents the pooling of individual endowment funds from both public and private sources. Essentially permanent fund endowments have the longest investment timelines. Funds should be invested in CEF when principal appreciation is the main goal and dollars will not be expended for at least three years. The accounting for CEF is done on a per-share market value basis. The share value is adjusted monthly as the overall value of CEF assets change due to market fluctuations.
- Full-Time Faculty
- A regular appointment that is two-thirds time or more over the academic year.
- Group Income Pool (GIP)
- Long- term operating reserves of the University created from auxiliary enterprises, depreciation and departmental reserves. The funds support various capital and infrastructure needs. Funds should be invested in GIP when current income is the main goal and the dollars will not be expended for at least three years. GIP is accounted for on a per-share market value basis. The value of shares changes monthly depending on market fluctuations.
- Permanent University Fund (PUF)
- PUF is a public endowment derived from sources such as state iron ore taxes, royalties, and federal land grants. By legislative mandate, PUF assets are used to match private contributions with the goal of providing substantial financial support for endowed chairs and professorships throughout the University. All PUF endowments are True endowments and as such the original principal may not be spent. These endowments are invested in Consolidated Endowment Fund and subject to the same policies.
- Responsible University Administrator
- The person (Provost, Chancellor, Dean, Department Head, etc.) who has been designated to develop a plan for filling endowed chairs, professorships and faculty fellows.
- University Named Chair, Professorship and Fellow
- An endowed academic chair is the highest level endowment established to support the work of a faculty member; an endowed academic professorship is the second highest endowment and an endowed faculty fellow the third. Each endowment is established to support work of the holder and may include, but is not limited to, salary or salary augmentation, graduate student stipends, secretarial support, supplies, travel to scholarly conferences and publishing expenses. The position may be permanently endowed; or established as a 10 year term position if the annual support is equal to 1/10 of the total needed for appropriate endowment level.
- Board of Regents:
- Regents are responsible for establishing the minimum level required to support each of the three academic positions.
- Chairholder (Professorship or other named title)
- Assure that expenditures are in accordance with the terms of the endowment and University policies. With the Responsible University Administrator, prepare periodic reports to the donor(s).
- Chairholder's Dean or Department Head
- Correspond with donor on status of endowment. Develop a plan to fill department chairs. Assure that expenditures are in accordance with the terms of the endowment and University policies. Handle transfer of available dollars for endowment expenditures from the Foundation and plan annual budgets, unless this activity is performed by the Dean's office.
- Coordinate Campus, College or Unit
- Responsible for keeping list of all chairs, professorships, and faculty fellowships including current holders and making it available to administration upon request. Responsible for reporting activities to the donor.
- Coordinate Campus or Collegiate Development Officer
- Coordinate fund raising efforts with recognized foundations.
- Honor pledges made to the University.
- Office of Investments and Banking
- Determine investment strategy, monitor asset allocations to ensure compliance with Board of Regents policies, and evaluate investment performance. Recommend and monitor external investment advisers. Implement Board of Regents policy.
- Recognized Foundations
- Establish the gift endowment account for the department. Advise departments on donor relations. Request Asset Management to match gifts with PUF money and notify them of departmental budgeting plans. Provide information on gift status. Prepare overall reports on chairs.
- Responsible University Administrator (Provost, Chancellor, Dean or Department Head)
- Recommend scholar for chair, professorship or faculty fellowship. Ensure that a plan has been developed for filling interdisciplinary chairs. Develop a plan to fill PUF Endowed chairs. Get approval for the plan by an appropriate University official. Assign responsibility to a person who will handle transfer of available dollars for endowment expenditures from the Foundation and plan annual budgets. Must ensure the endowment funds are expended in accordance with the terms of the endowment and provide periodic reports to the donors on the status of the chair and nature of the activities.
- Treasury Accounting
- Verify that deposits, withdrawals and distributions are consistent with University policies, procedures, and donor intent, and verify that necessary documentation and approvals exist. Approve all CEF and GIP endowment transactions in the financial system. Maintain GIP and CEF endowment. Initiate quarterly income distribution and provide financial reporting.
FREQUENTLY ASKED QUESTIONS
There is no FAQ associated with this policy.
- Minnesota Statute Section 137.022 - Permanent University Fund
- Board of Regents Policy: Namings
- Board of Regents Policy: Endowment Fund
- Administrative Policy: Selecting Investment Options for University Funds
- Administrative Procedure: Choosing an Investment Pool
- Administrative Procedure: Establishing an Endowment
- Administrative Procedure: Changing an Endowment's Income Distribution Allocation
- Administrative Procedure: Depositing Funds to an Endowment
- Administrative Procedure: Withdrawing Funds from an Endowment
- Guidelines for Academic Searches available from the Office of Equal Opportunity and Affirmative Action
- April 2011 - Major Revision, comprehensive review:
- Expands the current policy to address professorships and faculty fellowships.
- Includes operational aspects of the process that were previously in Board of Regents Policy: Awards, Honors and Recognition.
- Clarifies roles and responsibilities for administering roles.
- Title changed from Administering University Endowed Chairs to University Endowed Chairs, Professorships and Faculty Fellowships.
- Procedures that duplicated procedures for Administrative Policy: Selecting Investment Options for University Funds were eliminated.
- June 2008 - Policy completely revised to address the Enterprise Financial System rollout. Establishing Permanent University Fund Endowments and Calculating and Planning the Distribution of Endowment Income procedures were also revised. Managing and Reporting Endowment Activity procedure was removed as it was under development.
- October 2005 - Updated CEF Rates in Rates Section. Procedures referencing this rate updated to link to this information in the rates section of this policy. TIP rate deleted from Rates section since currently there is no TIP rate.
- September 1995
- President Hasselmo Memo - February 9, 1993 - Management of the Permanent University Fund.