Endowed chairs are defined in Regents Policy and exist to support University faculty in academic disciplines. The support of endowed chairs is the result of gifts to the University. The income from the endowment is used for salary supplements, support staff, start up costs, and other operating expenses that support the endowment. The intention is to provide the holder of the professorship with the resources necessary to continue the scholar's contribution to teaching, research and public service. The appointment and length of term is determined by the provost or dean. Any material changes to the original endowment must be approved by the donor and the President's Development Committee.
Once endowed chairs are established, appropriate University units are responsible to ensure the endowed funds are expended in accordance with the terms of the endowment and provide periodic reports on the status of the chair and nature of activities.
Permanent University endowed chairs using PUF matching funds support named professorships for full-time or visiting faculty with the rank of professor.
Special Situations
The income from an endowed chair is meant to be used for the expense of a full time faculty member, or visiting faculty member. Reasonable expenses associated with searching for chairholders may also be charged to the endowment when the chair is vacant. Other uses must be approved in advance by the Senior Vice President for Academic Affairs.
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.
PUF Endowment Procedures
Other Endowment Procedures
To be Determined
- Consolidated Endowment Fund (CEF):
- CEF is the Fund for investing all U of M endowments including PUF. The accounting for the fund is done on a unitized market-value basis, i.e., adjusted monthly as the overall value of CEF changes.
- Early Activation:
- When the University decides to establish a chair before the total gift has been received.
- Full-Time Faculty:
- A regular appointment that is two-thirds time or more over the academic year.
- Responsible University Administrator:
- The person (Provost, Dean, Department Head, etc.) who has been designated to develop a plan for filling PUF Endowed Chairs.
- Uncommitted PUF money:
- Includes unallocated PUF funds and those reserved to match pledges which have not been received.
- University Named Chair:
- An endowment with the highest dollar level requirements for a permanent endowment or expandable funds for ten years. In the former case the professorship will be continued in perpetuity; in the latter case, it will be continued during the period for which support is provided within the University. The support is used for scholarly activity. Dollar amounts are set by Regent's policy.
- University Named Lectureships, Fellowships or Scholarships:
- An endowment with the lowest dollar level requirement for a permanent endowment or expandable funds for ten years. These funds are used to supplement a professor's salary, provide stipends and support for fellowships, or cover expenses incurred in a lecture series. Dollar amounts are set by Regent's policy.
- University Named Professorship:
- An endowment with the mid-range dollar level requirement for a permanent endowment as determined by Regent's policy or expendable funds for ten years. In the former case the professorship will be continued in perpetuity; in the latter case, it will be continued during the period for which support is provided within the University. The support is used for scholarly activity. Dollar amounts are set by Regent's policy.
- Visiting Faculty:
- A faculty member from another educational institution or a qualified professional from a government or private agency on leave of absence to accept a temporary appointment.
- Accounting Services:
- Establish University matching and target accounts and notify departments. Prepare PUF endowment status reports.
- 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 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.
- Collegiate Development Officer:
- Coordinate fund raising efforts with recognized foundations.
- Donor:
- Honor pledges made to the University.
- Office of Investments and Banking:
- CManage investment of funds. Serve as an investment resource. Advise departments on when to invest in CEF and TIP.
- President's Development Committee (PDC):
- Make recommendations to the President on allocations for PUF endowments within the budget supplied each year on July 1. Sets dollar amount of the endowment and length of fund raising campaign. Approves any material changes to the original endowments including name changes.
- 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, Dean or Department Head):
- Recommend scholar for professorship. 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. Notify the Graduate School and donors when a chair has been filled.
- Sr. Vice President for Academic Affairs:
- Approve exceptions to PUF endowments supporting a full-time faculty member or visiting faculty.
- List of Departments with PUF Chairs
- Rates
Permanent University Fund Endowed Chairs may be created in the future from interest earned on uncommitted funds remaining from the initial campaign. The rate of match is approved at the time the match is approved.
Spending of endowment income is authorized by Regent's Policy. All PUF funds are invested in CEF. Participants receive quarterly distributions to their Target Accounts based on a percentage of CEF's three-year trailing average unit value. The percentage is set within a range approved in Regent's policy
Balances in Target Accounts are invested in TIP. The TIP rate varies from year to year.
Rates as of September 1995
- Current PUF Match
- One part PUF money 3 parts gifts. The University's contribution ranges from $166,000 to $500,000.
- Current CEF Rate
- By FY 2010 CEF will have a distribution rate based on an annual rate of 4.5% of a 5 year trailing average: 4.9% for FY 2006, 4.8% for FY 2007, 4.7% for FY 2008, 4.6% for FY 2009 and 4.5% for FY 2010 and going forward. The distribution is based on an annual rate of the trailing three year average and will be expanded to five years by FY 2008.
There are no frequently asked questions for this policy.
- Amended:
- 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 pulled as it was under development.
- Amended:
- 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.
- Effective:
- September 1995
- Supercedes:
- President Hasselmo Memo - February 9, 1993 - Management of the Permanent University Fund.
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To obtain a copy of a historical policy,
e-mail the U Policy Librarian at policy@umn.edu or call 612-624-4372.
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