The balances in endowment income (spending) projects roll from year-to-year and are known as unused endowment spending budgets. Responsible persons should regularly review unused endowment spending balances to determine if there are excess funds that can be returned to the endowment principal. FAI recommends returning budgets that will not be needed within the next year.
Unused balances in endowment income funds can be obtained by running a Fund Report for a foundation or the University Endowment Fund. The FAI Fund Type for endowment income projects is “F0”. The balances in these projects are the “unused spending” balances. The Fund Report and further instructions are located under Foundation Campus Reports on the Systems Reporting Tools page of the FAI website.
Unused endowment spending budgets left in an income project
- Roll over from year-to-year
- Are not invested in the long-term pool
- Can potentially create donor relation issues if not spent
Returned unused endowment spending budgets
- Will be reinvested in the long-term pool
- Will increase the spending reserves and market value of the endowment
- Will begin participating in investment earnings of the fund
- Can signal to donors that endowment funds are being appropriately stewarded, even if funds are not currently needed/being spent
- May be requested as a spending exception if funds are needed at a future date
Please be thoughtful of upcoming budget needs during this process. If funds will reasonably be required to meet needs within the next year, we recommend they remain in the spending project. Unused spending budgets may be returned to principal at anytime.
See Questions – Who to Contact for additional support.