Policy and Procedure
NOTE - POLICY HAS
BEEN SUPERSEDED SEE NEW POLICY AT: |
ENDOWMENT EARNINGS SPENDING POLICY
PURPOSE
The purpose of this policy is to insure the continued viability of these and future Mississippi State centralized endowment funds by providing specific guidelines for the allocation, in a reasonable and balanced way, of total earnings from the endowments between current spending and reinvestment for future earnings.
Mississippi State University serves as trustee and beneficiary of numerous endowment trusts. While the original principal of these funds can not be spent, earnings are eligible for use as designated in the trust establishing documentation.
POLICY/PROCEDURE
New Endowments: For the first three (3) years of operation, spending on newly created endowment funds will be limited to the lesser of:
A. Annual earnings,
B. 5% of the ending market value of the fund from the previous fiscal year-end.
There will be no spending allowed in the year a fund is established unless a specifically stated exemption exists within the original endowment documents.
Ongoing Endowments: After the initial three (3) year period, endowment earnings available for spending within a fiscal year will be determined as follows:
A. 5% of the three (3) year moving average of fiscal year end endowment fund market values using the most previous fiscal years, plus
B. Any funds available but not spent in previous fiscal years.
Spending will come from earnings only with no deterioration of initial corpus allowed unless specifically stated in the original endowment documents.
REVIEW
This policy will be reviewed annually by the Controller and Treasurer with any modifications submitted to the Chief of Staff.
OP 62.06
01/10/07
For information about this policy, contact the responsible/reviewing department hyperlinked above.
