1.What is the WCU Foundation’s tax status?
The WCU Foundation is a charitable organization as described in section 501(c)(3) of the U.S. Internal Revenue Code.
2. Is my gift tax-deductible?
Your gift qualifies for tax deduction in accordance with IRS regulations during the calendar year that you make your gift. You will receive a gift acknowledgement for your files. Consult your tax professional for more information.
3. Who governs the WCU Foundation?
The WCU Foundation is governed by a 31-member board of directors. The board consists of both elected (27) and ex-officio (4) directors. Elected directors serve three-year terms.
4. What is an endowment?
An endowment is meant to provide a perpetual source of income for scholarships, faculty and programs for the university. When an endowment is established, your gift, the principal (or corpus), is invested long-term, and a portion of the annual earnings are paid out to support the designated purpose for which the endowment was established. The goal is to ensure that the principal maintains its purchasing power over time to support future generations.
5. Why are endowments important to Western Carolina University?
As other sources of revenue, such as state appropriations, grants and research sponsorship, can be unpredictable, an endowment provides a perpetual source of income for important university programs and services. The larger the endowment, the greater the income, resulting in more opportunities for students, faculty and strategic programs.
6. What legal requirements regulate endowments in North Carolina?
In 2009, North Carolina enacted the Uniform Prudent Management of Institutional Funds Act. (UPMIFA replaced a 1972 act approved by the National Conference of Commissioners on Uniform State Laws.) This act provides uniform and fundamental rules for the investment of funds held by charitable institutions and the expenditure of funds donated as endowments to those institutions. The rules support two general principles: 1) that assets will be invested prudently in diversified investments that seek growth as well as income, and 2) that appreciation of those assets can prudently be spent, in compliance with the donor endowment agreement, for the purposes of any endowment fund held by a charitable institution.
7. Who is responsible for managing WCU Foundation investments?
The investment committee of the Western Carolina University Foundation provides direction and recommendations to the board of directors for the investment of the financial assets of the foundation, with input from external professional counsel. The investment committee manages the investment and disbursement of foundation assets and assets managed by the foundation while maintaining prudent fiduciary standards.
8. How are endowment assets invested?
Each of the endowments managed by the WCU Foundation essentially operates as an independent account. The assets of the individual funds or accounts are pooled and invested as a single portfolio. In addition to reducing administrative expense, this provides additional investment opportunities. The WCU Foundation invests the managed endowment to maximize long-term returns while simultaneously mitigating risk through maintaining a diversified portfolio.
9. What is asset allocation?
Asset allocation involves dividing assets on a percentage basis among different broad categories of investments. The selection of investment classes has been shown to be one of the most important determinants of portfolio return. The WCU Foundation’s board of directors approves the foundation’s investment policy, which includes asset allocation guidelines. Asset allocations are reviewed periodically and rebalanced as necessary.
10. How is endowment spending determined?
The WCU Foundation board of directors approves an endowment spending policy recommended by the investment committee. The spending policy is based on a total return approach to maintain stable cash flow over an extended period of time, to protect endowment funds against inflation, and to preserve and grow the purchasing power of the endowment. For fiscal year 2016, the spending policy of the foundation is five percent of the endowment pool's twelve quarter rolling average market value, discarding the highest and lowest quarter's value as determined on June 30th.