- Providing stable, long term financial resources for OHSU
- Providing a legacy for donors, or someone they choose to honor
- Funding critical priorities such as faculty support, research, educational scholarships and patient care
PROVIDING FOR OHSU’S FUTURE
Endowed funds are critically important to OHSU’s goals of attracting and retaining the most talented people and supporting the types of programs that exemplify the institution’s mission of healing, teaching, discovery and outreach. The OHSU Foundation is OHSU’s designated fundraising entity.
What is an endowed fund?
An endowed fund is a permanent fund established for a specific purpose by a donor. The assets of the fund are invested to provide earnings that are paid annually in perpetuity to benefit an OHSU program. Each year any remaining income, beyond the annual spending distribution to OHSU, is invested to preserve and grow the original gift to sustain a legacy for future generations. The management of endowed funds is governed by Oregon law. A quasi-endowed fund is one that the OHSU Foundation Board of Trustees, rather than a donor, temporarily restricts or pools for investment purposes.
Who benefits from an endowed fund?
An endowed fund may support a specific OHSU school, department, research institute or program. It also may support specific people or purposes such as a faculty professorship or chair, scholarship or fellowship, research activity, visiting lecturer or patient care. An endowment established as a named fund (as designated by the donor) also may create a perpetual legacy for the donor or someone the donor wishes to honor.
MANAGING FUNDS WISELY
Who administers OHSU’s endowed funds?
The OHSU Foundation’s Department of Finance and Administration provides the day-to-day administration of OHSU’s endowed funds. The foundation’s investment committee, consisting primarily of OHSU Foundation trustees, provides policy oversight and strategic direction for the funds. The board’s investment committee contracts with a professional investment consultant for additional expertise, and all investments are managed by professional fund managers.
Endowed funds are held and managed by the foundation to meet defined goals, policies and objectives. These policies are set by the board of trustees based upon recommendations of the investment committee. (These policies are available on request.)
What portion of endowed funds goes toward management and operations? The foundation charges an annual endowment management fee to help pay for the cost of administration and stewardship of funds received. This fee is set by the foundation’s board of trustees and is currently 1.6 percent of the entire endowment pool, although that percentage may be adjusted by the board as needed.
How are endowment funds distributed?
For investment purposes, endowed funds supporting OHSU are managed together in an endowment pool. In fiscal year 2006, the spending distribution of 5.0 percent began a gradual stepdown of one-tenth of a percent each year that will continue until it reaches 4.5 percent in 2010.
Investment income is available for spending by accountholders 12 months after the endowment’s funding goal has been reached.
Why are distributions generated by endowed funds sometimes frozen?
Occasionally the difficult decision to freeze monthly distributions to OHSU accountholders is made. This is done in accordance with Oregon law to protect the endowment’s principal value and to ensure that the endowment fund is not reduced below the original amount donated. Taking this temporary measure ensures that OHSU will have a long-term viable endowment. The endowed fund is reactivated once it regains its original principal value and accrues an amount equal to its annual spending distribution.
THE FUTURE OF ENDOWMENTS
What is the OHSU Foundation doing to increase endowment gifts?
The OHSU Foundation works closely with donors and potential donors to establish long-term endowment gifts that provide meaningful support for key OHSU programs. The foundation’s planned giving and development staff members collaborate with attorneys and financial advisers throughout Oregon to help inform potential donors about the benefits that endowments can provide both to OHSU and to donors.
How are OHSU’s endowed funds performing?
While the endowed funds for any institution fluctuate with economic and market conditions, over the long term the endowed funds for OHSU have performed extremely well. With continued prudent financial management and the generosity of OHSU supporters, endowed financial support provided for OHSU accountholders will continue to grow.
ESTABLISHING AN ENDOWED FUND
The OHSU Foundation has designated the following guidelines for establishing endowment funds. These can be provided through current gifts or through planned gifts:
Endowment Fund Types
|Scholarship and loan fund
|Endowment for excellence
|Chair (except clinical chairs in the School of Medicine)
|Clinical chair in the School of Medicine