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Policy 3113 – Endowed Funds

Revision Date:  3/9/2021

Last Review:  3/9/2021

Original Effective Date:  8/26/2000

Responsible Office:  Division of University Advancement

Policy:

A minimum corpus of $20,000 is required to qualify an account as an endowed account, although some colleges and units may request that donor’s consider a minimum of $25,000.  Additionally, the appropriate endowment agreement must be in place and on file in the Foundation office. This agreement shall outline specific guidelines detailing the purpose of the endowment, the person responsible for the account, and any limitations on the use of spendable funds generated by the account.

Endowments for scholarships and other purposes may be named by the donor or donors who establish the endowment, and proposals for establishing endowments must be submitted to the Foundation for review and for finalization.

Endowed Professorships require a minimum of $80,000 from a donor to be matched with $20,000 in state funds to be a fully endowed $100,000 Professorship. The donor may name the Professorship and specify the academic area that benefits from the income generated by the investment of the endowment. Endowed Professorships are invested and administered according to guidelines established by the Board of Regents of the University of Louisiana System.

Eminent Scholar Chairs require a minimum $600,000 donation from private funds and a match of $400,000 in state funds, establishing a $1,000,000 Eminent Scholar Chair. The donor may name the Eminent Scholar Chair and specify the academic area that benefits from the income generated by the investment of the endowment. Eminent Scholar Chair funds are invested according to guidelines established by the Board of Regents of the University of Louisiana System.

More information about endowed professorships and chairs can be found at the website for the Louisiana Board of Regents (regents.la.gov) or obtained from Foundation staff.

An endowed fund specifies that the principal be held intact, invested, and a portion of the annual income used for specified purposes at Louisiana Tech University. Expendable (non-endowed) scholarships may be established with an amount not less than $500 with the gift amount less the 10% Foundation Administrative Fee available for use. The following information is necessary for the establishment of a scholarship account within the Louisiana Tech University Foundation.

Definitions:

Not Applicable.

Procedures:

Name

The donor has the opportunity to name the Scholarship, i.e., the John L. and Jane C. Doe Memorial Scholarship in Music. A named scholarship is an excellent opportunity to honor or memorialize someone.

Type

The scholarship is either endowed or expendable. (See above for explanation.)

Area

The donor may choose to make the scholarship general in nature, or the donor may choose the academic area for the scholarship. For example, the scholarship may benefit a student majoring in engineering, or, more specifically, chemical engineering. Donors are asked not to be too restrictive in this area so that the pool of applicants for the scholarship is not unduly small.

Amount

Scholarship monies available from endowments are determined by the Asset Management Committee of the Foundation Board of Directors.  All endowed funds that are fully endowed on August 31 of a given year will provide a spendable allocation for the following academic year.  For example, an endowment with a $25,000 balance on August 31, 2020 will provide a spendable allocation for the 2021-22 academic year.

Fees

The administrative fee for establishing an endowment is 5% of the principal. That fee may be paid by the donor, or it is deducted from the earnings prior to the awarding of the first scholarship. An annual management fee of 1% of the corpus is charged by the Foundation for the management of the account

Criteria

Criteria for making awards of scholarships should be as broad as possible. Below are examples of some criteria:

  • Awards will be made to incoming freshmen with majors in the College of XXX or the XXX Department or School.
  • Recipient(s) must have demonstrated financial need as determined by the Financial Aid office.
  • Recipient(s) must have earned a cumulative grade point average of at least 3.0.
  • Preference will be given to students from XXX Parish, XXXX County of XXXX State though any student meeting criteria is eligible.
  • Other criteria to consider are status as a full or part-time student and whether the scholarship shall be renewable.

Selection

If the scholarship is designated to a particular academic area of the University, the scholarship committee of the college or school shall be the selecting body. General scholarships are awarded by the Scholarship Committee of the University.

Provision

The following provision, or language that is substantially similar in effect, should be included for endowments: “In the event that the original purposes stated in the endowment agreement can no longer be carried out due to changing conditions, the Foundation, through its Board of Directors, shall have the power to modify the purposes to the extent necessary to enable the endowment to be used. Any such alternative use shall be for a purpose which most closely coincides with the donor’s primary original intent.”

Documentation

The final endowment agreement is created in duplicate and signed by the donor(s) and Foundation officials. One fully executed copy is for the donor; the other is kept on permanent file in the Foundation office.

Policy 3113 – Endowed Funds

Revision Date:  3/9/2021

Last Review:  3/9/2021

Original Effective Date:  8/26/2000

Responsible Office:  Division of University Advancement

Policy:

A minimum corpus of $20,000 is required to qualify an account as an endowed account, although some colleges and units may request that donor’s consider a minimum of $25,000.  Additionally, the appropriate endowment agreement must be in place and on file in the Foundation office. This agreement shall outline specific guidelines detailing the purpose of the endowment, the person responsible for the account, and any limitations on the use of spendable funds generated by the account.

Endowments for scholarships and other purposes may be named by the donor or donors who establish the endowment, and proposals for establishing endowments must be submitted to the Foundation for review and for finalization.

Endowed Professorships require a minimum of $80,000 from a donor to be matched with $20,000 in state funds to be a fully endowed $100,000 Professorship. The donor may name the Professorship and specify the academic area that benefits from the income generated by the investment of the endowment. Endowed Professorships are invested and administered according to guidelines established by the Board of Regents of the University of Louisiana System.

Eminent Scholar Chairs require a minimum $600,000 donation from private funds and a match of $400,000 in state funds, establishing a $1,000,000 Eminent Scholar Chair. The donor may name the Eminent Scholar Chair and specify the academic area that benefits from the income generated by the investment of the endowment. Eminent Scholar Chair funds are invested according to guidelines established by the Board of Regents of the University of Louisiana System.

More information about endowed professorships and chairs can be found at the website for the Louisiana Board of Regents (regents.la.gov) or obtained from Foundation staff.

An endowed fund specifies that the principal be held intact, invested, and a portion of the annual income used for specified purposes at Louisiana Tech University. Expendable (non-endowed) scholarships may be established with an amount not less than $500 with the gift amount less the 10% Foundation Administrative Fee available for use. The following information is necessary for the establishment of a scholarship account within the Louisiana Tech University Foundation.

Definitions:

Not Applicable.

Procedures:

Name

The donor has the opportunity to name the Scholarship, i.e., the John L. and Jane C. Doe Memorial Scholarship in Music. A named scholarship is an excellent opportunity to honor or memorialize someone.

Type

The scholarship is either endowed or expendable. (See above for explanation.)

Area

The donor may choose to make the scholarship general in nature, or the donor may choose the academic area for the scholarship. For example, the scholarship may benefit a student majoring in engineering, or, more specifically, chemical engineering. Donors are asked not to be too restrictive in this area so that the pool of applicants for the scholarship is not unduly small.

Amount

Scholarship monies available from endowments are determined by the Asset Management Committee of the Foundation Board of Directors.  All endowed funds that are fully endowed on August 31 of a given year will provide a spendable allocation for the following academic year.  For example, an endowment with a $25,000 balance on August 31, 2020 will provide a spendable allocation for the 2021-22 academic year.

Fees

The administrative fee for establishing an endowment is 5% of the principal. That fee may be paid by the donor, or it is deducted from the earnings prior to the awarding of the first scholarship. An annual management fee of 1% of the corpus is charged by the Foundation for the management of the account

Criteria

Criteria for making awards of scholarships should be as broad as possible. Below are examples of some criteria:

  • Awards will be made to incoming freshmen with majors in the College of XXX or the XXX Department or School.
  • Recipient(s) must have demonstrated financial need as determined by the Financial Aid office.
  • Recipient(s) must have earned a cumulative grade point average of at least 3.0.
  • Preference will be given to students from XXX Parish, XXXX County of XXXX State though any student meeting criteria is eligible.
  • Other criteria to consider are status as a full or part-time student and whether the scholarship shall be renewable.

Selection

If the scholarship is designated to a particular academic area of the University, the scholarship committee of the college or school shall be the selecting body. General scholarships are awarded by the Scholarship Committee of the University.

Provision

The following provision, or language that is substantially similar in effect, should be included for endowments: “In the event that the original purposes stated in the endowment agreement can no longer be carried out due to changing conditions, the Foundation, through its Board of Directors, shall have the power to modify the purposes to the extent necessary to enable the endowment to be used. Any such alternative use shall be for a purpose which most closely coincides with the donor’s primary original intent.”

Documentation

The final endowment agreement is created in duplicate and signed by the donor(s) and Foundation officials. One fully executed copy is for the donor; the other is kept on permanent file in the Foundation office.