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Understanding Your Fund Report

Definition of Terms

Annually Funded Scholarships—These funds are expendable funds to which donors pledge annual contributions. The foundation must receive contributions by January 15 in order to make scholarship awards for the next academic year. No administrative fee is charged to Annually Funded Scholarships. A fundraising fee determined by the foundation board may be assessed to certain contributions such as telemarketing and planned gifts.

Change in Market Value—Gains and/or losses from the foundation’s investment portfolio, net of investment fees, attributed to Legacy Funds.

Committed Amount—Monies encumbered for a specific expense but not yet dispersed.

Contributions—Gifts by donors to a fund or endowment.

Deposits—Monies added to a fund other than contributions (e.g. event fees).

Disbursements—Monies paid from the spendable amount for the purposes designated in the agreement.

Endowed Amount

Stable Value Fund—The cumulative value of all endowed contributions valued on the date of each gift, less fundraising fees, plus any reinvestments.

Legacy Fund—The current market value of all endowed contributions (increased or decreased by investment returns), less fundraising and administrative fees.

Endowments—The foundation currently offers three types of endowed funds.

Stable Value Fund EndowmentThe cumulative value of all endowed contributions (valued on the date of each gift), less fundraising fees, plus any reinvestment, represents the endowed amount. The fund balance includes the endowed amount, the available spendable amount, and the committed amount. A percentage, as determined by the foundation board, of the fund balance is available as a spendable amount for the purposes designated in the agreement. The Stable Value Fund does not participate in investment gains or losses. The donor may choose to reinvest a percentage of the fund balance back into the endowed amount for long-term growth. In addition to providing the spendable amount for the support of the designated purposes, investment earnings may be spent on board approved priority needs of Ball State University, which may include fund administration expenses. No administrative fee is charged to a Stable Value Fund. A fundraising fee determined by the foundation board may be assessed to certain contributions such as telemarketing and planned gifts. Currently, endowed contributions totaling $25,000 are required to establish a Stable Value Fund.

Legacy Fund Endowments—The current market value of all endowed contributions (increased or decreased by investment returns), less fees, represents the endowed amount. The endowed amount, the availablespendable amount, and the committed amount form a fund balance that participates in the earnings, gains, and losses of the foundation’s investment portfolio on a total return basis. A percentage, as determined by the foundation board, of the fund balance is available as a spendable amount for the purposes designated in the agreement. If investment earnings are insufficient during a period of time to provide for the annual expenditures, the Legacy Fund balance may decline below the total of cumulative endowed contributions. This decline will also result in a reduction of the amount available for support of the purposes designated in the agreement, but since there is no guaranteed minimum fund balance, support for these designated purposes will continue. Administrative fees are assessed as determined annually by the foundation board. A fundraising fee determined by the foundation board may be assessed to certain contributions such as telemarketing and planned gifts. Currently, endowed contributions totaling $50,000 are required to establish a Legacy Fund.

Conversion Endowments—Fund agreements may allow for an automatic conversion from a Stable Value Fund to a Legacy Fund if applicable endowed contribution minimums are met. The fund will be managed as a Stable Value Fund until such time it meets the requirements for a Legacy Fund. Starting at the beginning of the next quarter, the fund will be managed as a Legacy Fund.

Expendable Funds—These funds are not permanent endowments. All contributions to these funds are wholly expendable. Administrative fees are assessed as determined annually by the foundation board. A fundraising fee determined by the board may be assessed to certain contributions such as telemarketing and planned gifts.

Expendable Funds with Earnings—The foundation currently manages certain expendable funds to which earnings are attributed. The foundation board shall annually approve the spending, investment, and fee policies to be applied to all expendable funds that receive earnings. Existing expendable funds that receive earnings shall continue to receive earnings; however, the foundation shall not assign earnings to future expendable funds unless authorized by the foundation president or by the foundation board such as in cases where expendable funds are being accumulated for capital projects or other special purposes.

Fees—Charged to a fund pursuant to the foundation board approved fee policy. Please see page 3 for the current fee schedule.

Fund Balance

Stable Value FundThe fund balance includes the endowed amount, the available spendable amount, and the committed amount. The fund balance does not participate in investment gains and losses.

Legacy Fund—The fund balance includes the endowed amount, the available spendable amount, and the committed amount. The fund balance does participate in investment gains and losses.

Reinvestments—Stable Value Fund donors may choose to reinvest a percentage of the fund balance back into the endowed amount for long-term growth. If this option is chosen, the spendable amount will decrease by the amount of the annual reinvestment. Reinvestments are added to the endowed amount.

Spendable Amount—Amount available for purposes designated in the fund agreement.

Stable Value Fund Endowments—A fund is eligible for the payout rate if the endowed contribution minimum has been met. Amount is calculated semiannually by multiplying the average fund balance for the previous six months by one half the current spending rate as determined by the foundation board. This amount may be reduced by the reinvestment election.

Legacy Fund Endowments—A fund is eligible for the spending rate if the endowed contribution minimum has been met by the first day of the current quarter. Amount is calculated semiannually by multiplying the semiannual fund balance by one half the current spending rate as determined by the foundation board.

University Scholars Endowment—This is a pooled scholarship endowment that provides awards for current strategic priorities. For a minimum gift of $6,000, a scholarship, as named by the donor, is permanently listed as a participant in the pooled fund. For a minimum gift of $25,000, a specific student is awarded the scholarship with an opportunity for the donor to meet the student at an annual event hosted by the university.