Current Spending and Payout Rates

The Ball State University Foundation Board of Directors annually reviews the spending, payout, and fee policies to maintain balanced investment and spending strategies that provide steady, continuous income while allowing for inflation and market conditions over time.

For fiscal year 2017, the Stable Value payout rate was 3 percent and the Legacy Fund spending rate was 4.5 percent. The board has approved a 2.5 percent Stable Value payout rate and a 4.5 percent Legacy Fund spending rate for fiscal year 2018. The board will continue to closely monitor the economic environment and will be prepared to make adjustment as necessary.

Current Fees

Annually, the foundation board authorizes the assessment of minimal fees to address the costs associated with raising funds, managing investments, and other administrative functions. Below is a description of the various fees.

  • Administrative
    Stable Value Funds and Annually Funded Scholarships are not subject to an administrative fee. Contributions and deposits to expendable funds are assessed a one-time 2 percent administrative fee at the time of the contribution or deposit. Legacy Funds are charged an annual administrative fee of 2 percent; one-fourth of the annual fee is calculated quarterly based on the average quarterly balance prior the rate of return calculation.
  • Planned Giving
    A 2 percent one-time fee is assessed on all matured gifts up to $1 million. A 1.5 percent fee is assessed on the excess. All funds are subject to this fee.
  • Telemarketing
    A 15 percent one-time fee is assessed when a gift is received as a result of a telemarketing call. All funds are subject to this fee.

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 Endowment
    The 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. 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 available spendable 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.
  • 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 Fund
    The 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.
  • 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.