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Handbook of Operating Procedures
Chapter 9 - General Provisions
Publication Date: March 23, 2000
Responsible Executive: VP for External Relations

9.20 Guidelines for Managing Endowments

These guidelines are provided to ensure that assets given to the University are accepted, managed, and invested to provide maximum benefit to the University and to minimize the risk.

  1. Endowment Agreements

    A written document referred to as a "endowment agreement" should be prepared in support of the gift. The endowment agreement may be in a letter from the donor, a will or a trust. If, subsequent to the original gift, any person or entity is allowed to make additions to the endowment, the agreement should state that such additions must be made subject to the provisions of the original endowment agreement, and will be considered permanent endowment funds. Wording of the endowment agreement should specifically address the following:

    1. The exact title of the endowment.

    2. The specific purpose for which endowment distributions are to be used.

    3. Such endowment shall never become a part of the Permanent University Fund, the Available University Fund or the General Fund of the State of Texas, and shall never be subject to appropriation by the legislature of the State of Texas.

    4. If, in the opinion of the Board of Regents, circumstances change so that the purposes for which the endowment was originally established become illegal, impractical or no longer able to be carried out to meet the needs of the University, the Board of Regents may designate an alternative use for the endowment payout, giving due consideration to the donor's special interests as evidenced in the original endowment agreement.

    5. Endowment funds may be commingled with other University funds for the purpose of maximizing earnings on investments.

    6. Funds distributed from the endowment in one year may be retained and expended for the purposes of the endowment in subsequent years, or may be reinvested at the discretion of the Board of Regents or the University of Texas at San Antonio administration, as a permanent addition to the principal of the endowment.

  2. Distributions from Endowments

    1. Endowment distributions may include income, defined as dividends, interest, and other income, and net appreciation of endowment principal, both realized and unrealized.

    2. All endowment distributions designated for support of academic positions which are unfilled will be reinvested except for those amounts which must be used to pay necessary recruiting expenses related to filling the unfilled academic positions.