2012 - 2013 ENDOWMENT REPORT
GUIDING INVESTMENTS Oklahoma City University bylaws call for an Investment Committee to set policy regarding the investment of endowment and other university assets. The President of OCU, the Chairman of the Board of Trustees and the Bishop for the Oklahoma Conference of The United Methodist Church are standing members. The Committee includes other members appointed for their experience and expertise.
These allocations reflect the investment of endowed funds for which the University’s investment committee maintains oversight.
BROAD ASSET ALLOCATIONS
A major function of the Investment Committee is to develop an investment policy and monitor the management of the endowment fund. The investment policy is reviewed at least annually by the Investment Committee and revised as necessary. Revisions must be approved by a majority vote of the Investment Committee, subject to ratification by the Board of Trustees.
2013-14 INVESTMENT COMMITTEE CHAIR: VICE-CHAIR: MEMBERS:
Richard Parry Robert J. Ross Dennis J. Dougherty, Tricia L. Everest, Michael Gardner, Gary B. Homsey, Bill Junk
40% 60%
• •
Equities & Alternatives Fixed Income
60% 40%
DETAIL ASSET ALLOCATIONS 2%
INVESTMENT OBJECTIVES Endowment funds are invested to maximize total return and meet income needs while managing the level of risk associated with these objectives by effectively diversifying the investments among different asset classes and securities. The long-term investment goal for the endowment is to achieve an annualized total return (net of fees and expenses), through appreciation and income, of at least five percent, plus the rate of inflation, as measured by the broad, domestic Consumer Price Index, thus protecting the assets against inflation.
ASSET ALLOCATION Asset allocation for the endowment is consistent with the investment objectives and risk tolerances expressed in the investment policy as adopted by the Board of Trustees. This policy, developed after examining the historical relationships of risk and return among asset classes, is intended to provide the highest probability of meeting or exceeding the fund’s return objectives at the lowest level of risk.
7%
6%
7%
36%
7%
16%
• • •• • • ••
19%
U.S. Equity Fund Fixed Income Fund International Equity Fund Inflation Protection Fund Notes Receivable Cash Alternative Investments Mineral Interests
36% 19% 16% 7% 7% 7% 6% 2%
ENDOWED FUNDS MANAGEMENT
SPENDING POLICY
The information charts on the back page of this brochure represent the entirety of endowed funds benefitting Oklahoma City University. The University traditionally reports these totals in aggregate form. The investment committee of the University’s board of trustees oversees approximately 60 percent of the total amount of endowment funds. Going forward, the annual OCU Endowment Report will include more specific reporting on the funds which are supervised by the OCU investment committee.
The amount that can be spent each year from the endowment for scholarships, faculty support and other related spending is established by the Board of Trustees. The current policy calls for quarterly distributions of 5% (on an annualized basis) of the ending market value for each month in the quarter. The spending policy is reviewed at least annually or more often, as needed, and may be changed at any time.
The information in this report represents a summary of the investment policy of Oklahoma City University and is not intended to be comprehensive in nature. For more complete information, contact Donna Nance, Chief Financial Officer, at (405) 208-5260.
GLOSSARY OF TERMS RELATED TO YOUR ENDOWMENT REPORT Cash Available for Spending Funds on hand that are available for use to support the purpose of your endowment.
Net Investment Income, Gains (Losses) Realized and unrealized gains and losses after expenses of consultant and investment managers.
Cash Balance Funds on hand that are not part of the permanently invested funds.
Other Additions/Changes Increases or decreases in corpus, market value or spending account balances resulting from something other than gifts or earnings. Examples include transfers from another endowment or correction of a prior year’s balance.
Chairs/Professorships Funds used to support the teaching and research efforts of an endowed faculty position. Corpus The total of the original gift to your endowment, any subsequent gifts and any excess earnings added permanently to the endowment. Earnings to Corpus Investment income that instead of being expended for the purpose of the endowment is added to the permanently invested funds. Gifts to the Endowment Contributions that are added to the permanently invested funds. Gifts to Spending Account Contributions not meant to be permanently invested, but rather intended for expenditure within a limited period of time. Market Value of Endowment The fair market value of your endowment at the beginning and end of the fiscal year.
Other Restricted Purposes Funds used to support endowed programs other than scholarships or chairs/professorships. Examples would be lectureships, research initiatives, building or operational support. Scholarship Funds used to support the educational endeavors of a student. Spending Policy Distribution Funds generated by the endowment to support the purpose of your particular fund (scholarships, for example). The spending policy, which is approved annually by the Board of Trustees, is the percentage of the market value of the endowment that can be expended each year. The policy allows for the use of both realized income and capital appreciation as components of the spending distribution.
MARKET VALUE OF ENDOWMENT / JUNE 30
TOUCHING MANY LIVES
Dollars in Millions
100 80 60
83.9 65.9
86.9
73.3
83.7
79.4 65.3
81.8
89.7
71.6
40 20 0
WAYS TO FUND AN ENDOWMENT GIFT 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
EXPENDITURES FOR THE BENEFIT OF OCU
2 0
$5,036,524
$4,312,149
$3,975,856
$4,078,973
$3,722,119
$4,506,421
$8,608,538
4
$4,456,809
6
$3,470,679
8
$3,328,666
10 Dollars in Millions
For the fiscal year ended June 30, 2013, 1,235 OCU students received funding from 367 endowed scholarships.
Total $45,496,734 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
18.2%
8.0%
12.8%
10.24%
10.4%
9.6% 7.5%
4.0% 0.0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
-4% -8%
-1.5% -5.8%
-12% -16% -20%
-18.7%
Securities – stocks, bonds or mutual fund shares offer special tax benefits; Bequest through a will or revocable living trust; Charitable remainder trust or gift annuity – pays lifetime income to donor or other beneficiary, then funds endowment at the income beneficiary’s death.
WE’RE HERE TO HELP
Marty O’Gwynn VP for Advancement and External Relations mlogwynn@okcu.edu
17.8%
16.0% 12.0%
Cash – simply write a check payable to OCU and designate it for endowment;
If you have questions about this report or are interested in establishing or adding to an existing endowment, please get in touch with the Office of University Advancement at (405) 208-7000; or contact:
TOTAL MARKET CHANGE 20.0%
If you are considering an addition to your endowment or planning to establish a new fund, there are a number of methods from which you can choose:
Amanda Davis Assistant VP for University Development ardavis1@okcu.edu Dale Ross Planned Giving Specialist dross@okcu.edu