Arts and Sciences Foundation
BOARD OF DIRECTORS Finance and Audit Committees
October 1, 2026
UNC Arts and Sciences Foundation, Inc. Finance Committee Meeting Thursday, October 1, 2026 South Building 218A – Provost’s Conference Room 1:30 p.m. – 3:00 p.m.
1:30 p.m.
Welcome and Introductions
Matt Guest
1:35 p.m.
Finance Committee Minutes April 2026 (action item)*
Matt Guest
1:40 p.m.
FY 2025-2026 Audit Report (action item)*
Robert Lewis, CPA Blackman & Sloop
2 p.m.
Arts and Sciences Foundation Budget Review th
2:10 p.m.
Jacob Bacharach
FY 2025-2026 Budget Report (4 Quarter/Final)
and Alison Yerger
Resolutions to Update Two Funds’ Purposes
Matt Guest and
(action items)* •
Joanna Cardwell
Kenneth J. Reckford Graduate Student Fellowship Fund in Classics
•
John L. Sanders Award for Distinguished Undergraduate Teaching and Service
2:20 p.m.
UNC Management Company Investment Report
Ed Hetherington, Senior Vice President and Managing Director
2:55 p.m.
Closing Remarks and Adjournment (action item)*
Matt Guest
Arts and Sciences Foundation Board of Directors Minutes of the Finance and Audit Committees Meeting April 16, 2026 On Thursday, April 16, 2026, the Finance and Audit Committees of the Arts and Sciences Foundation Board of Directors met at the Dean’s Conference Room in 205 South Building at 1:30 p.m. The following directors, staff and guests were present: Board of Directors Susan Alesina Jacob Bacharach (Treasurer) Douglas Biggs
Touré Claiborne Robert Edwards Matt Guest
Alec McLean Ken Smith (Chair)
Staff Members David Driscoll Katy Galbraith
Nela Parsons Layla Tremalio
Alison Yerger
Guests Ed Hetherington (UNC Management Company) Call to Order The meeting was called to order at 1:30 p.m. by Ken Smith. Approval of the Minutes The Finance Committee approved the minutes from the Finance and Audit Committees meeting held on October 3, 2025. Fiscal Year 2025-2026 Budget Report and Summary (3rd Quarter) The Finance Committee reviewed the fiscal year 2026 budget report as of March 31, 2026. Jacob Bacharach, senior associate dean of operations and strategy, reported on the FY26 budget report for the period that ended March 31, 2026. For the period ended March 31, 2026, total revenue was $6,837,612 and total expenses were $6,301,105 with a surplus of $536,507. Revenue Highlights Arts and Sciences Fund contributions, as of March 31, 2026, totaled $1,914,861. This amount includes all gifts that have been processed on the accounting ledger as of March 31, 2026.
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Endowment Administration Fee (EAF) maintained the same rates as the previous years: 60 basis points to the College of Arts and Sciences (owning unit), 20 basis points to University Development, and 20 basis points to the OneCarolina Development Investment Fund, which is directed to support University Development. FY 2026-2027 Proposed Operating Budget Mr. Bacharach presented the Foundation’s budget request for fiscal year 2027. The request reflects an overall increase from the approved budget for FY26. This is attributable to significant hiring and an upcoming University-wide campaign. Revenue Highlights: Arts and Sciences Fund The FY27 revenue goal for the Arts and Sciences Fund will increase to $2.5 million. The Foundation expects to transfer the full amount to support the Dean’s discretionary grant. Endowment Administration Fee (EAF) We anticipate that the FY27 EAF distribution will maintain the same rates as previous years: 60 basis points to the College of Arts and Sciences (owning unit), 20 basis points to University Development, and 20 basis points to the OneCarolina Development Investment Fund, which supports University Development. We are conservatively estimating a 5% increase, or $317,934, in net revenue distribution for FY27. The Arts and Sciences Foundation anticipates starting the fiscal year with roughly $6.95 million in balances across accounts at Truist Bank and the University. University Interest Income We are estimating $4,000 in University Interest Income for FY27. Truist Money Market/Investment Income In the first quarter of FY27, we expect to transfer $200,000 out of our Truist investment account to be used to pay for significant renovations of Buchan House. We anticipate small earnings in the Truist money market account. We conservatively estimate $166,297 in interest, based on a money market rate of 3.48 percent. Expense Highlights: Personnel – The FY27 budget reflects an increase. The Foundation has budgeted for organizational growth that includes additional frontline fundraiser positions and increased operational and donor relations support. The increase in staffing will position the Foundation to raise additional funds in the upcoming campaign. We anticipate scaling the organization’s workforce by adding six to eight positions in FY27 beyond our FY26 peakstaffing levels. Note that this plan includes converting an existing intern position to a fulltime position. Additionally, several positions at the Foundation are funded, in part, through funds outside of the Foundation. 2
Travel – We anticipate significant increases in travel expenses during FY27, given the growth of the development team. The proposed travel budget reflects the peak travel levels of FY19—with an additional 5 percent increase over FY19 expenses corresponding to inflation and rising costs across all travel categories. Building Debt Service – This is the debt service on Buchan House, and this cost remains the same during FY27. Special Events/ Entertainment – This budget includes both Foundation board meetings, two Deans’ Arts and Sciences Leadership Council meetings, regional events and other donor gatherings. While we project this category will likely finish FY26 a little under budget, we anticipate that planned events for FY27 will bump expenses back up to the anticipated FY26 level. Accordingly, we have kept the FY27 budget flat with respect to FY26. Communications and Postage – This category includes postage charges for development, donor stewardship, and annual giving solicitation costs. Stewardship and donor relations focus on donor stewardship and endowment reports, major and principal gift proposals, donor acknowledgments, and producing custom solicitation materials. We project finishing FY26 a little under budget in this category, and we have reduced the FY27 budget accordingly. Building Maintenance – This category includes operating maintenance for Buchan House. For improved facility management and unexpected occurrences, we maintain larger balances for unforeseen events. The Foundation will continue to scale with the upcoming capital campaign. To optimize space for our growing workforce, there are renovation plans for Buchan House to increase offices, workstations and conference rooms over the current capacity. Based on recent quotes of close to $200,000, we have earmarked $100,000 in this budget category for expenses for these renovations to take place in FY27. We are estimating to spend the other $100,000 of this renovation on capital improvements to the property. (This second $100,000 would come from the Foundation’s Buchan House source (C5277), which is outside of this budget.) Legal/Accounting – The FY27 proposed budget includes auditing and tax preparation fees, annual state solicitation renewals, and the annual charge from the University for the associated entities operating agreement — which covers support from central Accounting Services. The associated entities operating agreement will be renewed in FY27 and there may be an increase to the annual fee of $14,000. The Foundation will continue the contract with Copilevitz, Lam & Raney, P.C. in processing the state solicitation renewal forms. We expect to finish FY26 over budget for legal expenses. We also anticipate increases in legal expenses in FY27 over what was budgeted for FY26; thus, we have increased the FY27 budget for this category.
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Office Supplies/Equipment – Primary expenses are for general office supplies and computers/printers. We project exceeding our budget for FY26. We have increased the FY27 budget in this category to be more consistent with FY26 spending levels — which includes supplying computer equipment for new hires as the organization continues to grow. Other Services/Miscellaneous – This category includes the budget for prospect management research tools and staff professional development as well as employee engagement activities. We project to finish FY26 under budget. We have reduced the FY27 budget for this category to reflect FY26 spending levels. Insurance – Due to the anticipated annual increase in insurance premiums, as well as the addition of a new cyber security insurance policy, we have increased the insurance budget for FY27 by a small amount. The Dean’s discretionary grant (Arts and Sciences Fund) is made at the end of each fiscal year and comes from unrestricted contributions to the Arts and Sciences Fund. For FY27, we anticipate allocating the entire amount raised to the Dean’s discretionary fund. UNC Investment Management Report The Finance Committee reviewed the performance of the UNC Management Company. Ed Hetherington, senior vice president and senior managing director of the Public Investments team at the UNC Management Company, presented the performance report for the UNC Investment Fund (UNCIF). The Fund’s primary objective is to maintain the purchasing power of its underlying funds after accounting for spending distributions and inflation over the long term. Annualized returns in excess of approximately +8.0 percent are deemed to have achieved this target. The most important and difficult challenge remains striking the proper balance between upside participation and downside protection. The UNC Investment Fund returned +18.5% for CY 2025. The Fund maintains top decile performance. UNCIF has produced 10.7%+ annualized returns and top decile performance over the medium- and long-term. The Fund’s +10.7% 10-year return [top decile (1)] beats SIPP’s +8.9%. For the period ending December 31, 2025, the Fund’s 5-, 7- and 10-year annualized returns beat SIPP and the Global 70/30 Portfolio and are in the top decile relative to peers over the medium and long term.
4
1 Year
3 Years
5 Years
7 Years
10 Years
18.5%
11.9%
11.7%
12.5%
10.7%
UNCIF is off to a great start in FY 2026, returning +21.0% for the first eight months of the fiscal year. UNCIF’s indirect exposure to a private company was adjusted upward in January to reflect the company’s latest valuation, resulting in an aggregate valuation increase of approximately $1.2 billion for UNCIF’s exposure. Supported by global equities, UNCIF returned +18.5% for CY 2025 and with exposure to a private company providing an extremely strong tailwind, UNCIF has returned +21.0% for FYTD 26. Adjournment With no other discussion needed, the meeting adjourned at 2:30 p.m.
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UNC-CH Arts and Sciences Foundation, Inc. Operating Budget Fiscal Year 2025/2026 As of June 30, 2026
Approved Budget
% of Budget
2,899,921
$ 2,150,000
134.9%
4,478,274
4,061,133
Less allocation to Central Dev
(895,655)
Less allocation to One Carolina
YTD Actual as of 6/30/25 $ 6,121,845
FY 2024-2025
Approved Budget
% of Budget
2,377,755
$ 2,000,000
118.9%
110.3%
4,061,133
4,148,070
97.9%
(812,227)
110.3%
(812,227)
(829,614)
97.9%
(895,655)
(812,227)
110.3%
(812,227)
(829,614)
97.9%
Net Foundation Endowment Fee
2,686,964
2,436,680
110.3%
2,436,680
2,488,842
97.9%
University Endowment Fee
6,119,511
5,668,128
108.0%
5,668,128
5,981,732
94.8%
Less allocation to Central Dev
(1,223,902)
(1,133,626)
108.0%
(1,133,626)
(1,196,346)
94.8%
Less allocation to One Carolina
(1,223,902)
(1,133,626)
108.0%
(1,133,626)
(1,196,346)
94.8%
3,671,707
3,400,877
108.0%
3,400,877
3,589,039
94.8%
Beginning Fiscal Year Balance
YTD Actual as of 6/30/26 $ 6,599,386
FY 2025-2026
Revenue Arts and Sciences Fund contributions*
$
Foundation Endowment Fee
Net University Endowment Fee External Support / Other Revenue
3,000
-
197,698
19,500
1013.8%
$
9,459,290
$ 8,007,057
118.1%
Personnel
$
4,898,255
$ 5,091,910
Travel
$
251,278
Building debt service
$
Special events/entertainment
$
-
-
219,268
180,000
121.8%
8,434,580
$ 8,257,881
102.1%
96.2%
4,432,358
$ 5,185,115
85.5%
190,000
132.3%
161,067
200,000
80.5%
225,197
225,198
100.0%
225,197
225,198
100.0%
$
146,429
150,000
97.6%
183,752
175,000
105.0%
Communications and Postage
$
115,440
150,000
77.0%
127,707
150,000
85.1%
Building Maintenance
$
132,002
125,000
105.6%
122,052
125,000
97.6%
Legal/accounting
$
143,614
125,000
114.9%
99,549
75,000
132.7%
Office supplies/equipment
$
61,205
50,000
122.4%
113,616
50,000
227.2%
Other services/Misc.
$
109,620
115,500
94.9%
85,810
40,500
211.9%
Insurance
$
22,000
26,110
84.3%
23,262
24,480
95.0%
Total administrative expenses
$
6,105,039
$ 6,248,718
97.7%
$
5,574,372
$ 6,250,293
89.2%
Dean's discretionary grant from A&S Fund
$
2,899,921
$ 2,150,000
134.9%
$
2,377,755
$ 2,000,000
118.9%
Total Expenses
$
9,004,960
$ 8,398,718
107.2%
$
7,952,127
$ 8,250,293
96.4%
Surplus (Deficit)
$
454,330
$
-116.0%
$
482,454
$
Balance as of 3/31/20XX
$
7,053,716
$
6,604,299
Interest income
Total revenue
$
Expenses Administrative expenses
Breakdown Arts and Sciences Fund contributions* Gifts: $2,765,121 Annuity Residual: $24,588 CONTRIBUTIONS SUBTOTAL: $2,789,709 Investment Income: $110,211 TOTAL: $2,899,921
(391,661)
7,588
6357.9%
The Arts and Sciences Foundation, Inc. Operating Budget Fiscal Year 2025/2026 as of June 30, 2026 Enclosed is a summary of the operating budget performance through the fourth quarter of fiscal year 2025-2026 (ending June 30, 2026). Summary Overall, our revenues were higher than expected, attributable to both a significant increase in the Endowment Administration Fee and the Arts and Sciences Fund exceeding its annual fundraising goal. Based on the fiscal year 2026 (FY26) approved budget, the Foundation utilized 97.7% of its expense budget. Accordingly, we finished FY26 with a $453,330 year-overyear surplus (instead of the budgeted $391,661 operating deficit for the year). Revenue: Arts and Sciences Fund As of June 30, 2026, the Arts and Sciences Fund raised $2,765,121 in gifts, surpassing the $2.15 million fiscal-year goal by 28.6%. This amount includes all gifts that have been processed on the accounting ledger as of June 30, 2026. This fund also received a $24,588 annuity residual distribution, as well as generated $110,211 in interest/short-term investment income (prior to transfer to the Dean’s discretionary grant account), which was not included in the public-facing FY26 Arts and Sciences Fund total. Please note: 1) In early FY26, the public-facing fundraising goal was increased from $2.15 million to $2.4 million. (The FY26 approved budget of $2.15 million remained the same.) 2) The $2,765,121 in gifts reflects the official accounting ledger (not the publicly reported figures from the University’s fundraising database). Endowment Administration Fee (EAF) The FY26 EAF distribution maintained the same rates as the previous years: 60 basis points to the College of Arts and Sciences (owning unit), 20 basis points to University Development, and 20 basis points to the OneCarolina Development Investment Fund, which is directed to support University Development. Due to a considerable improvement in fiscal year 2025 (FY25) market performance, the EAF net distribution increased by $521,114 (or 8.93%) over the previous year’s allocation. University Interest Income The Foundation received a modest $4,078 of short-term investment income/interest in our University account. (Note: This account was depleted during much of FY26 to front some
.
Coates Hall renovation pre-construction expenses. Those amounts, without interest, have since been “trued up”.) Truist Money Market/Investment Income The Arts and Sciences Foundation continues to maintain a checking and money market account with Truist Bank. Most of the funds with Truist are held within high-yield money market accounts or treasury bills. To maintain short-term earnings alongside low-risk liquidity, the Foundation purchased $4.5 million in treasuries using the balances held within the Truist Bank money market account in January 2024. In August and November 2024, the Foundation redeemed our second and third treasury bills at $1.25 million and $2.5 million, respectively. With these redemptions, we purchased additional bills and invested $205,377 into a Lighthouse Group’s money market account for additional liquidity. There were additional redemptions in January 2025 and February 2025. The entire Truist investment portfolio is currently held in the BNY Dreyfus Government Securities Cash Management Administrative Shares fund (DAPXX), a low-risk money market mutual fund holding primarily short-term U.S. government securities. This fund generated $192,872 in interest in FY26, and the balance increased to $4,983,172 by the end of the fiscal year. Expenses: Personnel is slightly under budget for the year. Hiring frontline fundraisers was the primary focus in FY26. Travel is markedly over budget for the fiscal year, as the Foundation’s development team grew considerably over the past year, and, in turn, the volume of donor travel increased significantly. Additionally, FY26 saw a rise in costs across all travel expense categories. The additional investment in travel has yielded an increase in the development pipeline. Building debt service is at budget. Special events/entertainment is just under budget. Communications and Postage expenses are under budget for the year. This category’s expenses include postage charges for development, stewardship, gift acknowledgment, and phonathon/solicitation costs. Building maintenance is slightly over budget. Buchan House requires significant HVAC repairs, which will hit the FY27 budget in the second quarter. Legal/accounting expenses again exceeded budget, but they were ultimately significantly less than what was anticipated during third-quarter projections. These costs and fees include payments for the audit, the 990 preparation costs, state registration fees, and the annual
.
charge from the University for the associated entities agreement, which covers support from central Accounting Services. The majority of the expenses went toward outside counsel. Office supplies/equipment are over budget. Other services/miscellaneous expenses are just under budget. This category includes subscription services used for prospect research; broadcast emails and stewardship of top donors; professional development opportunities for employees; and Truist banking fees. Insurance is under budget; however, some premiums budgeted for late-FY26 were charged in early-FY27. The Foundation pays for liability, property and umbrella coverage monthly. The Dean’s discretionary grant is allocated at the end of each fiscal year and comes from unrestricted contributions to the Arts and Sciences Fund. We allocated the entire amount raised to the Dean’s discretionary fund.
.
ARTS AND SCIENCES FOUNDATION, INC. RESOLUTION TO UPDATE FUND PURPOSE JOHN L. SANDERS AWARD FOR DISTINGUISHED UNDERGRADUATE TEACHING AND SERVICE OCTOBER 2, 2026 Whereas, the John L. Sanders Award for Distinguished Undergraduate Teaching and Service was established by Ben M. Jones III on October 20, 1995, in recognition of the contribution of Professor John L. Sanders, who worked to improve student life and governance at UNC; and Whereas, the gift agreement purpose specifies that awards would be focused on and given to tenured faculty in the College of Arts and Sciences, but could be awarded to deserving tenured faculty from other units of the University; and Wheareas, the Office of Undergraduate Education wishes to broaden the award eligibility to also include full-time teaching faculty, who now teach a large number of undergraduate courses and are a core part of the College curriculum; and Whereas, other distinguished undergraduate teaching awards at the University, including the Tanner Awards for Excellence in Undergraduate Teaching, now include fixed-term faculty members who have taught at UNC for at least five years; and Whereas, the gift agreement dictates that “a panel selected by the Dean and consisting of the Dean or his/her designee, two department chairs, the president of the student body and a nominee from the Student Congress will review all nominations received and make their selection(s) based upon established criteria”; and Whereas, the College of Arts and Sciences wishes to remove the requirement that students be required members of the selection panel and instead utilize the University Teaching Awards subcommittee for undergraduate teaching awards, which includes faculty from across the University, including previous award recipients and tenured, tenure-track, and fixed-term faculty. Members represent a range of schools, departments, disciplines, and teaching experiences; and Whereas, the gift agreement includes the clause language that “If, in the opinion of the Board of Directors of the Foundation, all or part of the gift cannot appropriately be used at some future time in the manner herein described, the Board may use the gift for purposes as nearly aligned to the Donor’s original intent as the Board deems appropriate under the circumstances”; and Whereas, updating the purpose language for the John L. Sanders Award for Distinguished Undergraduate Teaching and Service to open the award to both tenured and teaching faculty and to remove the requirement of student participation on the panel would continue to respect Jones’s wishes to honor John L. Sanders while making the awards process more streamlined and in line with other University teaching awards;
Now Therefore Be It Resolved, that the eligibility criteria and selection process of the John L. Sanders Award for Distinguished Undergraduate Teaching and Service be updated to the following: “This award will be focused on and given to tenured faculty or teaching faculty who have taught at UNC for at least five years. Excellence in the teaching, advising and mentoring of undergraduate students in a manner consistent with the life and values of John L. Sanders shall be the primary criteria for the award. The award will be made on an annual basis in the spring. Nominations for the award will be solicited each year by the Craver Family Dean of the College of Arts and Sciences or his/her designee, and may come from students, colleagues, alumni or parents. The review and selection process will be handled by the University Committee on Teaching Awards, and will be administered by a subcommittee that includes faculty from across the University, including previous award recipients and tenured, tenure-track and fixed-term faculty. Members represent a range of schools, departments, disciplines and teaching experiences.”
ARTS AND SCIENCES FOUNDATION, INC. RESOLUTION TO UPDATE FUND PURPOSE KENNETH J. RECKFORD GRADUATE STUDENT FELLOWSHIP FUND IN CLASSICS OCTOBER 2, 2026 Whereas, the Kenneth J. Reckford Graduate Student Fellowship Fund in Classics was established by Dr. Kenneth J. Reckford on January 19, 2006, with a lead gift of $150,000 to provide an outstanding graduate student with tuition and support for five years; and Whereas, the endowment never reached the minimum level needed to fully support a graduate fellowship, and the department of classics has needed to accumulate annual payouts for multiple years in order to build up enough funds to support a student for five consecutive years; and Whereas, the annual distribution from the Reckford endowment as of June 30, 2026, was $35,639.34, while the average annual minimum required to fully fund a graduate student is approximately $40,200 per year, with expenses steadily increasing; and Whereas, named graduate fellowships typically include stipend amounts above the minimum level, and the Reckford Graduate Fellowship has traditionally been modeled on the Graduate School’s prestigious Royster Society of Fellows program, which would increase annual funding costs to more than $58,000 per year; and Whereas, the department of classics has expressed an immediate need for top-up fellowship support to recruit outstanding students to more fully support the department’s core mission of teaching and research; and Whereas, broadening the purpose language for the Kenneth J. Reckford Graduate Student Fellowship Fund in Classics to include top-up graduate fellowships would continue to respect Reckford’s desire to provide graduate fellowship support while giving the department of classics the flexibility to more fully utilize the funding to attract the best graduate students; Whereas, the gift agreement includes the clause language that “If, in the opinion of the Board of Directors of the Foundation, all or part of the gift cannot appropriately be used at some future time in the manner herein described, the Board may use the gift for purposes as nearly aligned to the Donor’s original intent as the Board deems appropriate under the circumstances”; Now Therefore Be It Resolved, that the purpose of the Kenneth J. Reckford Graduate Student Fellowship Fund in Classics be updated to the following: “The income of the Fund shall be disbursed at the direction of the Craver Family Dean of the College of Arts and Sciences, after consultation with the chair of the Department of Classics, to provide renewable top-up fellowships to outstanding graduate students for up to five years. Funding for the second through fifth years will be conditional upon the students making satisfactory progress towards the degree in the preceding year. The amount and number of awards will be dependent upon available income. If at some future time, the Fund reaches the level necessary to award a full graduate fellowship, the Fund may revert to the purpose as stated in the original gift agreement.”
The End