NOTICE: The Finance Policies and Procedures Manual, along with the previous manual, is undergoing changes. These sites are continually updated to reflect changes in business processes. If you cannot find the information you are seeking in these policies, email financecomm@unc.edu for more information.
Policies and Procedures

Policy 402 – Investment/Endowment Income Distribution

Effective
July 1, 2003
Last Updated
January 19, 2010
Responsible University Officer
University Controller
Responsible Unit
Accounting Services

Policy Statement

Annual distributions from the Investment Fund (UNC-CH Foundation Investment Fund, Inc.) to the University’s pooled endowment funds are generated based on an adopted distribution policy. The Board of Directors of the Investment Fund has adopted the following distribution policy:

1. A base distribution rate for the Investment Fund is set periodically at 5 percent of its average market value for the previous year.

2. Each year thereafter (until a new base is established or unless the Board determines otherwise), the distribution rate increases at the rate of inflation as measured by the Consumer Price Index over the preceding calendar year. Each year’s distribution, however, will be subject to a minimum rate of four percent and a maximum of seven percent of the Investment Fund’s estimated fiscal year-end market value.

In determining the distribution, all calculations are done on a per unit basis, weighted by the length of time each unit is owned by an account during the fiscal year.

Pursuant to this policy, in June of each year participants in the Investment Fund will receive a distribution of between four percent and seven percent of their beginning market value for the fiscal year ended in June of the previous year. This distribution will be available to meet current expenditures in the upcoming year.

Reason for Policy

The Investment Fund’s distribution policy attempts to accomplish two objectives:

a. Provide participants with a stable source of spending support at a rate which is sustainable over the long term.

b. Provide spendable funds for the annual budget of each participant in a stable stream.

Exclusions

None

Special Situations

None

Procedures

  • None

Additional Information

Frequently Asked Questions

None

Related Data

None

Contacts

SUBJECT CONTACT TELEPHONE FAX E-MAIL
Investment Accounting (Acct. Serv.) John Carlson 919-843-4476 919-962-3306 investments@unc.edu

History

Revised:
January 19, 2010