Q: When is endowment payout distributed?
A: Endowment payout for the whole fiscal year is distributed to regular university operating departments in the July accounting period, at the end of the calendar month. In rare cases, noted below, payout will change during the fiscal year after this initial July distribution.
Q: Why does my endowment payout sometimes change during the fiscal year?
A: Endowment payout normally does not change after the July posting. However, in cases where new gifts are added to endowment principal after the fiscal year starts (or, in rare cases, principal is liquidated), endowment payout is adjusted on a quarterly basis to reflect the principal change. See the Endowment spending example for calculations and timing for funds that experience unit changes during the fiscal year.
- in July through September (Q1) are reflected in payout changes posted in the October accounting period;
- in October through December (Q2) are reflected in payout changes posted in the January accounting period;
- in January through March (Q3) are reflected in payout changes posted in the April accounting period; and
- in April through June (Q4) are reflected in payout changes posted in the June accounting period, during the third close.
Payout also may change in cases where an approved change in the distribution chartstrings or amounts has occurred. The Office of Planning, Budget, and Analysis will be in touch with the department manager about any chartstring or distribution rule changes that your office or the Provost’s Office directs.
Q: What happens if I withdraw principal from a fund during the fiscal year?
A: The payout posted at the beginning of the fiscal year is based on the principal balance at that time. However, as noted above, payout will be adjusted downward following any quarter in which principal is liquidated. Any liquidation of principal and its effect on payout will be discussed by the Office of Planning, Budget and Analysis and affected departments, and is exceedingly rare.
Q: Payout from an endowment fund flows to a department and/or program that I want to change, so that I do not have to re‐assign the balance to another string each year or there is a change in the departmental structure. How do I make that ongoing change?
A: Contact the Endowment Distribution Manager, Tatiana Tkachuk to request a change in the “receiving chartstring” for the endowment in question.
Q: I can no longer use the endowment payout for the purpose stipulated in the fund’s restrictions or my annual endowment payout revenue significantly exceeds what we can spend. Who should I contact to discuss this?
A: Contact Tatiana Tkachuk and Steve Semenuk in the Office of Planning, Budget and Analysis for further compliance review and instructions.
Q: How can I see fund restrictions, endowment payout and available balances on my operating reports?
A: Endowment payout is visible on a number of standard Prime Financials reports (see more details in Information Warehouse (IW) FAQs):
- Fund Restriction with Payout and MV/BV‐ by source fund and receiving chartstring—This report shows an annual payout from a selected endowment fund(s), as well as detailed fund restrictions and current principal values. Use Spendable balance report to see available balances for receiving chartstring.
- Spendable Balance—This report shows combined amount of payout revenue and fund assignments in the “revenue/expense budget” column and reflects spendable balances for the selected period. Use Revenue and Expense report for summary view at account/account category level.
- Revenue and Expense—This report unpacks revenue categories reflected as combined amount in the Spendable Balance report. The payout is reflected in the “Investment Income” account category; or on Account “4471‐ Invest Inc‐Distr‐Primary Pool” when running the “account details” version of the report. It is recommended to check “No” for the Display Budget & Variance section in a prompt page, when running the report for non-General Fund activity. Monthly Actuals ‐‐ on Account “4471‐Invest Inc‐Distr‐Primary Pool”. This view allows you to see endowment payout over three fiscal years for the selected chartstring(s).
- Ledger Detail—on Account “4471‐Invest Inc‐Distr‐Primary Pool” for as many years as the viewer selects.
Q: How can I see the book and market value for endowments that my department manages?
A: In Prime Financials, run the “Fund Restriction with Payout and MV/BV” report for the fund(s) in question. The right‐hand columns show the latest principal values, and allow the viewer to drill into prior‐period book and market value history.
Please do not share principal Book and Market values with donors or any other contacts without prior consultation with Advancement and Planning, Budget and Analysis offices.
Q: My endowment’s payout did not change by the same rate as the reported endowment performance for the year. Why not?
A: Endowment fund payout is governed by the payout per unit rate approved by the Trustees each year, not by the favorable or unfavorable change in endowment market value or reported performance. In normal years when no special endowment payout change is announced, payout per unit changes from year‐to‐ year by the standard Payout Inflator Assumption, currently a 4% per year increase.
Q: What is the IAC?
A: The “IAC” is the Infrastructure and Administrative Charge which helps offset some of the central costs that the University incurs to support endowed activities, such as building maintenance, administrative services, information systems, and financial systems. The Princeton University Board of Trustees approved the establishment of the Infrastructure and Administrative Charge at its January 2011 meeting. Review the full Infrastructure and Administrative Charge Policy.
Q: How do you charge the IAC?
A: The IAC is deducted centrally before payout is distributed to departments for spending. Thus, you see only the net spending distribution in your departmental endowment chartstrings.
Q: What is the IAC rate?
A: The current IAC rate is 8% of gross annual endowment payout. See the IAC Policy for an illustrative calculation of the IAC and net endowment payout.
Q: If I have any other questions about endowment‐related matters, who can I call?
A: Please contact Tatiana Tkachuk, Endowment Distribution Manager, in the Office of Planning, Budget and Analysis: [email protected] or (609) 258‐1787.