Our Management of Your Endowment Gift
Who We Are
We are the successors of a group of far-sighted community leaders who, in 1966, formed a separately incorporated not-for-profit foundation to encourage private donations to Wright State University. Today, as then, the Wright State University Foundation’s sole mission is to raise and distribute private support to help the university accomplish its strategic goals. We manage more than $149 million in assets so generously provided by our alumni and other community partners. As a qualified charitable organization, the WSU Foundation is exempt from taxes under Section 501(c)(3) of the Internal Revenue Code and annually files a Form 990 with the IRS. Our financial records are subjected to an annual audit by an outside, independent accounting firm. For copies of our latest Form 990s and audited financial statements, as well as other Foundation governing documents, please visit the documents and financial reports page.
Endowment Gifts
We are especially thankful to receive endowment gifts because they provide long-term funding for various goals and initiatives undertaken by Wright State University in support of its mission. An endowment is a donation made with the stipulation that the fund be maintained in perpetuity and that only investment earnings of the fund be spent on purposes specified by the donor. Endowments are created by people of vision who want the satisfaction of knowing that their gift will have a significant impact on the lives of current and future students at Wright State.
Your Endowment Gift
At the WSU Foundation, we recognize the planning and thoughtfulness that goes into establishing an endowment with us. We know you look long and hard before deciding on a charity that you can trust with your hard-earned resources. Therefore, we strive just as diligently to make sure that your gift works hard for the purposes you have identified as worthy of your support. You can trust the WSU Foundation to oversee and manage your gift so as to maximize the impact your gift will have on the students and programs at Wright State.
Investment Policy
Our investment strategy is spelled out in an investment policy statement (IPS) developed and approved by the Foundation’s Board of Trustees. The Foundation’s IPS stipulates that endowment assets be invested in a strategically balanced mix of 54% equities (stocks), 23% fixed income securities (bonds, and 23% alternative investments. Alternative investments include hedge funds, private equity, venture capital, and distressed debt. Endowment resources are invested in mutual funds of various investment styles in accord with the investment policy. We permit our manager to invest a small portion of our endowment portfolio based on current market conditions, but for the most part, we invest for the long run and avoid market timing.
Investment Objective
The aim of the Foundation’s IPS is to provide a predictable stream of funding to scholarships and programs supported by our donors. A second, no less important, objective is to grow the endowment so that future earnings preserve the endowment’s original purchasing power, thereby neutralizing the effects of inflation. We also seek to preserve the value of our endowment assets and to achieve long-term growth of the endowment principal without undue exposure to risk. In quantitative terms, the portfolio is invested so as to earn a total return of 5% over inflation. To evaluate the performance of our endowment portfolio, we compare our return to a composite benchmark index. We anticipate that investment results will outperform the benchmark over a full market cycle (generally defined as a three- to five-year period).
The MoM Approach
The Foundation utilizes the services of a manager of managers (MoM) to implement our investment philosophy. The MoM approach allows the Board of Trustees to focus on policy matters rather than the operational issues of managing portfolios. We have found that this model improves accountability, increases flexibility, enhances response time to changing market conditions, and focuses oversight on a single manager.
Our MoM
Since 2004, the Foundation has utilized the services of SEI Investments of Oaks, Pennsylvania, to manage its portfolios. Specifically, SEI is responsible for managing individual sub-fund managers and for monitoring their performance. The Foundation is responsible for monitoring the overall performance of SEI. SEI, which was founded in 1968, currently serves about 7,000 clients and manages or administers $648 billion in mutual funds and pooled or separately managed assets. Check out more about SEI at: www.seic.com.
Spending Policy
Each year, a portion of the earnings on the endowment portfolio is used to support the purposes you have specified. The WSU Foundation’s Board of Trustees has established a spending (payout) rate of 4.5% on a three-year moving average of each fund’s market value. By limiting the annual payout, the continued growth of the endowment (and consequentially earnings thereon) is encouraged. Using a three-year moving average in the calculation of spending limits helps insulate the amount available for spending from any severe year-to-year fluctuations in financial market performance.
Administrative and Gift Fees
All of our endowment funds are annually charged a 1.50% administrative fee to cover the costs of managing these assets. If the fee would result in a reduction of the endowment’s original value, it will be reduced or completely waived, as necessary.
Endowment Size and Performance
The Foundation currently manages more than 569 endowment funds valued at nearly $98 million. The latest five-year return on our endowment portfolio was 7.9%, higher than our policy target rate of 7.5%. This target rate is designed to provide significant spendable resources to the university, pay all related investment management fees, and provide sufficient principal growth to offset inflationary pressures.
Annual Endowment Report
Each year, the Foundation produces and distributes a report on the activities of your endowment fund. The report is distributed to you or anyone you want to receive it. It contains a narrative description of investment results, market activity, and any changes in the portfolio composition. If your endowment supports a scholarship or multiple scholarships, the name(s) of the student(s) that received support will be listed in the report. The annual report provides transparency that allows you to monitor our management of your gift and the impact it is having on Wright State and its students.
Questions/Concerns
We want you to be happy with the gift you have made to Wright State and, as such, we encourage your continued partnership with the Foundation. If you have any questions or concerns about this information or any of the information you should receive from the Foundation in the future, please feel free to contact us at any time. We thank you for continued desire to support our mission.
