2.72.04 Endowment Funds, Term Endowment Funds, and Funds Functioning as Endowments  
  The purposes of this statute are to require that endowment funds, term endowment funds, and funds functioning as endowments be approved by the Board of Governors before they may be established, and to authorize the President or his/her designee to issue regulations governing the establishment and operation of approved funds.  
  An "endowment fund" (sometimes referred to as a "true endowment fund") is a fund created with the gift from a donor(s) with the restriction that the principal is not expendable or that the fund is to be treated as an "endowment fund".  
  A "term endowment fund" is an "endowment fund" for which the donor of the gift has stipulated that the principal may be expended after a stated period or on the occurrence of a certain event.  
  A "fund functioning as an endowment" (sometimes referred to as a "quasi-endowment") is a fund established by the institution with expendable monies to function like an endowment fund, but which may be totally expended at any time at the discretion of the institution. There is no requirement by a donor to not expend the principal.

Legislative History

Adopted 7-0; Official Proceedings 36:4755 (13 December 1991)