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Index > Governance Policies > Establishment, Investment, and Use of Quasi-Endowment Funds

Establishment, Investment, and Use of Quasi-Endowment Funds

Purpose

The purpose of this policy is to establish the chain of review and approval for the creation and oversight of quasi-endowment funds.

Policy

Consistent with its past practice, Rhode Island School of Design (“RISD”) may from time to time wish to create “quasi-endowment” funds (also commonly known as “funds functioning as endowments”), which are invested funds that allow for the expenditure of both principal and income at RISD’s discretion.

Most commonly, quasi-endowments are established with RISD unrestricted funds (net operating income, unrestricted gifts or earned income), but in some cases a donor may wish to create a quasi-endowment for a specific purpose. During their existence, quasi-endowments will be invested and (except as provided below) used in accordance with RISD’s general policies for the investment and spending of its endowment. (Note:A quasi-endowment may not be established in an initial amount of less than $100,000.)

Procedures

To ensure appropriate oversight, any decision to establish a new or change an existing quasi-endowment or to make expenditures from a quasi-endowment of more than provided by RISD’s then-current general endowment spending policy will require the following approval(s):

  • Up to $1,000,000:The Senior Vice President for Finance and Administration, and President. (Note: A quasi-endowment may not be established in an initial amount of less than $100,000.)

  • $1,000,000.01 to $10,000,000:The Finance Committee of the Board of Trustees, upon the recommendation of the Senior Vice President for Finance and Administration, and the President.

  • More than $10,000,000:The Board of Trustees, upon the recommendation of the Senior Vice President for Finance and Administration, President and the Stewardship and Sustainability Committee.


Revision history

This policy was approved as of: 2/17/2021

Next scheduled review: Annually at the February Finance Committee meeting of the Board of Trustees

Responsibilities

Issuing Office

Office of the President

Responsible Officer

Senior Vice President, Finance and Administration

Individuals/offices required for review and changes

President

Senior Vice President, Finance and Administration

Finance Committee of the Board of Trustees (as outlined in procedures)