Establishment, Investment, and Use of Quasi-Endowment Funds

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

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.)

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 Finance Committee.

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

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

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)