THE UNIVERSITY FOUNDATION. Annual Update. Fiscal Year

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1 THE UNIVERSITY FOUNDATION C a l i f o r n i a S t a t e U n i v e r s i t y, C h i c o Annual Update Fiscal Year

2 CONTENTS OVERVIEW 3 SIGNIFICANT BENEFITS FY FOUNDATION ACTIVITY 5 FUND-RAISING RESULTS FY AS REPORTED TO THE COUNCIL FOR AID TO EDUCATION 5 ENDOWMENT INVESTMENT MANAGEMENT 6 ENDOWMENT PERFORMANCE FY ENDOWMENT GIFT ASSETS FY PLANNED GIFTS / REVOCABLE BEQUESTS / TESTAMENTARY PROVISIONS 7 THE HERITAGE CIRCLE 8 CORNERSTONE ENDOWMENTS 8 THANK YOU 9 MEMBERS OF THE BOARD OF GOVERNORS 9 2

3 OVERVIEW The University Foundation has been chartered since June 1940 to perform as the University s auxiliary organization responsible for soliciting, accepting, and administering gifts to the University. This nonprofit corporation is formed under the provisions of Title XII, Part V, Division I of the California Civil Code, and the organization is dedicated to the exempt purposes as specified in Internal Revenue Code Section 501(c)(3). (TIN ) Through a formal Operating Agreement with the CSU Chancellor s office the Foundation s primary functions are outlined as follows: To promote and assist the educational services of California State University To enter into, make, and perform contracts and agreements To accept gifts of both real and personal property To receive bequests and devises by will or from trusts To serve as trustee of any trust in which this Foundation is a named beneficiary These functions are the exclusive responsibility of the Foundation, which will execute its role within the authority of Title 5, Sections and of the California Code of Regulations. 3

4 The University Foundation is under the direction of a Board of Governors composed of community members and university officers. Mr. R. Scott Chalmers, chair of the board in , provided extraordinary leadership as the organization experienced admirable growth. SIGNIFICANT BENEFITS FY The Foundation is responsible for significant financial distributions that benefit a broad range of our university stakeholders. There is a wide range of designations to which the Foundation distributes funding. The two primary university categories are student scholarships and academic programs. More that $2 million was provided for the University s programs and projects that enhance the institution s academic impact, such as creating the Center for Entrepreneurship and expanding our commitment to environmental education and sustainability with an endowed Chair of Environmental Literacy. Benefactors have provided Chico State with funding for over 950 scholarships which were distributed giving a total benefit to students of over $1.5 million. In addition, The University Foundation serves as a trustee, administering a wide range of charitable trusts and annuity accounts which provide current income to the designated beneficiaries. When any of these individual accounts terminate, the remaining corpus will benefit the university. Distributions FY $5,535,920 Institutional Support 33% Other 2% Academic Support 25% Scholarship, Grants 26% Public Services 14% Source: Audited Financial Statement June 30,

5 FOUNDATION ACTIVITY Managed an investment allocation that included alternative investment selections requiring systematic and diligent scrutiny Increased the volunteer membership of governors Implemented the guidelines for gifts supporting endowed academic chairs, professorships, and lectureships that included awarding the first fully endowed chairs Provided funding to Enrollment Management for academic performance awards, helping to attract high-performing students Supported the President s Scholars program with funding to recruit freshman applicants from across the western United States who are achieving at the highest levels FUND-RAISING RESULTS FY AS REPORTED TO THE COUNCIL FOR AID TO EDUCATION The campus fund-raising amount reported to the Office of the Chancellor for was in excess of $7,120,600. This figure represents approximately $1.7 million for Current Operations and $2.9 million for Current Capital. In addition, the Foundation received over $2.2 million through deferred gifts, testamentary commitments, and pledges. Private Support $7,120,618 Other Individuals 14% New Testamentary Commitments & Pledges 31% Parents 6% Foundations 14% Alumni 15% Corporations & Other 20% Source: VSE Report FY

6 Endowment Investment Management The Investment Policy states that a target allocation of 70 percent equities and 30 percent bonds will represent the overall portfolio strategy. Within this allocation, the Foundation holds funds through more than a dozen different managers, and each quarter the board reviews the historical performance and anticipated trends. Assisted by the professional counsel of Arnerich Massena & Associates (Portland, Ore.), the Finance and Investment Committee exercises a diligent approach to a long-term investment strategy, reporting to the Board of Governors at each meeting. Common indexed benchmarks are tracked to provide a relative comparison of performance and risk. Additionally, each year the Foundation reviews the performance and investment strategies of similar institutions. This process has helped the Foundation maintain prudent management and attractive returns. ENDOWMENT PERFORMANCE FY The University Foundation s return on its managed pool endowment fund through the fiscal year ending June 30, 2007 was percent. ENDOWMENT ALLOCATION & INVESTMENT PERFORMANCE FY Allocation 1 Year 3 Years Annualized Endowment s Equities 70% Endowment s Bonds 30% TOTAL 100% +15.1% +11.8% 6

7 ENDOWMENT GIFT ASSETS FY The University Foundation has $32.35 million of its endowment invested in a carefully managed account under the advisement of Arnerich Massena & Associates. The Foundation also holds an additional $2.77 million endowment invested with other professional managers. The University Foundation maintains commitments in irrevocable charitable trusts and gift annuity accounts totaling $22,359,635. The General Funds, Scholarships, and Chico State Funds are additional assets for which documented guidelines and procedures restrict the usage. The Total Liabilities & Assets of the University Foundation exceed $67.8 million. Total Assets 6/30/07 $67,809,742 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 Endow ments & Scholarships Trusts & Annuities Chico State/Annual Other Fund Source: Audited Financial Statement June 30, 2007 $- PLANNED GIFTS / BEQUESTS / TESTAMENTARY PROVISIONS During the fiscal year, The University Foundation received notice of four new revocable gift provisions made in wills and/or revocable trusts. With respect to such pledged commitments, we have filed new documentation showing an approximate value of approximately $1.4 million. 7

8 THE HERITAGE CIRCLE The Heritage Circle is a special group of generous individuals who have named The University Foundation, California State University, Chico as a charitable beneficiary in their will, living trust, or other type of planned gift arrangement. When one designates The University Foundation, California State University, Chico as a charitable beneficiary of their estate plans, they become a valued member of The Heritage Circle. CORNERSTONE ENDOWMENTS The Foundation s endowment is the cornerstone of supporting the future of the campus and our students. The annual funding provided through designated endowed gifts will ensure that Chico State will continually be a leader in providing excellence in education and community service. 8

9 THANK YOU It is with the deepest sense of appreciation that the Board of Governors extends heart-felt gratitude to all the individuals and corporations who have helped to make the University an outstanding institution. Private funding provides resources for the programs, students, and faculty that will keep CSU, Chico at the forefront of academic achievement, civic engagement, and community service. The generous donors who have joined with us in the vision and heritage of this campus are building a foundation of excellence that will produce dividends for future generations. Thank you for your trust and your support. Today Decides Tomorrow. Richard E. Ellison Secretary of The University Foundation Vice President for University Advancement MEMBERS OF THE BOARD OF GOVERNORS September R. Scott Chalmers, Chair Richard Matson, Vice Chair Richard E. Ellison, Secretary Dennis C. Graham, Treasurer Paul J. Zingg, President, CSU, Chico Sandra Flake, Provost Drew Calandrella, VP, Student Affairs Robert Alber John Burghardt Colleen Bartlett Mark Francis Edward Hilbert Tod Kimmelshue Robert Kittredge Daniel Noell Valene Posey James Postma

10 The University Foundation, California State University, Chico QUICK FACTS in Total Assets of over $67.8 million (Net Assets over $61.9 million) Investment Return in FY of 15.1% Over $1.5 million in Scholarship Funds awarded Total Gifts received were more than $7.1 million Over $1 million of Alumni Giving Endowment Investments over $35 million Registered as a Tax Exempt, 501(c)(3) Corporation since 1953 Board Members: 17 ( 10 members are community volunteers) The Office of the Vice President for University Advancement CSU, Chico 0156 Chico CA