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| Re: Quasi Endowment - more information needed
Posted by Tony Poderis   on 1/5/2008, 1:43 pm, in reply to "Re: Quasi Endowment - more information needed"
VIP Poster
Aurelia: This is for your information, and perhaps for a few others who may now be uncertain about how they use endowment funds or plan to use them.
First though, the term, quasi-endowment, does not fit in the instance cited here originally. And that is what has set up the confusion.
The donor bequeathed money to the organization expressly for endowment purposes. There is nothing quasi about it.
It’s when an organization itself, not the donor, enters money into an endowment fund that it becomes a “sort of” endowment---and that’s where the quasi term was born---in Academia, where quite often simple becomes sophisticated. But, it’s still an endowment---it functions as an endowment---and is subject to the rules and regulations as set up by the board of trustees. Such funds (the corpus) can be spent at the pleasure of the board of trustees, but as well, so can funds (the corpus) often be spent even when given by a donor.
At the Cleveland Orchestra, from time to time, we were able to shift some cash reserves into endowment. Often, we received bequests with no stipulation to how the money was to be used. Since our endowment use guidelines were the same whether we did the entering of such funds from those unrestricted reserves and sources, or they were designated by the donor, all we needed to do was to keep in mind and observe any restrictions or designated use of funds given directly by donors for endowment. There was no need to call the funds anything but endowment funds.
As well, more often than not, even donor-designated endowment funds were not given with the prohibition that we could not spend the corpus, so those funds were exactly the same as money we, ourselves, entered into endowment.
So, to me, the term quasi is just a name which means only the practice of entering funds for endowment, and it should not be somehow considered that the use of the funds is different---as I pointed out from the examples above. That’s why I have been persistent in declaring that the money given here as stated in the original posing is in no way quasi in first place.
In my opinion, and from experience, the Addendum to my article---which I posted the other day---was all the policy we needed over my twenty years at TCO, with only the need to be aware of funds which were expressly prohibited from being invaded. From my recollection, such funds represented an almost negligible percent of our total endowment fund. Our policy, therefore, applied as well to endowment funds we “contributed,” or money given to endowment directly from donors.
So as to hopefully clarify what has been made complicated, do take the time to read that Addendum of my article:
--- Endowment Funds Go On Forever --- An Endowment Campaign Should Not
http://www.raise-funds.com/1099forum.html
(See the Addendum: “Making Your Endowment Funds Work”)
For those of you interested, be assured that the suggested, generic, all-encompassing policy, works for any endowment funds, be they transferred so internally, or come directly from a donor.
There is no need to be distracted nor distressed with any quasi label of endowment funds, as again, that only (seemingly only in Academia) refers to the source of the funds, and not the use.
To repeat, many times our Orchestra transferred to our endowment fund, unrestricted money from other sources than endowment designated. It was totally unnecessary to refer to that good money as being something sort of (quasi). It was very real endowment money. To me, it's just an unnecessary name for the process of entering the money.
Let us know if your attorney tells you anything different.
Tony Poderis
http://www.raise-funds.com
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