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Policy on Expenditure of Gift Funds

Instructions and forms for PPM 410-5

Effective August 2018, PPM 410-5 Policy on Timely Expenditure of Endowment Payout and Expendable Gifts states that annual endowment payout should be expended within two years and expendable (current-use) gift funds must be spent within a reasonable time.

Notice for FY20-21

For Fiscal Year 2020, due to the pandemic and the extreme challenges, we did not enforce the policy.  For Fiscal Year 2021, due to the continuing issues and challenges, fund holders will not be required to submit a spending plan for non-compliant gift funds. Review of all gift funds to ensure balances are spent in a timely manner to the highest extent possible and updated spending plans in place is still highly encouraged.

After the close of Fiscal Year 2021, reminders will be sent to fund holders and business officers for all funds considered “non-compliant”. Please be aware that the policy review, requests for plans, and the actions noted in the policy for non-compliant funds will resume and will take place prior to fiscal year end 2022, in order to shore up compliance effective by that year end. For any questions related to PPM 410-5, please contact Kris Vasquez.

Endowed Funds

Accumulated payout in excess of two fiscal years (or carryforward) will be permanently added back to the principal of the fund 90 days after the start of the following fiscal year unless a carryforward request form is submitted by September 30 to the Office of Gift Policy Administration and Donor/Fund Stewardship for review. Please see Request to Approve Carryforward form.

If an approved justification is not submitted by September 30, the Vice Chancellor/Chief Financial Officer (CFO) and*/or the Chancellor’s Office will be notified of non-compliant endowed funds. If the addition of payout to principal occurs for more than three consecutive years, the Office of Gift Policy Administration and Donor/Fund Stewardship will perform a comprehensive review to assess the fund purpose.

Expendable (Current-Use) Gift Funds

Expendable gift funds with no spending within five years of receipt of a gift will be reported to the Vice Chancellor/CFO and*/or the Chancellor’s Office unless a spending plan is submitted by September 30 to the Office of Gift Policy Administration and Donor/Fund Stewardship for review.

*In conformance with endowed chair guidelines, all endowed chairs with accumulated payout in excess of two years will be reviewed by the Chancellor.

Communication Timeline

April/May

Office of Gift Policy Administration and Donor/Fund Stewardship notifies fund holders and business officers of non-compliant funds as of March 31 financial data. Comprehensive financial fund information is included within the notification. Fund holders and business officers should review funds and consider an appropriate spending plan.

August

Office of Gift Policy Administration and Donor/Fund Stewardship notifies fund holders and business officers of non-compliant funds as of final June 30 financial data. Comprehensive financial fund information is included within the notification. Fund holders and business officers should consider which funds require a carryforward balance and/or spending plan.

September 30

Carryforward requests and expendable (current-use) spending plans are DUE. (If a request form is not submitted for endowments with accumulated payout balances in excess of 2 years, income will be added back automatically after 90 days following the start of the fiscal year.)

Forms and Instructions

Endowed Funds

Please submit completed forms to the Office of Gift Policy Administration and Donor/Fund Stewardship via fundstewardship@ucsd.edu.

Expendable (Current-Use) Gift Funds

Please submit completed forms to the Office of Gift Policy Administration and Donor/Fund Stewardship via fundstewardship@ucsd.edu.

FAQs

What happens if a form is not submitted by the September 30 deadline?

  • For endowments, accumulated payout in excess of two years will be automatically added back to principal.
  • For expendable (current-use) funds, a list of non-compliant funds will be sent to the VC-CFO office for review.

How can I access gift fund information?

  • Gift fund information is available through the STAR Dashboard; STAR training available via UC Learning.
  • The Office of Gift Policy Administration and Donor/Fund Stewardship distributes comprehensive quarterly gift fund reports to development officers and business officers. If you would like to be added to this distribution list, please specify the department you are overseeing and email fundstewardship@ucsd.edu.

Do endowed chairs apply to this PPM?

  • Yes, please see Section D of the policy statement: In conformance with endowed chair guidelines (issued January 1, 2015), for all endowed chairs with Accumulated Payout balances in excess of two years, whether the chair is vacant or filled, a Dean must submit a justification and plan if the Division desires permission for payout accumulation beyond two years. 

Contacts and Additional Resources

For information on who to contact regarding gift funds, please consult the Advancement Services Staff Directory.

STAR Reporting Dashboard

Guide to endowments for fund holders/administrators

Endowed Chairs

Gift Allocations, Journal Vouchers, and Expense Transfers

  • Revenue should only be recorded to a gift fund by Foundation Accounting, Gift Processing, or General Accounting personnel. 
  • Budget transfers between different funds are prohibited on gift funds.
  • Expense transfers are allowable according to the intent of the fund and ensure proper account code is used through the following methods:
    • EPET (Electronic Payroll Expense Transfer)
    • ENPET (Electronic Non-Payroll Expense Transfer)
    • STIP transfers must be done by General Accounting to ensure proper account code.
    • How to handle deficit balances (PDF)
    • If the methods above are unable to be used: Financial Journal Voucher 
  • Expendable (current-use) gift funds should be inactivated and closed once the balance is zero. Submit a ServiceNow case to inactivate the fund.
See the Stewardship Team Member Guide (PDF) for team members' key responsibilities and contacts for frequently asked questions. Please email us with any questions regarding Donor and Fund Stewardship.