Quasi-Endowment Fund Policy

Definitions

Quasi-Endowment Fund: Funds that function as endowments but the principal of which is not restricted in perpetuity by donors.

Endowment Investment Portfolio (“EIP”): The investment portfolio managed by WFAA in which all endowed funds, including quasi-endowments, are pooled and invested.

Spend Plan Allocation (“SPA”): A fixed percentage of a fund’s multi-year rolling average market value, approved annually by WFAA’s Board of Directors, and made available for spending.

Institutional Advancement Fee (“IAF”): A fee assessed by WFAA to support advancement operations, based on the prior quarter’s market value of the fund, as set by WFAA’s Board of Directors.

Excess Withdrawal: A withdrawal that requires liquidation of invested assets (invested assets include both principal and cumulative fund balance), rather than being paid from the fund’s available cash balance. Excess withdrawals are also referred to as “Checks from Endowment” and related journal entries are labeled as such. Excess withdrawals are processed through quarter-end liquidation. Fund liquidations are also included in excess withdrawals.

Net Excess Withdrawals: Excess withdrawals, less endowed gifts received, within the same quarterly measurement period.

Operations

Quasi-endowments provide a vehicle for funds to be invested in the EIP, allowing for economies of scale in investing. A quasi-endowment should be long-term in nature, though the original corpus and accumulated investment earnings may be withdrawn in the future, subject to this policy.

Returns, Spend Plan Allocation, Fees & Expenses

Each fund is credited with its proportionate share of net return (after investment expenses) on a quarterly basis. The SPA and IAF are also applied quarterly to each fund.

Market Risk

As with all funds invested in the EIP, this investment vehicle does not have a guaranteed rate of return, and participants expose their investments to market losses, as well as gains. All market risks associated with quasi-endowments are assumed within the college, department, or unit.

Additions

Additions to quasi-endowment funds are invested in the EIP at the end of the quarter in which they are received.

Distributions

The quasi-endowment must retain the purpose and intent as specified by the donor or source of the original funds, and distributions (SPA or excess withdrawals) may be expended only for those purposes.

Reinvestment

Spend Plan Allocation may be reinvested into the quasi-endowment fund in accordance with the Reinvesting Income for Endowed Funds Policy.

Types of Quasi-Endowments and Source of Funding

Donor Designated Quasi-Endowment

Established by living donors with a Memorandum of Agreement (“MOA”) or occasionally via trusts or estates with directions in the accompanying legal documents requesting a quasi-endowment or using equivalent language indicating the entire amount of principal is ultimately available to be spent. (If any amount of the principal is required to be maintained in perpetuity, this situation would result in the creation of a permanent endowment with special instructions, not a quasi-endowment.)

A Donor Designated Quasi-Endowment may not be established with a Multi-Donor Memorandum of Agreement (“MDMOA”) without advance approval from the Director of Fund Accounting, Administration and Compliance and the Senior Legal Counsel, in consultation with the Controller and CLO.

Board Designated Quasi-Endowment

Established with unrestricted gifts to WFAA through a resolution of WFAA’s Board of Directors. A board designated quasi-endowment may also be established with excess operating surplus from WFAA’s general operations.

Campus Designated Quasi-Endowment

Established with an accounting transfer from a discretionary fund (i.e., annual fund) and documented with a Fund Operating Agreement (“FOA”). Donor notification in this scenario is not required. These funds cannot accept gifts.

Other Quasi-Endowments

Undesignated Gifts

Undesignated gifts will follow the Undesignated Gift Policy, which may result in the gift being quasi-endowed.

Donor-Restricted Gifts

WFAA may establish a quasi-endowment fund with a donor-restricted gift if the following conditions apply:

Condition 1

The gift does not include explicit instructions (or equivalent language) stating the funds must remain immediately available for spending or that the funds may not be endowed.

Condition 2

The gift amount exceeds what can reasonably be spent for the stated purpose within a practical timeframe after reasonable effort has been made to reach the donor, and in the event that a donor cannot be reached (or is deceased).

Any donor-imposed restrictions remain binding and may not be altered by the Board of Directors.

In the case of an estate or trust gift, these funds will be subject to the lock-up period unless challenged by the estate or trust.

If the Board of Directors chooses to invade the principal of such funds or convert the fund to fully expendable status, a separate Board resolution must be documented and approved.

Policy Provisions

Lock-up Period

The invested portion of a quasi-endowment fund, both principal and cumulative fund balance, may not be invaded for a period of 5 years from the date the fund was invested in the EIP. Any funds invested in the EIP prior to 07/01/2026 typically shall not be subject to the lock-up period; however, it is encouraged to give as much notice as possible when requesting excess withdrawals from these funds—typically, a notice period of at least 60 days.

Exceptions to the 5-year lock-up period must be approved by the Controller, in consultation with the Chief Financial Officer.

WFAA Fund Minimums

Donor Designated Quasi-Endowment: Higher of the WFAA minimum endowed fund level or the applicable school/college/unit minimum

Campus Designated Quasi-Endowment: $1,000,000

Board Designated Quasi-Endowment: WFAA minimum endowed fund level

Other Quasi-Endowment: WFAA minimum endowed fund level

Excess Withdrawal Caps

Per Fund Cap

Individuals with spending authority may request excess withdrawals, subject to the following limitations. The withdrawal may not exceed the lesser of:

• 80% of the fund’s current market value; or
• The amount that would reduce the fund’s market value to the minimum endowed fund level in effect at the time of withdrawal.

Excess withdrawals that would reduce the fund’s market value below the minimum endowed fund level will only be approved if the fund is intended to be liquidated and closed. Exceptions may be approved by the Director of Fund Accounting, Administration and Compliance in consultation with the Controller.

EIP Aggregate Cap

The aggregate total of net excess withdrawals (inclusive of fund liquidations and less endowed gifts received in the applicable quarter) from all endowed funds invested in the EIP in a single quarter shall not exceed 0.5% of the prior quarter’s total EIP Market Value.

If aggregate withdrawal requests exceed this limit, the full amount of all requests may not be disbursed in the quarter requested. The amount and timing of disbursements will be at the discretion of the CFO and CIO, and best efforts will be made to honor the requests as timely as possible.

Any funds invested in the EIP prior to the effective date of this policy shall also be subject to the aggregate excess withdrawal limit.

Fund Liquidations and Fund Closure

Fund liquidation requests will be granted as requested, provided all criteria are met related to the lock-up provision and excess withdrawals provision. The balance of the fund is typically disbursed with two disbursements as described below.

Initial Disbursement:

The initial disbursement is typically paid following processing of the request and is not dependent on quarter-end timing. The initial disbursement will include:

• 100% of the fund’s expendable cash balance
• 80% of the fund’s endowment market value

Final Disbursement:

The final disbursement of the remaining balance is typically paid by the 50^th day after quarter end once the quarterly endowment close process is complete and the fund’s final value is confirmed. The final disbursement will be paid in accordance with the same instructions as the initial disbursement unless otherwise directed.

Conversions

Certain callable funds may be converted to quasi-endowed funds if the applicable minimum threshold (highest of WFAA minimum or school/college/unit minimum) is met and proper donor consent or notification is obtained and documented. For callable funds established with a Memorandum of Agreement (“MOA”), donor consent is required; if the donor is deceased, the fund may not be converted unless otherwise stipulated in the gift instrument. For callable funds established with a Fund Operating Agreement (“FOA”) containing donor dollars, donor notification is required. The conversion and process for donor notification will be approved by Director of Fund Accounting, Administration and Compliance and Senior Legal Counsel in consultation with Controller and Chief Legal Officer on a case-by-case basis. Converted funds are subject to all provisions of this policy.

Appendix

Approvals Summary

Action	Approver	In consultation with:
Donor designated quasi-endowment: Exception to document with an MDMOA	Director of Fund Accounting, Administration and Compliance; Senior Legal Counsel	Controller; CLO
Lock-up exception	Controller	CFO
Excess withdrawal exception (per fund) – remaining value of fund below fund minimum	Director of Fund Accounting, Administration and Compliance	Controller
EIP aggregate excess withdrawal – timing/amount if greater than EIP aggregate threshold	CFO; CIO (approvals facilitated by Controller)	N/A
Callable fund conversion and donor consent/notification process	Director of Fund Accounting, Administration and Compliance; Senior Legal Counsel	Controller; CLO
Changes to Board Designated Quasi-Endowments	Board of Directors	N/A

Questions?

Please see the Frequently Asked Questions page.

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Policy Owner: Finance
Applies to: All staff
Approved by: Chief Financial Officer (CFO), Chief Legal Officer (CLO), Chief Investment Officer (CIO), Senior VP’s of Development, Chief Executive Officer (CEO)
Effective Date: 7/1/2026
Contact: Matt Cotty, Director of Fund Accounting, Administration and Compliance