Spending

To ensure the prudent administration of trust and endowment funds and to provide guidelines for the calculation and distribution of the annual amount available for spending those funds. The Policy will be applied to all endowed (internally and externally restricted) funds except as provided in individual trust agreements. 

Under this policy, the University of Saskatchewan (USask) sets a spending rate which is expendable regardless of the actual income or appreciation experienced within a fiscal year. The purpose of this policy is:

• To provide stable annual expendable funding to support the purpose of USask.
• To protect the value of endowed contributions in terms of purchasing power.

USask manages trust and endowment funds to ensure annual income is adequate to support the projects and programs in accordance with the donor's or funds direction or intent.

USask is committed to protecting and preserving the original contribution of endowed funds and ensuring that the funds provide an appropriate level of funding for current and future generations.

This policy is based on the 'prudent person approach' to ensure prudent investment and administration.

• USask uses the banded inflation method for allocating spendable endowment income. The amount available for spending (spending allocation) is set at 4.75% of the original and subsequent contributions and non-expendable interest allocations for capital preservation of future purchasing power. The allocation is increased annually by a factor equal to the annual rate of inflation as measured by CPI (Canada, all products).

• The spending allocation will be monitored to ensure that the amount distributed is reasonable in relation to the current and projected market returns and in relation to the market value of the endowment. 

• The amount available for spending will not be allocated for two complete fiscal years after the donation year or until an amount equal to ten per cent of the contribution has accrued through earnings, whichever occurs first. Investment income in excess of the approved spending rate will be retained as segregated capital.

• The spending rate will be adjusted if current and projected long-term market returns fail to provide sufficient capital preservation. This adjustment is to ensure consistent spending during periods of extreme market volatility.

• Funds are invested according to the University's Endowment Investment Policy unless otherwise restricted by the donor or the Board of Governors.

Responsibility for the investment of trust and endowment funds is outlined in the University Investment Policies.

The University of Saskatchewan expects that its faculty, staff, students, post-doctoral students, visitors, contractors and agents will comply with this policy. Should there be reason to suspect that laws or university policies have been or are being violated, and the university may suffer reputational, financial or other harm as a result of non-compliance, this may constitute grounds for disciplinary or legal action in accordance with any applicable agreements, contracts, collective agreements, regulations or policies, legislation or common law principles.

The source of institutional approved definitions is in the Academic and Curricular Nomenclature.

• Academic and Curricular Nomenclature 
• Investment Policy