Accounting Services Section (ACT)

Policy 32

Effective Date: 03/01/2002

Last Modified Date: 01/04/2006

Distributions of endowment income are made annually and are credited to income accounts designated to support academic needs such as professorships, scholarships, and fellowships. Departments may elect to use the income when distributed, invest it in the Temporary Pool, or invest all or a portion of the income with The University of North Carolina at Chapel Hill Foundation Investment Fund, Inc. (Investment Fund) for withdrawal and use at a later time. This use must, of course, be consistent with any donor-imposed restrictions.

Reinvested income may be withdrawn at the end of any quarter without any additional action by either the Board of Trustees of the Endowment or the Board of Directors of the Foundation. Reinvested income, however, may not be withdrawn if the income was reinvested based on donor conditions intended to maintain a required level of endowed principal, or to meet other requirements of the endowed gift.

The availability of the Investment Fund should assist in the prevention of the accumulation of unspent income in the income accounts by providing an additional investment choice. Under the new investment alternative, the income to be invested in the Investment Fund will purchase units that will be separately identified from principal in the Investment Fund. Distributions with respect to these units will occur annually and will be credited to the existing income account.

Additional Information

Questions regarding the application of this policy should be addressed to John Carlson, Investment Manager at 962-0036.

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