Investor Presentaiton
University of South Carolina Upstate Foundation and Supporting Organization
Notes to Consolidated Financial Statements
6. Endowment Funds
The Organization's endowment funds consist of eighty-four individual donor-restricted funds established for a
variety of purposes, which includes perpetual endowments. Net assets associated with endowment funds are
classified and reported based on the existence or absence of donor-imposed restrictions.
Interpretation of Relevant Law
Management has interpreted South Carolina's Uniform Prudent Management of Institutional Funds Act
("UPMIFA") as requiring the preservation of the fair value of the original gift as of the gift date of the donor-
restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the
Organization has classified as perpetual endowment (a) the original value of gifts donated to the endowment, (b)
the original value of subsequent gifts to the endowment, and (c) accumulations to the endowment made in
accordance with the direction in the applicable gift instrument at the time the accumulation is added to the fund.
The remaining portion of the donor-restricted endowment fund that is not classified in perpetuity is classified as
net assets with donor restrictions until those amounts are appropriated for expenditure by the Organization in a
manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, the
Organization considers the following factors in making a determination to appropriate or accumulate donor-
restricted endowment funds:
(1) The duration and preservation of the endowment fund;
(2) The purposes of the Organization and the donor-restricted endowment fund;
General economic conditions;
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(3)
(4)
The possible effect of inflation and deflation;
(5) The expected total return from income and the appreciation of investments;
(6) The investment policies of the Organization.
Funds with Deficiencies
From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall
below the level that the donor or UPMIFA requires the Organization to retain as a fund of perpetual duration.
There were no deficiencies of this nature that are reported in net assets without donor restrictions as of June 30,
2022 and 2021.
Return Objectives and Risk Parameters
The Organization has adopted investment and spending policies for endowment assets that attempt to provide a
predictable stream of funding to programs supported by its endowments while seeking to maintain the purchasing
power of the endowment assets. Endowment assets include those assets of donor-restricted funds that the
Organization must hold in perpetuity. Under this policy, as approved by the Board of Directors, the endowment
assets are invested in a manner that is intended to produce results that allow for growth of the corpus while
minimizing the fluctuations in the value of the portfolio to meet the payout obligations as approved by the Board of
Directors.
Strategies Employed for Achieving Objectives
To satisfy its long-term rate-of-return objectives, the Organization relies on a total return strategy in which
investment returns are achieved through both capital appreciation (realized and unrealized) and current yield
(interest and dividends). The Organization targets a diversified asset allocation that places a greater emphasis on
equity-based investments to achieve its long-term return objectives within prudent risk constraints.
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