Dear University Community,

To maintain long-term financial sustainability and enhance the administration of SFU’s endowment funds, we are proposing changes to the university's Endowment Management Policy (GP20). The policy was first established in 1991 and the proposed changes aim to align with current industry endowment guidelines and ensure intergenerational equity and sustainability of these funds.

Endowments are funded by donations, with donors specifying the intended use of these funds. The use for these funds can range from research, scholarships and bursaries to teaching and learning, athletics, and community engagement. 

Proposed policy changes:

• To safeguard against high inflation periods, the annual inflation adjustment will be capped at 3%*. This ensures the stability of funds and protects intergenerational equity.
• SFU will be able to collect an annual endowment management fee of up to 0.2%* on the endowment principal amount. This practice aligns with industry endowment guidelines and will cover costs related to the management of endowments without using operating dollars needed for annual university priorities.
  
• The 15% cap on the stabilization reserve will be removed to allow for greater flexibility in managing the reserve, which will help to maximize and invest donor dollars in years with greater spend amounts, rather than transferring it back to the endowment principal amount where the funds can appear as surplus. 
• Funds from endowment spend accounts will be recapitalized back into the endowment principal account only with approval from the Provost and Chief Budget Officer or their designate to ensure that funds are used with long-term financial sustainability in mind.  
• Endowment funds will be reviewed after 25 years to ensure the funds are being utilized effectively and to maximize their benefits for the advancement of the University. If it is the University’s opinion that the funds could be optimized through change in use, the Board of Governors may permit such changes, keeping in mind the original intent and spirit of the gift.  

*The rates will be reviewed at least every three years and approved by the Board of Governors.

These adjustments are necessary to ensure our endowment funds continue to be managed effectively within a changing economic landscape and to enhance the sustainability of our financial resources to support operational and strategic priorities.

Draft of GP20 Policy included here (PDF)

Draft of GP20 Appendix A included here (PDF)

We invite you to review the proposed policy amendments. Please submit your feedback to shawn_li@sfu.ca by August 9, 2024.