DATE:July 18, 2014

TO:All Financial Information Users

FROM:Gary Hunt

Treasurer

RE:Endowment pool share payout (ESP) for Fiscal Year 2015

This letter is intended to provide budget planning guidance to the University community for fiscal year 2015. This letter revises the version dated February 4, 2014 to reflect a change in the fund raising fee.

The Endowment A Pool net spendable payout per share for fiscal year 2015, for all University and Foundation endowments that are invested in the endowment pool, will be $3.29, a 14% decrease from the current fiscal year net spendable payout of $3.83 per share. The decreased payout is primarily the result of the reduction in the spending policy rate from 4.75% to 4.50% and the exclusion of certain strategic assets (NDCL’s and real estate) owned by the endowment from the ESP calculation. These changes were approved by the Board of Trustees on April 23, 2013.

Net 4.50% spendable payout per share $3.29

Fund raising fee 1.28

Gross payout per share $4.57

All endowments invested in the endowment pool should budget revenue in their expendable endowment fund at a gross budgeted payout per share amount of $4.57. Individual endowment funds that pay the fund raising fee should budget $1.28 per share as a transfer for fund raising feein their expendable endowment fund. Individual endowment funds that are ineligible to be charged the fee should budget $1.28 per share as a transferto endowment principal in their expendable endowment fund.

Visit the UCFlex Financials System (SAP Transaction ZENDW_18) for endowment payout projections and market values. For assistance utilizing the transaction, contact().

Please share this information widely with the appropriate people in your department.

Attachment

cc:President’s Cabinet

Investment Committee

Endowment Operations Committee

Deans

College and Department Business Administrators

Attachment A

Endowment Spending Policy

Calculation of Fiscal Year 2015 Endowment Pool Payout

The endowment pool spending policy pays 4.5% of the 12-quarter trailing average market value of an endowment pool share. The payout is distributed monthly.

“A” Share

Fiscal Year 2013 Payout:Market Values

December, 2013 $ 77.5821

September, 2013 74.5514

June, 2013 73.1085

March, 2013 73.8884

December, 2012 72.3376

September, 2012 72.1421

June, 2012 70.7236

March, 2012 73.3434

December, 2011 69.4562

September, 2011 69.3767

June, 2011 75.7604

March, 2011 75.9554

12-Quarter Average Market Value per Share $73.1855

Net Spendable Payout per Share = $73.1271 X 4.5% $ 3.2933

Estimated Fund Raising Fee per Share = $73.1271 X 1.75%

(subject to approval) $ 1.2807

Gross Payout per Share $ 4.5740