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Endowment Unification

Throughout its long and rich history, Foundation Western maintained a focus on the pursuit of endowment management excellence, while at the same time embracing change as a necessary element in its evolution. In 1998, all fundraising activities were consolidated with the University, and the Foundation turned its sole focus to endowment management. By 2013, the Foundation faced a more difficult and sophisticated investment climate than at any time in its history. Combined with a changing philanthropic landscape and role of endowments, an organizational assessment was required.

After a thorough review, the Foundation’s Board concluded, in partnership with the University’s Board of Governors, that unifying endowment management best served the interests of the University and its stakeholders.

If you are an estate trustee looking to distribute a planned gift to “Foundation Western,” please contact Jane Edwards, Gift Planning Officer, at 519-661-2111 x88829 or jane.edwards@uwo.ca OR Mike O’Hagan, Gift Planning Officer, at 519-661-2111 x85595 or mike.ohagan@uwo.ca.

Your Questions Answered 

Why are Foundation Western and Western University unifying endowment management?

Managing Western’s endowment funds under one investment pool with one set of policies and procedures will eliminate ambiguity, reduce overall cost and increase investment opportunity.

How will unification affect named endowment funds?

Unification applies to endowment custody and ongoing financial management only. Each named endowment fund will remain intact including its name, terms and conditions as is currently defined. Simply put, instead of the Foundation’s Board of Directors being responsible for the governance of the endowment, Western’s Board of Governors will be.

How are Western’s investments managed?

Consistent with Foundation practice, Western’s investment approach works to preserve the long-term capital value of the endowments in order to provide a meaningful level of support for generations to come. Western’s Investment Committee manages the University’s endowed investments according to policies approved by the Board of Governors.

Asset Allocation at December 31, 2013

Western University

 Western Asset Allocation at December 31, 2013

Foundation Western

Foundation Western Asset Allocation at December 31, 2013

Who is on Western’s Investment Committee?

Western’s Investment Committee consists of members chosen for their knowledge and expertise in investment and financial management.

Western’s Investment Committee membership as of May 1, 2014

Members

  • Douglas Greaves (HBA’72), Vice-President, Pension Fund & Chief Investment Officer, Canada Post Corporation Pension Plan
  • William Hewitt, Principal, William E. Hewitt & Associates
  • Rosamond Ivey (HBA’82), Managing Partner, JRS Group
  • Jim Knowles (BA’72, BSc’74, MBA’77),* Vice President, Finance, Blackburn Radio Inc
  • Richard H. Konrad (BA’75), Managing Partner, Portfolio Manager, Value Architects Asset Management, LLC
  • Douglas Porter (BA’82, MA’84), Chief Economist, BMO Capital Markets
  • Lee Sienna (HBA’74), Vice President, Long Term Equities, Ontario Teachers’ Pension Plan
  • David Stenason (BA’78),** Managing Director, Rempart Asset Management

Ex Officio

  • Martin Belanger, Director, Investments, Western University
  • Gitta Kulczycki, Vice-President, Resources & Operations, Western University
  • Lynn Logan, Associate Vice-President, Financial Services, Western University

Administrative Resource (non-voting)

  • Irene Birrell, University Secretariat, Western University
  • Dianne Stechly-Hoover, Director, Treasury Services, Western University
*Former Foundation Western Board of Director and Investment Committee Member

**Former Foundation Western Board of Director and Finance Committee Member

What are Western’s investment returns?

The University’s and the Foundation’s investment returns have been comparable over the years. The University has greater capacity to invest in alternate asset classes and has generated incremental returns (See Fig. 1).

Annualized Investment Returns to December 31, 2013

Calendar Year Western Foundation
2004 9.30% 8.35%
2005 10.60% 9.34%
2006 12.92% 12.36%
2007 3.64% 0.84%
2008 -18.89% -15.98%
2009 16.66% 16.03%
2010 10.21% 10.26%
2011 -1.03% -2.44%
2012 11.37% 10.63%
2013 19.84% 20.51%
5 Year Annualized Return 11.17% 10.72%
10 Year Annualized Return 6.90% 6.50%
Fig. 1: Comparison of Foundation Western’s and Western’s investment returns over 10 years.

What benefit is there to combining investment pools?

Combining investment pools will improve investment opportunity and reduce cost.

What due diligence did Foundation Western perform before agreeing to unify investments?

Foundation Western’s Board of Directors hired Mercer, an independent global consulting firm, to complete a due diligence review on Western’s investment policy, managers and practices. Mercer reported that the investments under Western’s care are being managed appropriately and reported no areas of concern.

The University and the Foundation employ different spending policies. What policy will be in effect after unification?

All endowments will be administered in accordance with Western University’s Policies and Procedures, 2.11 Investment Payout Policy, which states that:

  • The allocation for spending is calculated at 4.0 per cent of the average capital balance over the most recent five-year period.
  • Endowments must be held for a full fiscal year (May 1 to April 30) before an allocation is made.

Western will continue to review endowment policies and best practices that best serve our donors.

What will happen to Foundation Western’s Income Stability Fund?

The balance in the Income Stability Fund will be distributed on a pro rata basis to all endowments at April 30, 2014 as part of the transition to Western’s policy. This allocation will appear on the income allocation line of all 2014 financial reports. After that, the stability fund model will no longer be used.

Where should future donations be directed to?

Effective May 1, 2014, donations should be made out to Western University, noting the fund name, and directed to the below address.

Western University
Advancement Operations
Westminster Hall, Suite 260
London, ON N6A 3K7

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