STONY BROOK UNIVERSITY AFFILIATES Stony Brook Foundation SBF

STONY BROOK UNIVERSITY AFFILIATES Stony Brook Foundation (SBF) Stony Brook Foundation Realty (SBFR) Income Fund Reimbursable Accounts (IFR) Research Foundation (RF) Faculty Student Association (FSA) Alumni Association (AA) University Hospital Auxiliary (UHA) Long Island High Technology Incubator (LIHTI) Graduate Student Organization (GSO) Undergraduate Student Government (USG)

FOUNDATION BACKGROUND The Stony Brook Foundation is a separately governed 501(c)(3) public charitable organization. It exists to advance the mission and goals of Stony Brook University by facilitating, accepting, and managing philanthropic gifts for the benefit of the University, the University Medical Center, and the Long Island State Veterans Home. Contributions to the Foundation are accepted via cash, stock, and in-kind donations limited to fine arts provided that the donor relinquishes all control of the gift. Funds are deposited in an account based on its purpose.

OVERVIEW Types of Accounts Managed by the Foundation: • Operating Funds • Current Use • Unrestricted • Restricted Trust and Agency Endowment Annuity • • •

UNRESTRICTED Unrestricted funds are gifts and grants deposited with SBF without specific designation to a department or academic / research program. The funds deposited are available to spend are under the discretion of the Foundation Board. The Budget Committee establishes the unrestricted operating budget every year to support Advancement, Business Office and University initiatives. Unrestricted revenue comprised of: • Unrestricted Gifts • Net Investment Income • Administration Fee (10% assessed on restricted gifts excluding scholarships, fellowships and awards, 1% on market value of endowments and 10% on agency operating)

RESTRICTED Restricted funds are gifts and grants deposited with SBF for a specific designated department or academic/research program. For example: Computer Associates donates funds to support Computer Science Department. The funds deposited are available to spend. An administrative fee of 10% is assessed on the total revenue deposited each month with the exception of scholarship, fellowship and prize accounts where there is no administrative fee.

TRUST & AGENCY Agency funds are resources held by the Foundation acting as custodian or fiscal agent for an affiliated organization and University conferences and editorships. The Foundation is the fiscal agent for the following organizations affiliated with the University: Hospital Auxiliary Alumni Association Clinical Practice Management Plan - Management Fee There is an administrative fee charged for SBF services.

ENDOWMENT Endowment funds are gifts deposited with SBF based on an endowment fund agreement between the donor and the Foundation. In general, the minimum contribution of $25, 000 is required to establish new endowments. However, there are certain categories that require higher minimum gift levels. (Endowed Chair the minimum is $1, 500, 000). Refer to the Stony Brook Giving webpage for a complete list of endowment minimum gift levels. Typically, the funds deposited are permanently restricted and only the income earned can be expended, however under the new NYPMIFA legislation, principle may be invaded when an Endowment is underwater.

ENDOWMENT An annual management fee of 1% is assessed on endowment funds based on the past five year’s average market value. Since 2013, a 4. 5% spending rate based on the past five years average market value has been returned to the account holder to support the original intent of the endowment. The average inflation rate over the past 20 years has been approximately 2. 6%. All investment earnings exceeding the 4. 5% spending plan and 1% management fee are distributed to the endowment accounts to grow the fund balance (not the “original dollar value”) and mitigate inflation. The spending rate and management fee will be reviewed and approved by the Investment Committee on an annual basis.

ENDOWMENT SPENDING POLICY - NYPMIFA According to New York Prudent Management of Institutional Funds Act, ”NYPMIFA” enacted on September 17, 2010, total gifts and additions to an endowment shall constitute “original dollar value” of the fund. Stony Brook Foundation can appropriate for expenditure the principle of an endowment whose market value has dropped below the original dollar value, as long as it is deemed prudent, guided by eight prudent factors for investing. NYPMIFA deems that yearly spending of more than 7% of the endowment’s market value creates a presumption of imprudence. The endowment spending is calculated based on the prior five years FMV average at June 30 th multiplied by the approved spending rate (currently 4. 5%), with the restriction that the five year moving average not exceed 7%.

ANNUITY An annuity is funds received by the Foundation under a written deferred giving agreement between the donor and the foundation. A minimum contribution of $10, 000 is required. Annuities provide quarterly income at a fixed interest rate (based on actuarial tables) for the life of the beneficiary or beneficiaries. An administrative fee will be applicable upon termination of the agreement and the account balance is transferred to a current use or endowment account as per the agreement.

GIFTS VS. GRANTS Gifts Description Support Documentation Reporting Time Period Return of Funds Grants Contribution received by an institution for either unrestricted or restricted use in the furtherance of the institution that institution for which the institution typically comes from a corporation, has made no commitment of foundation, or other organization rather resources or services. than an individual. Letter of Donor's Intent. Grant proposal submitted by the institution. No Reporting. No Restrictions. Usually has reporting requirements or specific restrictions on how the money can be spent. None. Specified period of performance is prescribed. Not Allowed. Unexpended funds may be required to be returned at the end of the stated period. Note: Research involving human or animal subjects; DNA; radiation or radioactive materials; biologically or chemically hazardous materials and controlled substances should be managed by Research Foundation.

STONY BROOK UNIVERSITY FEE STRUCTURE SBF Admin Fee RF IDC Rate FSA Admin Fee State Unrestricted N/A 15% N/A Restricted 10% 15% N/A Scholarship/Fellowship/Awards None N/A None(1) N/A Annuity None N/A Gifts-In-Kind None N/A Agency 10% N/A 10%(2) Student Club & Honor Society N/A 10% Grants 15%-58% N/A 15%(3) Conferences N/A N/A 15% Special Event Fees 10% N/A 15% Gifts Endowment (1) (2) (3) None Endowment gifts are not charged an administration fee, however the endowment itself is charged a 1% management fee based on the 5 year moving average market value of the endowment. FSA corporate sponsorships and sports camps. Grants relating to clinical services.

GIFT AGREEMENTS & ACCOUNT APPLICATIONS Gift Agreements are used in order to document donor intentions and provide guidance on how to administer the fund and respective gifts. If uncertain, contact the AVP for Advancement before making a donor commitment. Type of Gift Agreement: • Current Use Agreement • Scholarship, Fellowship, Prize and Award Agreement • Endowment Agreement • Memorandum of Understanding (“MOU”) Current Use Agreements – are used to establish a current restricted fund for a major donation where specific intent needs to be followed or specific consideration needs to be given, i. e. naming opportunities.

GIFT AGREEMENTS & ACCOUNT APPLICATIONS Scholarship, Fellowship, Prize and Award Agreement – is used to define the eligibility criteria, selection committee composition and fund disbursement guidance. • Scholarship- IRS definition (Publication 970)– recipient is a candidate for a degree at an eligible educational institution for qualified education expenses. Disbursements are made in equal installments for the Fall and Spring semesters directly to Bursar to credit the recipient’s student account. • Fellowships – generally an amount paid for the benefit of an individual to aid in the pursuit of study or research. Disbursements are generally paid through payroll as the recipient is eligible to receive health insurance benefits. During the summer months, when the students are not eligible for health insurance, payments are made directly to the recipient through accounts payable. These amounts may be taxable to the recipient. • Prize and Awards – generally an amount paid due to merit or competition. Disbursements are paid directly to the recipient through accounts payable. These amounts may be taxable to the recipient.

GIFT AGREEMENTS & ACCOUNT APPLICATIONS Endowment Agreement – is used to document the Donor’s intentions, funding, and managing of the endowment. • Purpose – must support the University mission. • Funding – must meet minimum giving levels, and include a payment schedule. • Manage - include language that all funds which will be managed in accordance with the Stony Brook Foundation’s investment and spending rules established by the Stony Brook Foundation Board of Trustees. • Administer – include “NYPMIFA” language. MOU Agreement – is used to document an arrangement when a donor is unwilling to sign an agreement, or the donor is not available to sign the agreement (i. e. Bequests) or if there are multiple donors (usually a fundraising account).

GIFT AGREEMENTS & ACCOUNT APPLICATIONS Account Applications – internal document used to assist in managing Foundation accounts. • Long form – used when there is no gift agreement. The form requires to include the necessary approvals to establish a new Foundation account, i. e. Chair, Dean, Provost/Area VP, Foundation. • Short form – used when there is a gift agreement that contains the appropriate approval signatures on the gift agreement. This form must accompany the gift agreement when routing for signatures as the signatures on the fund agreement indicate their approval of the Account Director.

GIFT PROCESSING Gift Processing - Depositing funds into a Foundation account: • A Gift Deposit/Reporting/Acknowledgment Form must accompany each deposit in order that the proper donor and account are credited with the gift. • The original donor's letter and/or other substantiating documentation must accompany each deposit. • Checks for deposit into a Foundation account should be made payable to the “Stony Brook Foundation". In the case of any other deposits (loan repayment, event fees, reimbursement of expenses, etc. ), a Receipt Transmittal Form (instructions) must be submitted along with supporting documentation for each deposit.

PLEDGE PROCESSING Pledge Processing: Definition: A pledge is a formal commitment that is payable over several years. A pledge is recorded when the Business Office receives the signed Pledge Form or Fund Agreement. Important things to include when filling out the pledge form: • Date of pledge • Amount • Installment Schedule • Donor Intentions

GRANT PROCESSING • All Grant Proposals should be reviewed, approved, and submitted to the Corporate & Foundations Relations Department. • Complete Grant Proposal Processing Form. • Separate SBF Account for each grant. • No additional deposits to account.

DISBURSEMENTS • Funds may be spent from unrestricted, restricted and agency accounts. • The purpose of the expenditure must comply with the purpose for which the account was established and be consistent with the donor's intent when the gift or grant was accepted. • It is the responsibility of the account manager to ensure that these requirements are met. • Payments to individuals for services and honoraria should be approved by University Payroll Department. An Independent Contractor Service Form along with all required documentation (e. g. , Independent Contractor Service Agreement, NRA check list) should be submitted to Payroll. • Completed Requisitions should be forwarded to Stony Brook Foundation Business Office, 230 Administration Building, zip=1188.

FINANCIAL HIGHLIGHTS Years Ended June 30, Revenue 1994 2011 2012 2013 2014 2015 Gifts & Gifts in Kind $ 4, 086, 871 $ 23, 450, 982 $ 174, 137, 628 $ 76, 015, 553 $ 53, 815, 789 $ 51, 372, 232 Non-Gift Revenue 2, 490, 442 3, 345, 719 3, 088, 320 5, 842, 221 4, 539, 225 4, 953, 067 Investment Income 190, 245 15, 758, 832 8, 229, 690 18, 459, 583 21, 787, 019 19, 627, 102 Total Revenue $ 6, 767, 558 $ 42, 555, 533 $ 185, 455, 638 $ 100, 317, 357 $ 80, 142, 033 $ 75, 952, 402 Total Expenditures $ 6, 454, 658 $ 42, 407, 553 $ 43, 053, 667 $ 49, 524, 304 $ 86, 378, 387 $ 51, 003, 834 Total Net Assets $ 19, 836, 416 $ 190, 296, 094 $ 332, 698, 065 $ 383, 491, 118 $ 377, 254, 764 $ 402, 268, 573 Total Assets Managed by SBF $ 21, 465, 980 $ 227, 268, 701 $ 373, 847, 744 $ 432, 390, 495 $ 425, 488, 918 $ 445, 238, 021 Endowment Growth (Net Assets) $ 10, 795, 000 $ 127, 620, 459 $ 125, 375, 578 $ 154, 681, 221 $ 196, 712, 577 $ 207, 286, 228 Endowment Rate of Return 3. 68% 10. 40% 3. 20% 10. 30% 7. 88% 8. 00%

CONTACTS General Inquiries Bonnie Cakouros 2 -6536 Fund Agreements Megan Mc. Iver 2 -6044 Gift & Pledge Processing Cheryl Ciosek 2 -2109 Endowment Management John Gibbons 2 -7072 Purchasing Barbara Mahoney 2 -9129 Accounts Payable Veronica Tator-Cevallos 2 -4484 Account Applications &