Annual Endowment Disbursement Policy

This policy outlines the requirements for the disbursement of the Cambrian College donor endowment.

This policy applies to the Endowment held by the College.

Donor: A person or entity making a gift to the College.

Endowment: A structure for managing, and in many cases indefinitely perpetuating, a pool of financial, real estate, or other investments for a specific purpose according to the will of its founders and donors.

Rate Stabilization Fund: A monetary reserve established to maintain the disbursement rates of the endowment.

1. The Endowment held by Cambrian College is used to fund a significant portion of the Cambrian College Awards Program on a yearly basis.
2. Only the investment income that is earned from the endowment is used for award disbursements.
3. Cambrian College uses a “slip-year” funding model. This sees the investment earned from the endowment in one fiscal year disbursed in the next fiscal year.
4. The target rate of return for endowment disbursements is 4%.
5. When the endowment performs at a rate of return above 4%, investment income will be allocated as follows:
   1. A rate equal to inflation will be set aside in an inflation rate stabilization fund.
   2. A maximum of 4% to be used to pay for yearly scholarships, bursaries, and awards.
   3. Any further investment earnings will be designated to a Rate Stabilization Fund.
   4. The example below will demonstrate the above:
      1. Assuming an investment return of 8% and an inflation rate of 2% on an endowment balance of $3,600,000, the following distribution would apply:
         

         Investment return	8.00%	$288,000
         1. For Inflation Rate Stabilization	2.00%	$72,000
         2. For Yearly Scholarships	4.00%	$144,000
         3. For Rate Stabilization Fund	2.00%	$72,000

6. When the endowment performs at a rate of return below 4%, the following scenarios would apply:
   1. The Rate Stabilization Fund would be used to ensure an award disbursement of 4% of the endowment balance.
   2. Costs of maintaining the Cambrian College awards program at a minimum standard will be shared through the combined efforts of Cambrian College and the endowment donors.
   3. Cambrian College may opt to reduce the 4% disbursement until such time as the endowment is performing to expected standards.
   4. These numbers may change in time and remain at the discretion of Cambrian College.

Executive Director, Alumni, Development and Office of the President is responsible for:

• Ensuring overall compliance of this policy.
• Ensuring the development, review, and availability of this policy.

Alumni and Development Office is responsible for:

• The application and administration of this policy.

None