ADMINISTRATIVE POLICY

University Endowed Chairs, Professorships and Faculty Fellowships
Responsible University Officer: Executive Vice President for Academic Affairs and Provost
Policy Owner: Executive Vice President for Academic Affairs and Provost
Policy Contact: Jill Merriam

POLICY STATEMENT

Gifts are accepted by the University of Minnesota for the purpose of creating endowed chair, professorship, or faculty fellowship positions. These positions may be permanently endowed; or established as a 10 year term position if the annual support is equal to 1/10 of the total needed for appropriate endowment level. The Board of Regents approves the minimum levels of endowments. University faculty may be eligible to hold one of these positions to enhance their contribution to teaching, research and public service. Units must coordinate all donor proposals, negotiations, and contracts with the University of Minnesota Foundation to ensure that there is no conflict with other donor/proposal contracts and that all parties agree how the donation is to be applied.

Endowed chairs, professorships, and faculty fellowship positions typically carry the name of the donor; a person or institution designated by the donor; or a person in whose name the University seeks funds to endow the position. Terms such as University, distinguished or the title Regents Professor are conferred only by the Board of Regents.

The Senior Vice President for Academic Affairs and Provost, chancellor, Vice President for Health Sciences or dean determines the appointment and length of term for each position based on the memorandum of agreement with the donor. The responsible University administrator  ensures that the endowment funds are expended in accordance with the terms of the endowment and provides periodic activity reports to the donor.

Search and selection procedures for appointing faculty members to named chairs, professorships, or faculty fellowships are determined by the unit.

Income from an endowed chair, professorship, or faculty fellowship position is used to support a full-time faculty member or visiting faculty member as specified by the conditions of the gift. In situations where sufficient funding is available, more than one position may be supported from the endowment. Reasonable expenses associated with searching for chairs, professorships, or faculty fellowship positions may be charged to the endowment when the position is vacant.

The Senior Vice President for Academic Affairs and Provost must grant approval for expenses not specified by the conditions of the gift, in advance of the expense.

The donor and the Foundation must approve any material changes to the original endowment.

Units with PUF chairs or professorships must follow the spending requirements outlined in MN State Statute 137.022 (https://www.revisor.mn.gov/statutes/?id=137.022)

REASON FOR POLICYRETURN TO TOP

To maintain the highest standards of stewardship and fiduciary responsibility for endowed chairs, professorships, and faculty fellowships in order to support the work and increase the effectiveness of the scholar.

SubjectContactPhoneFax/Email
Primary Contact(s) Jill Merriam 612-625-2515 jmerriam@umn.edu
GIFT Portion U of M Foundation 612-624-3333
PUF Match Endowment Account and Target Account Setup Accounting Services 612-626-7746

DEFINITIONSRETURN TO TOP

Chair
Chair positions require a minimum of $2,000,000 in permanent endowment or a minimum of $200,000 per yar of expendable funds if made available for at least ten years. The combination of recurring funding from the unit and chair endowment payout/income distribution must be sufficient to provide salary and fringe benefits for the recipient, staff support, travel and other expenses.
Professorship
Professorship positions require a minimum of $1,000,000 in permanent endowment or a minimum of $100,000 per year of expendable funds if made available for at least ten years. The combination of recurring funding from the unit and endowment payout/income distribution must be sufficient to provide salary and fringe benefits for the recipient, staff support, travel and other expenses.
Faculty Fellowship
Faculty fellows require a minimum of $500,000 in permanent endowment or a minimum of $50,000 per year of expendable funds if made available for at least ten years. Generally, these funds are used to supplement a faculty member's salary, to provide stipends and support for fellowships, or to cover expenses incurred in a lecture series.
Position
A Chair, Professorship, or Faculty Fellowship position which has been created in order to support and enhance the scholar’s contribution to teaching, research and public service.
Perpetuity
An annuity that last forever or for an indefinite period.
Consolidated Endowment Fund (CEF)
The fund represents the pooling of individual endowment funds from both public and private sources. Essentially permanent fund endowments have the longest investment timelines. Funds should be invested in CEF when principal appreciation is the main goal and dollars will not be expended for at least three years. The accounting for CEF is done on a per-share market value basis. The share value is adjusted monthly as the overall value of CEF assets change due to market fluctuations.
Full-Time Faculty
A regular appointment that is two-thirds time or more over the academic year.
Permanent University Fund (PUF)
PUF is a public endowment derived from sources such as state iron ore taxes, royalties, and federal land grants. By legislative mandate, PUF assets are used to match private contributions with the goal of providing substantial financial support for endowed chairs and professorships throughout the University. All PUF endowments are True endowments and as such the original principal may not be spent. These endowments are invested in Consolidated Endowment Fund (CEF) and subject to the same policies.
Responsible University Administrator
The person (Provost, Chancellor, Dean, Department Head, etc.) who has been designated to develop a plan for filling endowed chairs, professorships and faculty fellows.

RESPONSIBILITIESRETURN TO TOP

Board of Regents:
Regents are responsible for establishing the minimum level required to support each of the three academic positions.
Chairholder (Professorship or other named title)
Assure that expenditures are in accordance with the terms of the endowment and University policies. With the Responsible University Administrator, prepare periodic reports to the donor(s).
Chairholder's Dean or Department Head
Correspond with donor on status of endowment. Develop a plan to fill department chairs. Assure that expenditures are in accordance with the terms of the endowment and University policies. Handle transfer of available dollars for endowment expenditures from the Foundation and plan annual budgets, unless this activity is performed by the Dean's office.
System Campus, College or Unit
Responsible for keeping list of all chairs, professorships, and faculty fellowships including current holders and making it available to administration upon request. Responsible for reporting activities to the donor.
System Campus or Collegiate Development Officer
Coordinate fund raising efforts with recognized foundations.
Donor
Honor pledges made to the University.
Office of Investments and Banking
Determine investment strategy, monitor asset allocations to ensure compliance with Board of Regents policies, and evaluate investment performance. Recommend and monitor external investment advisers. Implement Board of Regents policy.
Recognized Foundations (UMF, Arboretum, 4-H)
Establish the gift endowment account for the department. Advise departments on donor relations. Request Accounting Services to match gifts with PUF money and notify them of departmental budgeting plans. Provide information on gift status. Prepare overall reports on chairs.
Responsible University Administrator (Provost, Chancellor, Dean or Department Head)
Recommend scholar for chair, professorship or faculty fellowship. Ensure that a plan has been developed for filling interdisciplinary chairs. Develop a plan to fill PUF Endowed chairs. Get approval for the plan by an appropriate University official. Assign responsibility to a person who will handle transfer of available dollars for endowment expenditures from the Foundation and plan annual budgets. Must ensure the endowment funds are expended in accordance with the terms of the endowment and provide periodic reports to the donors on the status of the chair and nature of the activities.
Accounting Services
Verify that deposits, withdrawals and distributions are consistent with University policies, procedures, and donor intent, and verify that necessary documentation and approvals exist. Approve all CEF endowment transactions in the financial system. Maintain CEF endowment. Initiate quarterly income distribution.

RELATED INFORMATIONRETURN TO TOP

Amended:
February 2016 - Comprehensive Review. Minor Revision. The changes clarifies the coordination requirement of units with the University of Minnesota Foundation. General clean-up of the language and streamlining of the procedures.
Amended:
April 2011 - Major Revision, comprehensive review:
  1. Expands the current policy to address professorships and faculty fellowships.
  2. Includes operational aspects of the process that were previously in Board of Regents Policy: Awards, Honors and Recognition.
  3. Clarifies roles and responsibilities for administering roles.
  4. Title changed from Administering University Endowed Chairs to University Endowed Chairs, Professorships and Faculty Fellowships.
  5. Procedures that duplicated procedures for Administrative Policy: Selecting Investment Options for University Funds were eliminated.
Amended:
June 2008 - Policy completely revised to address the Enterprise Financial System rollout. Establishing Permanent University Fund Endowments and Calculating and Planning the Distribution of Endowment Income procedures were also revised. Managing and Reporting Endowment Activity procedure was removed as it was under development.
Amended:
October 2005 - Updated CEF Rates in Rates Section. Procedures referencing this rate updated to link to this information in the rates section of this policy. TIP rate deleted from Rates section since currently there is no TIP rate.
Effective:
September 1995
Supercedes:
President Hasselmo Memo - February 9, 1993 - Management of the Permanent University Fund.
Document Feedback
Date Revised
February 2016
Date Effective
September 1995