A Fund Agreement is created to document the donor(s) gift intent when the donor wishes to restrict the gift, and a current fund does not exist for this purpose.  The gifts that cannot be deposited into an existing fund of The Arch Foundation for the University of Georgia, Inc. are generally used to establish a new fund if certain requirements are met.  The fund-raisers, or Development Officers, at the University of Georgia will determine this through their work with the donor(s) and/or donor representative(s) at the time the gift is made.  The Financial Services Office acts as the facilitator in this process to answer questions and prepare the fund agreements for approval. 

PROCEDURE

1) The Development Officer should work with the donor(s) or donor representative(s) to develop a purpose statement and criteria.  The amount of the gift and the purpose of the gift will determine the type of agreement to use (see the Fund Agreement Criteria for the type of agreement).  The Financial Services Office is available to assist with this determination.

2) The information should be forwarded from the Development Officer to the Financial Services Office. The Development Officer may use a sample agreement or provide information in writing via email or written copy for the Financial Services Office to complete a draft agreement for the donor/donor representative to review.  Sample agreements are on the Web at www.uga.edu/prospect/formbook, or may be obtained by calling the Financial Services Office. TOP

3) Each fund will require the following:

a) name of the fund

b) donor or the donor representative's complete name

c) school/college that it benefits

d) purpose of the fund

e) biographical information on donor or fund honoree, if desired for named fund

4) Some funds will require more information:

Scholarships

a) selection criteria

b) selection committee

Chair/Professorship

a) selection criteria

5) The Financial Services Office will prepare a draft and return it to the Development Officer within three business days of receipt of all the required information. TOP

6) The Financial Services Office will share the draft with the appropriate University offices, if needed, for their comments before returning it to the Development Officer. 

7) The Development Officer will share the draft with the donor(s)/donor representative(s) and the respective Dean/Vice President. TOP

8) The Development Officer should return the draft with revisions marked to the Financial Services Office or indicate his or her approval of the draft.  The Financial Services Office will incorporate the recommended changes/corrections and complete a redrafted or final fund agreement. 

9) The final fund agreement will be forwarded to the Development Officer so that the donor/donor representative and Dean/Vice President signatures may be obtained.  Two final originals will be prepared unless otherwise instructed. TOP

10)  After the signatures are obtained from the donor/donor representative and Dean/Vice President, the Development Officer will forward the signed fund agreement to the Financial Services Office.

11) The Financial Services Office will obtain the remaining signatures. 

12) After the fund agreement has been returned to the Financial Services Office with all signatures in place, the Financial Services Office will maintain one original for their files, and the second original will be forwarded to the Development Officer for the donor/donor representative.  If additional originals were requested, they will be forwarded at that time. TOP

FUND AGREEMENT CRITERIA

1) ENDOWED FUNDS

An endowed gift is one in which the original principal is never invaded and the gift exists in perpetuity.  Endowments are generally funded within five years of the initial contribution.  Income is distributed annually pursuant to policies adopted by The Arch Foundation for the University of Georgia, Inc. TOP

The type of endowment determines the type of fund agreement required. Please see the next section "Endowment Levels" for the various kinds of endowed funds and the minimum funding required to establish each one. There are generally four endowed fund agreement formats. They are:

a) Endowed - This agreement is used when the initial gifts are sufficient to meet the minimum endowment balances.  This type of fund is subject to administrative fees, investment fees, and earnings from both short-term and long-term investments. 

b) Time-Period Specification - This agreement is used when the total gifts will be received over a time-period.  This time-period is generally three to five years.  The time-period is indicated in the fund agreement and expenditures from the fund are prohibited until the minimum funding has been reached. TOP 

c) Chairs / Professorships - All chairs and professorships are generally created as an endowment.  Language that satisfies the University of Georgia and Board of Regent requirements for hiring professors to a named chair or professorship position is included in the agreements.

d) Declaration of Trust - This agreement is used when the gifts are received through a deferred mechanism.  The donor(s) is deceased and the gift(s) has been received through a deferred gift or from the estate.  A planned gift agreement or will is usually the source for drafting this type of agreement (a declaration of trust may also be a non-endowed agreement). TOP

2) NON-ENDOWED FUNDS

A non-endowed gift allows for both the gift as well as any investment earnings to be spent to support the trust purpose.  There are three types of formats for non-endowed fund agreements.  They are: 

a) In and Out - This agreement is created when gifts are received annually, spent annually, and a minimum balance of $5,000 cannot be maintained.  This type fund generates no investment earnings and is not assessed any administrative or investment fees.  TOP

b) Declaration of Trust - This agreement is used when the gifts are received through a deferred mechanism.  The donor(s) is deceased and the gift(s) has been received through a deferred gift or from the estate.  This fund follows the same criteria as the endowed declaration of trust, except that the donor's intent is for the entire gift to be expended for the purpose indicated by the gift transmittal, a deferred gift arrangement, a planned gift agreement, a will, or any other document which transfers the estate gift to Arch. TOP

3) AMENDMENT

An amendment is required when the donor/donor representative requests a change to the original purpose of the fund; and the requested change does not change the type of fund; i.e., non-endowed to endowed.  These requests must be in writing and approved by the appropriate Dean/Vice President.  TOP

Types of requests that require a new agreement, not an amendment are:

a) change from non-endowed (in and out) to non-endowed interest-bearing fund, or

b) change from non-endowed to an endowed fund. 

The Development officers, the fund-raisers, work with the donor(s) and/or donor representative(s) to prepare a fund at the time the gift(s) is made.  The Financial Services Office should act as facilitator in this process to answer questions and prepare the fund agreements for approval. TOP