Gifts to the IIT (BHU) via IIT (BHU) Foundation are classified as either endowed or expendable (non-endowed). An endowed gift is money given by a donor that is to be invested in perpetuity by the Foundation, with the distributions available to spend on activities consistent with the donor intent. If pledged over multiple years, earnings from an endowment fund may be reinvested until the endowment is fully funded before any disbursement will begin.
The Philosophy behind IIT (BHU) Foundation’s endowment investment is to assure grantors, donors and potential donors that their funds will be managed prudently to support the long-term viability of the Foundation’s programs. The endowment’s goal is to preserve the assets we manage in perpetuity while generating investment returns for current spending needs of the Institute aligned with the donor’s intent. Understanding that the Foundation is investing for the current and future generations, we have a lot to protect. As such, we take this responsibility quite seriously.
The Foundation’s current endowment distribution allocation policy is to disburse 5% annually, based upon endowment principal market value over the last 36 months. This disbursement percentage is subject to change annually based upon a “banded inflation” model that we use that takes into account inflation rates in USA and India. These calculations are made on a monthly basis. If the market value of the endowment principal of any fund, at the end of each month, is less than or equal to the initial value of all the contributions made to the endowment principal, then distributions will be limited to interest and dividends received.
IIT (BHU) Foundation’s Board of Directors (BOD) has ultimate fiduciary responsibility for investment decisions. However the BOD has created an Investment Committee (IC) which provides the oversight and management of the endowment on a day to day basis. The IC establishes and implements an investment strategy to achieve the investment and financial return objectives set by the BOD. The IC oversees portfolio asset allocation, investment structure, risk management, and performance tracking to evaluate investment strategy success.
The IC reports periodically (every quarter) to the BOD on all important Foundation fund management matters such as material changes to the investment policy, allocation targets and ranges, portfolio performance and liquidity. The Foundation’s IC has developed a written investment policy that defines portfolio strategies and goals and sets risk management parameters. High level asset allocation and past performance information will be posted on the Foundation’s website annually.