(05-18-2017 02:33 PM)Wolfman Wrote:  

(05-18-2017 07:35 AM)mturn017 Wrote:  I'm no legal expert but if their endowment came from funds that they themselves generated and not from outside donors as is typical, then there's probably no real restrictions on the money (maybe minimal). So what makes it any different than having the cash in operating funds (invested or not but as has been mentioned it be stupid to not having it earn something)? It seems they just decided to announce they had a billion dollars. Or maybe more to the point a billion dollars that they no longer needed to fund current capital projects.

Endowment implies the money was donated and for a specific purpose. I guess Liberty could put their own money in the endowment but once it is in there I don't think they can use it for another purpose. If the endowment is just a general fund that they can use for what ever they want, it is not really an endowment to begin with.

Personally, I would ask for my money back if I found out they were using money I donated for a specific purpose for something other than that purpose.

Typically I would agree but I don't think LU's money came from donors. The point of putting it in an endowment is that the principal won't be spent just the earnings. A lot of time a donor restricts the use of the earnings but it seems in LU's case it's not.

This article is older but seems to answer a lot of questions that have been raised in this thread.

http://www.richmond.com/news/article_a65...6dd8d.html

"As of June, Liberty officials said the school had about $860 million in net assets and expects that number to exceed $1 billion by year's end — a major milestone for the university.

"We've grown so fast that we can't spend it fast enough," LU Chancellor Jerry Falwell Jr. said.

Since Liberty is a nonprofit, any surplus it generates must be invested back into the school. However, Falwell said there is no strict timeline about when Liberty must use the money; part of Liberty's strategy is to build an endowment that will secure the long-term stability of the school."

And

"Until recently, Liberty's assets were mostly sitting in cash reserves.

Over the past year, Liberty has worked with an assets management firm in New York City, Permanens Capital, to lay the groundwork for converting those cash reserves into low-risk investments. Permanens chief investment officer John Regan said that because Liberty is a young school, the administration is not bound to a "legacy way of doing things.""