(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.

just because money is in an endowment that does not mean there are any federal or state restrictions on that money because it is in an "endowment"

donors can place restrictions such as the department, professorship, scholarships ect that the proceeds are used for or the amount of proceeds paid out from their donation, but even then in the fine print of most of the paperwork it will make clear that at some point and time in the future of the BOR or Trustees vote on it the money can be shifted and used for some other purpose

if you had an endowment for the engineering of carriages and the proper care for the horses that pull them well that program is long gone

if you had a dairy science program with an endowment or a nuclear engineering program and you get rid of that program because of cost, declining demand or lack of job prospects the money going to support that will go elsewhere

and a university could spend everything in the endowment in a single year if they wanted to and the BOR or Trustees approved it provided there are no restrictions on the payouts made by the donors

even then if there is an emergency or some other issue that demands that type of drastic action it could happen.......that would be like the women
's university that was in NC (or wherever it was) and they were shutting down the school because it was simply not viable

they were going to shut it down and spend the endowment to nothing or as much as needed to graduate the last classes then they were going to do something else with whatever was left over (I think they were going to endow scholarships for female students from the area to other schools)

that university I believe ended up staying open though so they did not start spending the corpus

but because something is termed a "endowment" that does not place many (if any) federal or state restrictions on that money