ERIC Number: ED112760
Record Type: Non-Journal
Publication Date: 1970-May
Reference Count: N/A
College Endowment Funds: A Consideration of Applicable Accounting and Legal Principles.
Blackwell, Thomas E.; Johns, Ralph S.
NACUBO Professional File, v1 n2 May 1970
In 1968 the Ford Foundation appointed an Advisory Committee on Endowment Management to study the management of college and university endowment funds with an eye toward the accounting and legal principals of more unconventional investing. The Committee concluded that gains from endowments need not be treated as principal of NACUBO sees this doctrine as being erroneous because it arises out an incomplete reading of the conflicting historical legal opinions regarding charitable trusts and faculty interpretations of those opinions. The evidence presented shows that colleges and universities must retain realized endowment gains as principal. The controversy continues into a discussion of whether the college or university holds the funds as absolute owner or as trustee, and the accounting principals that must be applied in each case as well as the implications of each argument. Additionally, the discussion continues to whether or not realized gains from an endowment should be treated as income or capital gains for accounting and tax purposes. NACUBO looks for a conclusive court ruling in some future test case to prove the legitimacy of their arguments. (JMF)
Descriptors: Accounting, Court Litigation, Financial Support, Higher Education, Investment, Legal Problems, Trusts (Financial)
National Association of College and University Business Officers, One Dupont Circle, Washington, D.C. 20036
Publication Type: Journal Articles
Education Level: N/A
Authoring Institution: National Association of College and University Business Officers, Washington, DC.