College funds that have been restricted by the donor ("donor-restricted gifts" or "donor-restricted funds") should be fully expended annually in accordance with the donor's wishes as stated in the donor fund agreement. In order to make the best use of our resources and to maintain excellent relationships with current and future donors, the college requires that a donor-restricted gift must be used to pay for an expense for which it is earmarked before any unrestricted money is used for the same purpose. Additionally, it is in the best interest of Davidson College and the relationships with donors to comply with donor intent and to fully use the funds given by these benefactors in a timely manner.
This policy governs the expenditure of all donor-restricted funds to help ensure good stewardship of the funds entrusted to Davidson College. This policy outlines how annual expenditures from restricted funds will be made and reviewed, and in every possible case, how the funds will be expended in the current year in accordance with the donor fund agreement.
The college will expend donor-restricted current-use funds and endowment earnings each year. In cases where the funds cannot be fully expended in accordance with donor restrictions, a committee composed of staff from Donor Relations and Business Services will determine the next steps.
Annually, during May, Donor Relations and Business Services staff will review the status of all donor-restricted funds. In cases where donor-restricted funds are not being fully spent, conversations with the appropriate vice president or designee will follow. Generally, funds not expended will be transferred to another budget(s) to cover applicable expenses in that fiscal year that are deemed to meet donor restrictions. In this manner, unexpended donor-restricted funds will be budget-relieving for expenses that are consistent with the donor fund agreement.
However, in certain cases, a donor fund agreement may allow funds to be accumulated to accomplish a particular purpose (e.g. biennial programs) but such a plan must be approved in advance by the applicable Vice President or Athletics Director and discussed with the Vice President for College Relations.
Funds with balances for which the spending requirements cannot be met during the current year will be analyzed for possible next steps, such as carryforward to the next fiscal year or possible reinvestment into the endowment. In addition, the Controller/Director of Business Services shall review the proposed resolution of unexpended funds with the applicable divisional VPs and Director of Athletics. If appropriate, the Controller, applicable divisional VP and VP for College Relations will meet if donor restrictions will prevent the spending of funds over an extended period of time. All such exceptions shall be reported annually to the VPFA and, where appropriate, to the President.
The Controller/Director of Business Services shall oversee this policy and review it at least once every two years. Changes to this policy shall be made in accordance with the College's Policy on Policies. Appeal of any decision with regard to this policy may be made to the Controller/Director of Business Services or to the Vice President for Finance and Administration.
Date of Adoption: August 31, 2015
Last Reviewed: August 31, 2015