Presented by Sean Fleming, CUS President

Commerce Undergraduate SocietyEndowment

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Sources of the Surplus

Where we are now

Causes 1999 Fee Increase Conservative Budgeting

Increase in BCom Enrollment

$441,644 in Operating Surplus on May 1st, 2013

Sources of the Surplus

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Where weare now

Causes 1999 Fee Increase Conservative Budgeting

ChangesLowered Fees to

$245

Increase in BCom Enrollment

Introduced Better Financial Controls

$441,644 in Operating Surplus on May 1st, 2013

Where we can be Create sustainable, cost-efficient value for students

Invest portion of Accumulated

Surplus

Sources of the Surplus

4

Where weare now

1999 Fee Increase Conservative Budgeting

ChangesLowered Fees to

$245

Increase in BCom Enrollment

Introduced Better Financial Controls

$441,644 in Operating Surplus on May 1st, 2013

Where we can be Create sustainable, cost-efficient value for students

Invest portion of Accumulated

Surplus

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February Council Meeting

Is this the best way to invest the money?

Is this what students want?

Does the contract protect students?

Previous:IMANT Endowment

$250,000$50,000 over 5 yearsOld Contract

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Since February Council Meeting

Is this the best way to invest the money

Is this what students want?

Does the contract protect students?

Investment Criteria

Return on Investment

Does this benefit past, current or future students?

Which students benefit?Inter-generational

Benefit

Fit with Organization

Does this fit the CUS’s abilities and goals?Want to make sure this investment can be successfully implemented and overseen by future groups of leaders

Measured in monetary or monetary equivalent terms, adjusted for length of investment

Which channel provides the most value?

Legal Protection

Is the value adequately protected?There are legal, operational and uncertainty risks with any investment and these need to be evaluated

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Investment Options

IMANT Endowment

Principal – Very LowPayments - Medium

3.5%

1AMS Endowment

Medium

.87%

2CSC Down Payment

None after Payment

-.41%

3

Real Return

UBC IMANT provides the best tradeoff of risk and return

Flexibility

Low Low/Medium MediumRisk

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Investment Options

IMANT Endowment

Principal – Very LowPayments - Medium

3.5%

1AMS Endowment

Medium

.87%

2CSC Down Payment

None after Payment

-.41%

3

Real Return

UBC IMANT provides the best tradeoff of risk and return

Flexibility

Low Low/Medium MediumRisk

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UBC Investment Management Trust

3.5% return, $10,500/year in spending

Long term value for students

Strong legal protections for students

IMANT Endowment

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Since February Council Meeting

Is this the best way to invest the money

Is this what students want?

Does the contract protect students?

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Referendum Results

YES85%

NO15%

“I authorize the Commerce Undergraduate Society’s Board of Directors to approve a transfer of $300,000 from its accumulated operating surplus to an endowment to be administered by the University of British Columbia’s Investment Management Trust, with the annual returns from this investment to be used for projects and activities benefiting Bachelor of Commerce students.”

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Since February Council Meeting

Is this the best way to invest the money

Is this what students want?

Does the contract protect students?

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Changes to Contract

Review by External Legal Counsel – Michael Blatchford; Bull, Houser, and Tupper

Any changes must support the purposes (Benefits to BCom students)Article 6/7

Schedule A More clarity about how the money is disbursed and spent

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Investment Options

IMANT Endowment

Principal – Very LowPayments - Medium

3.5%

1AMS Endowment

Medium

.87%

2CSC Down Payment

None after Payment

-.41%

3

Real Return

UBC IMANT provides the best tradeoff of risk and return

Flexibility

Low Low/Medium MediumRisk

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Encroachment HistoryDate Reason

19-Nov-13 Money being taken from faculty's own endowment(s) to create a new professorship.17-Sep-13 Name change for the endowment as requested by the donor.04-Jun-13 Name change for the endowment as requested by the donor.04-Apr-13 Transfering to a new fund as the old fund supported a purpose that no longer exists due to the disolution of a previous Institute.

Exemption from amortization payments.Name changes (x2) for endowments as requested by donors.Expand the purpose of the fund due to an abundance of money in its spending account, as consented to by the family of the donor.Limit the purpose of the fund due to unsufficient resources in it, as requested by the donor's family.Exemption from amortization payments.Name change to reflect a change in the name of the donor organization.Transfer of funds to another endowment due to their being insufficient to support the purpose, as consented to by all of the original donors who could be contacted.Name changes (x2) for endowments as requested by donors.

12-Jun-12 Merging funds and other administrative changes as requested / consented to by the donors.Update terms of reference to reflect changes in the structure of UBC's programs for community service; no next-of-kin.

06-Feb-13

04-Dec-12

20-Sep-12

03-Apr-12 Exemption from amortization payments.Name change to reflect the acquisition of the original corporate donor by another company.Collapsing the funds and transferring them to other funds or annual awards, as consented to by the donor.Exemption from amortization payments.Name changes (x8) for endowments as requested by the faculty to reflect a change of name for the faculty itself.Name changes (x2) as requested by corporate-donors.Broadening the scope of elibigility as consented to by the donor.Transferred to an awards account in order to reflect the lack of funds remaining, as requested by the donors.Exemption from amortization payments.

08-Jun-11 Transferred to an awards account in order to reflect the lack of funds remaining, as requested by the donors.Name changes (x3) as requested by donors.Changes to the purpose as requested by the donor.

07-Feb-11 Name change as requested by the donor's family.23-Nov-10 Changing from a prize to a scholarship, with the consent of the donor.16-Sep-10 Collapsing the fund and transferring it to another one with a similar purpose, as requested by the faculty that crated the fund.08-Apr-10 Changing the payout term as consented to by the donor.04-Feb-10 Broadening of the purposes as consented to by the donor.

05-Apr-11

02-Feb-12

27-Sep-11

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Appendices

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AMS Endowment

.87% return (5 year average), $2,610/year

Flexibility if new projects emerge

Exposed to all the same risks as the CUS

AMS Endowment

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Investment Returns

NPV EANB

IMANT $ 155,497 $ 6,194

AMS $ 30,704 $ 1,223

CSC -$ 30,274 -$ 1,206

Status Quo -$ 188,271 -$ 7,500

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AMS Investment Returns

Average Performance5 year 10 year 15 year

Annual Interest Income $ 292,986

$ 273,799

$ 255,016

Average Performance5 year 10 year 15 year

Effective Annual Return 2.33% 2.86% 3.33%Annual Inflation 1.47% 1.78% 1.99%Real Return 0.87% 1.08% 1.34%

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The actual return was 2.53%, 27% lower than stated

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