Endowments are vital to the long-term financial sustainability of nonprofit and higher education institutions (as well as foundations that support them), yet their accounting and reporting requirements can be complex and nuanced. This session will provide a practical overview of endowment accounting including compliance with GAAP and UPMIFA (Uniform Prudent Management of Institutional Funds Act), donor restrictions, net asset classifications, underwater endowments, and required disclosures. We’ll also highlight critical policies that organizations depend on for managing endowments. Attendees will gain clarity on how to properly account for and report endowment activity, ensuring transparency and compliance in financial statements, as well as understanding some tools and best practices for managing endowment funds.

Learning Objectives:

• Differentiate between donor-restricted and board-designated endowments and explain their impact on net asset classification.
• Understand best practices and tools for monitoring and tracking endowments, earnings and spending.
• Apply UPMIFA principles to determine prudent spending and treatment of underwater endowments in financial reporting.
• Identify key financial statement disclosures related to endowment funds, including rollforwards, investment return components, and spending policies.