Dr. Jason S. Drummond Vice President for University Development Executive Director of the UCM Foundation Smiser Alumni Center Warrensburg, MO 64093 Office 660-543-4157 FAX 660-543-4617 August, 2012 Donor Name Donor Address City, State ZIP Dear Donor Name: On behalf of the University of Central Missouri Foundation, thank you for your continued support of UCM and our students. I am pleased to provide you this individualized report on the endowment that you have generously created to grow our mission. The report provides a financial overview of our overall endowment performance as well as information specific to your fund for the fiscal year ending June 30, 2012. At the UCM Foundation, it is important that we make sure your gift counts. When it comes to our investment policy, our Board of Directors employs a conservative approach so that we minimize losses and maximize gains. Our strategy has made it possible to increase the payout rate in fiscal year 2013 by 63%, providing $761,368 in support of UCM's students and academic programs. Donors like you, who help grow our endowment, are especially important because endowed funds are our most secure source of future revenue. A strong endowment enables more student scholarships, student programming and faculty resources helping us to continue our leadership position within higher education. It also means we can make decisions based more on our values and priorities rather than be influenced by external market forces. As you read through this report, you may want to increase your endowment or consider other giving methods that will further advance our students and university. A giving form and return envelope are enclosed for your convenience. If you would like more information about other giving opportunities or have questions about this report, please call me at any time. Warmest Regards, Jason S. Drummond Executive Director
A Personalized Report about Your Endowment Fund University of Central Missouri
What Your Gift Helped UCM Achieve in 2011-12 Inside Your Personal Statements Endowment Balance Market Value Recipients Award History Terminology Endowment Overview and Areas of Support Endowment Sources of Gifts and Payout Endowment Management Investment Process and Market Value History Finance Committee Board of Directors
What Your Gift Helped UCM Achieve in 2011-12 One of the largest graduation classes in UCM history 1,263 students in spring 2012
Endowment Overview and Areas of Support Totaling $29 million on June 30, 2012, the endowment managed by the UCM Foundation contained 459 funds with a variety of designated purposes and restrictions. Approximately 92% of funds constitute true endowments, gifts restricted by donors to provide long-term funding for designated purposes. The remaining 8% represent quasi-endowments; these are monies the UCM Foundation Board of Directors chooses to invest and treat as endowments. Donors frequently specify a particular purpose for gifts, creating endowments to fund student scholarships, academic programs, chairs and professorships, awards, athletics, and general purposes that range from unrestricted to diversity and international relations. Although distinct in purpose or restriction, endowment funds are commingled in an investment pool and tracked with unit accounting. Endowment gifts of cash, securities, or property are valued and exchanged for units that represent a portion of the whole investment portfolio. Endowment Areas of Support FY 2012 1% 7% 17% 6% 2% 67% Student Scholarships Awards Chairs and Professorships Academic Programs Athletics General
Endowment Sources of Gifts and Payout Endowments are funded by a variety of sources as represented by the chart below. Because of their long-term significance, these gifts are the most stable source of future funding for the UCM Foundation. Sources of Endowment Gifts FY 2012 15% 5% 1% 3% Alumni Friends Corporations Foundations Estates and Trusts 76% Endowment Payout FY 2012 Earnings from endowments are used to provide financial support to UCM. These earnings are referred to as payouts and are approved by the Foundation Board of Directors annually at their January meeting. The graph below shows the significance of this support over the past five years. 1,250,000 1,000,000 750,000 500,000 250,000 0 2008 2009 2010 2011 2012
What Your Gift Helped UCM Achieve in 2011-12 One of the largest enrollment classes in UCM history 11,637 students in fall 2011
Endowment Management Since 1988, the UCM Foundation Finance Committee has been responsible for oversight of the endowment, incorporating investment experience into portfolio policy formulation. The committee consists of the executive director and other board members who have particular investment expertise. They meet three times annually to review asset allocation policies, endowment performance and strategies proposed by our investment managers. The committee approves guidelines for investment of the endowment portfolio, specifying investment objectives, spending policy and approaches for the investment of each asset category. In the below chart, for comparison purposes, we benchmark against 50% of the S&P500 and 50% of Barclays Intermediate Goverment/Credit Bond Funds. Investment Performance 20% 15% 10% 5% 0% -5% -10% -15% 2008 2009 2010 2011 2012 UCM Returns Peer Returns Benchmark
Investment Process Active long-term investment returns are best produced by maintaining a consistent investment philosophy and process. The need to provide resources for current operations and preserve purchasing power of assets dictates investing for high returns, causing the endowment to be biased toward equity. In addition, the university s vulnerability to inflation further directs the endowment away from fixed income and toward equity instruments. The UCM Foundation balances short- and long-term needs through its investment strategies realizing that attractive long-term returns are enhanced by asset allocation and diversification decisions. At its May 2012 meeting, the UCM Foundation Finance Committee adopted several changes to the investment policy portfolio allocations to focus on long-term investment returns. They approved an asset allocation model with target allocations and an appropriate benchmark in the following manner: 53% in equities, 32% in fixed income and 15% in alternative investments. Within each target allocation, there are allocation ranges and asset classes that provide our investment managers the flexibility to enhance returns through different market cycles. Market Value History 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 2008 2009 2010 2011 2012
What Your Gift Helped UCM Achieve in 2011-12 A 92 percent graduate job placement rate, the 16th consecutive year for UCM to exceed the national average
Finance Committee Chair Dan Power 73, 74 Financial Adviser, Edward Jones Members Ray Burton 78 Retired Dentist Wade Carpenter 90 Financial Planner, Summit Wealth Advisers LLC Gary Ervin 80 President, Ervin Cable Construction Sharon Gabel 64 Retired Military Sales Manager, Europe Levi Strauss and Company Greg Hoffman 81 Financial Adviser, Hoffman Financial Resources LLC Sandra Russell Realtor, Elsberry Realty Linda Wade 70, 79, 80 Retired Educator Jesse West 87 Regional Vice President, Union Bank and Trust Co. Ken Weymuth 78 Owner and President, W-K Chevrolet
Board of Directors Executive Committee President: Jesse West 87 Regional Vice President, Union Bank and Trust Co. Vice President: Ken Weymuth 78 Owner and President, W-K Chevrolet Treasurer: Dan Power 73, 74 Financial Adviser, Edward Jones Secretary: Vance DeLozier 71 Owner and Broker, Key Realty Directors Mike Cunningham 73 Owner, Cunningham Construction & Associates Gary Ervin 80 President, Ervin Cable Construction Sharon Gabel 64 Retired Military Sales Manager, Europe Levi Strauss and Company Mark Rubenstein 74 Vice President and Owner Paramount Apparel International Meridith Sauer 97 Commissioner, Warrensburg Arts Council and Community Theatre Tony Tetley 67 Consultant and Principal Software Architect Professional Data Services, Inc. Susie Wetzel Community Leader and Volunteer Directors-at-Large Ray Burton 78 Retired Dentist Wade Carpenter 90 Financial Planner Summit Wealth Advisers LLC Robin Crouch 74 Associate Circuit Judge, Probate Division Linnette Garber 74 Community Leader and Volunteer Mike Hanna 87 Dentist Rand Harbert 85 Chief Agency and Marketing Officer State Farm Insurance Companies, Greg Hoffman 81 Financial Adviser, Hoffman Financial Resources LLC Sandra Russell Realtor, Elsberry Realty Linda Wade 70, 79, 80 Retired Educator Ex-Officio Members Charles Ambrose President, University of Central Missouri Mary Dandurand 78 Member, UCM Board of Governors Jason Drummond Executive Director, UCM Foundation Jim Whiteman 76 Dentist
What Your Gift Helped UCM Achieve in 2011-12 Our students would not have been successful without considerable help along the way. President Charles Ambrose
University of Central Missouri Foundation Smiser Alumni Center Warrensburg, MO 64093 Phone: 660-543-8000 or toll-free 866-752-7257 Fax: 660-543-4705 Email: giving@ucmo.edu Internet: www.ucmo.edu/foundation
Gift Form Return this form to: UCM Foundation, Smiser Alumni Center, Warrensburg, MO 64093 Telephone: 660-543-8000 or toll-free 1-866-752-7257 Fax: 660-543-4705 Email: giving@ucmo.edu On the web: ucmo.edu/foundation Your Name Name of Your Endowment Fund Method of payment Enclosed is a check in the amount of $ made payable to the UCM Foundation. Please charge my gift in the amount of $ to: VISA MasterCard Discover American Express Name on credit card Credit Card Number Expiration Authorization Code (back of card) Credit Card Billing Address City State Zip Signature Please Send Me More Information About: making a gift through a charitable gift annuity how to include UCM in my will or estate plans Please complete and return this form in the enclosed envelope or mail to the above address. FN_DM_ENDOWREP