Trust & Endowments
Monetary donations to TMU are recorded, managed and reported in the Financial Information System (FIS or Oracle) (opens in new window) as trust and endowment funds. Donations can be restricted for a specific purpose as donor agreements sometimes stipulate a designated purpose for the donated funds.
Learn more about giving to TMU.
These are expendable funds received for specific purposes and spent within a set amount of time. The funds held in trust are distinct from funds held for endowments.
An example of trust funding is a donation for constructing a new building.
Endowment funding is non-expendable and is therefore invested with objectives of principal protection and total return at a level that is sufficient to meet obligations for specific purposes. A portion of the investment income from these funds is expendable and is made available each year for designated purposes.
An example of endowment funding is a donation for scholarships or endowed chairs. Learn more in the Endowment Funds Policy.
Trust and endowment fund management
Once donations are recorded by University Advancement in the financial system, the Accounting, Collections and Treasury unit manages the administration, accounting and reporting of the funds.
This includes liaising with external fund managers, calculating interest allocations and annual spend distributions and returning unspent amounts back to the stabilization funds. The group also ensures that the accounting and reporting of these funds conforms to TMU’s policies and accounting bodies requirements.
TMU follows an ethical investing approach that is described below:
The Endowment, Foundations and Trust Fund in which TMU’s endowment funds are invested employs an Environmental, Social and Governance (ESG) approach. There are two elements to screening companies when analyzing the merits of each investment from an ESG perspective.
The first screen that managers employ excludes companies based on the products they produce, the geographic area in which they operate, or alternatively their performance record in specific areas which will typically result in the exclusion of companies that are primarily involved in tobacco, alcohol, pornography, weapons related production or are involved in gambling. Exclusionary screening is generally based on a threshold of involvement in an area.
The second screening involves qualitative analysis. As there are no truly “black or white” corporate entities, it is necessary to examine corporations in their totality to choose those companies that on balance are employing sound social and environmental practices. This requires a “best practices” approach and ranks individual entities against their peers in the same industry. As no company is perfect, we are looking for companies that demonstrate an awareness of ESG issues and are making an effort to improve areas of weakness. Such qualitative criteria includes compliance with the Charter of Rights and Freedoms and the environment, ethics and corporate practices, involvement in the community, labour relations and practices that are connected and the safety purpose of the product.
Finally, as part of our ESG approach, a proxy voting policy is applied for equity portfolios. In doing so, we aim to improve the management of firms we invest in and promote social values of the fund’s participants. In our assessment of the level of preparedness to Environmental, Social and Governance issues of companies in our portfolios, we rely on the research prepared by Sustainalytics.
Sustainalytics is a pioneer in research on environmental, social and governance issues, with over 20 years of experience. With over 130 employees, including 70 analysts, the company was designated best non-financial rating agency by Thomson Reuters Extel Survey in 2012. When looking at controversies affecting a company and their impact on stakeholders, Sustainalytics classify the controversies on a scale of one (minor impact) to five (major violations of human rights, environmental disasters, strong impact on stakeholders, etc.). During the portfolio review process, Sustainalytics provides insight and highlights the controversies that have a major impact on the stakeholders, and might represent an important non-financial risk. Their detailed view on controversies ensures the portfolio managers are well aware of ESG issues and enable them to adjust their understanding of the potential risks. They would analyze the issues that have the potential to impact the profitability and future business growth of the company and, based on their judgment, they would discuss the issues with the management of the companies in order to raise awareness on ESG issues.