Advancing a Healthier Wisconsin Fund Management
The Medical College of Wisconsin has invested the Advancing a Healthier Wisconsin funds in diversified funds including equity, fixed income, alternative investments and cash equivalents. Investments are made in accordance with the Endowment Investment Policy. The investment goal is to maintain the real value of the funds while providing a stream of income to fund the initiatives and partnership programs of the Five-Year Pan.
The Medical College of Wisconsin adheres to a long-term investment planning horizon while recognizing that rates of return may be volatile on a year-by-year basis and achievement of investment objectives may not progress uniformly over time. Funds are managed according to prudent standards as established by the laws of the State of Wisconsin. All endowment funds including the Advancing a Healthier Wisconsin funds, are invested in a unitized pool. Pooling of funds allows an individual participating fund to benefit from diversification and economies of scale in the investment process. Income is also unitized and allocated based on relative value on the first of the month. Realized capital gains are reinvested in the pool. The separate identity of each fund participating in the Endowment Fund pool is fully preserved, and each fund's share in the income and gains of the pool is assured.
The Medical College of Wisconsin has retained Marshall & Ilsley Trust Company to maintain the unitized accounting for the Endowment Fund, including the Advancing a Healthier Wisconsin funds. The Advancing a Healthier Wisconsin funds are maintained in six separate accounts within the Endowment Fund. With respect to the 35% allocation of the funds for the Healthier Wisconsin Partnership Program, an account for the immediately available funds (funds available for current program distribution), an account for the spendable funds (funds available for future program distribution), and an account for the true endowed funds are maintained. Similarly, three accounts are maintained for the 65% allocation of the Funds for Health Improvement through Research and Education, one for the immediately available funds, one for the spendable funds, and the other for the true endowed funds. Statements of financial position of the Advancing a Healthier Wisconsin Program administered by The Medical College of Wisconsin, Inc. and the related statements of activities and changes in net assets and cash flows are audited annually by independent auditors.
The Advancing a Healthier Wisconsin funds are integrated into the annual financial audit of the Medical College of Wisconsin. The financial schedule is prepared using substantiated numbers from the Medical College of Wisconsin's audited financial statements. Spendable fund distributions include investment earnings from the True Endowment Fund and the Immediate Fund.
True Endowment Fund distributions are based on a defined portion of the market value of the endowed funds, as specified in the Grant Agreement. For the year ended June 30, 2005, the defined portion of the market value was initially $100,000,000 (33%). Effective April 1, 2005, following WUHF's successful review of the 2004 Annual Report, the Spendable Fund Distribution from the True Endowment is based on 60% of the market value of the funds. Investment earnings on the remaining portion of the market value are temporarily restricted under the terms of the Grant Agreement and remain in the True Endowment Fund.
The Immediate Fund distributes all investment earnings to the Spendable Fund.