Northpoint Bible College

PART V, LINE 4:

“The college's endowment consists of individual donor restricted funds established with contributions to provide scholarship and financial aid to students. As required by generally accepted accounting principles, net assets associated with endowment funds, including any funds designated by the board to function as endowments, are classified and reported based on the existence or absence of donor-imposed or legal restrictions. As required by generally accepted accounting principles, the college classifies as donor restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund is classified as net assets with donor restrictions until those amounts are appropriated for expenditure by the college in a manner consistent with the standard of prudence prescribed by state law. In accordance with the uniform prudent management of institutional funds act, the college may consider the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: the duration and preservation of the fund; the purposes of the college and the donor-restricted endowment fund; general economic conditions; the possible effect of inflation and deflation; the expected total return from income and the appreciation of investments; other resources of the college; and the investment policies of the college. The college has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding for its programs while seeking to maintain the purchasing power of the endowment assets. Under this policy, as approved by the board of trustees, the endowment assets are invested in a manner that is intended to produce a fixed stream of income while assuming a moderate level of investment risk. Actual returns in any given year may vary from this amount. To satisfy its long-term rate-of-return objectives, the college relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest, dividends and net rental income). The college has invested in debt and equity securities that target a diversified asset allocation that places a greater emphasis on equity-based investments to achieve its long-term return objectives within prudent risk constraints. The college has a policy of reinvesting 25% of the income generated by the endowment fund's investments into the endowment. In establishing this policy, the college considered the long-term expected return on its endowment. This is consistent with the college's objective to maintain the purchasing power of its endowment. From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the level that the donor-imposed restrictions require the college to retain as a fund of perpetual duration. There were no such deficiencies as of april 30, 2019 and 2018.”