Guide to Giving

Charitable Trust Disclosure Statement

< Life-Income Gifts

A charitable trust is a charitable giving vehicle that results in a charitable gift to Indiana University Foundation (the "Foundation") and payments of fixed or variable amounts to the named beneficiaries for life or a stated period which does not exceed 20 years.

Charitable trust assets held by the Foundation are organized into Investment Pools. Each Investment Pool includes only assets of similar charitable trusts. The Bank of New York is the custodian of these assets, and the Investment Pools are managed by the Foundation's staff. This staff is qualified by 20-plus years of investment management experience and professional designations including Chartered Financial Analyst. Investment Pool funds are managed in accordance with investment guidelines established by the Investment Committee of the Foundation's Board of Directors. The guidelines are implemented to meet the investment objectives of each fund within reasonable risk levels. Because these pools are invested in financial securities, the market value of the assets will fluctuate due to general market conditions and specific investments within each fund.

The Foundation provides an accounting of its transactions with respect to each account invested in its common funds on a periodic basis, which is not less than annually. Contributions and withdrawals from each Investment Pool are allowed monthly at the calculated net asset value. There are no specific charges assessed in connection with contributions or withdrawals.

As is common with most trusts, there are certain fees incurred for investment services. The normal annual fee structure is 1 percent of the market value of trust assets up to $1 million and 0.5 percent of the market value of the assets in excess of $1 million. A portion of the fee covers accounting and management costs within the Foundation, and the balance is used to compensate the fund custodian.

A description of each Investment Pool, its investment objectives, and its market value on June 30, 2003 follows:

Equity Trust Investment Pool: A diversified portfolio consisting of U.S. common stocks, American Depository Receipts, bonds, and cash with the objectives of maximizing total returns within acceptable risk levels. The fund's objective is to outperform the Standard and Poor's 500 Index over the long-term. On June 30, 2003, the total market value of the Equity Trust Investment Pool was $21,562,925.

Bond Trust Investment Pool: A diversified portfolio consisting primarily of U.S. Bonds—Treasuries, Agencies, and Corporates. The fund is managed for current income with appreciation a secondary goal. The fund's objective is to outperform the Lehman Intermediate Government/Corporate Bond Index over the long-term. On June 30, 2003, the total market value of the Bond Trust Investment Pool was $10,373,933.

Investment Pools held by the Foundation are exempt from registration requirements of the Federal Securities Laws under the exemption for collective investment funds and similar funds maintained by charitable organizations set forth in the Philanthropy Protection Act of 1995 (P.L. 104-62). Information in this disclosure statement is intended to satisfy the disclosure requirements set forth in that Philanthropy Protection Act. Accordingly, beneficiaries whose trust assets are included in the Foundation's Investment Pools do not receive full protection of the Securities and Exchange Commission laws.

The Indiana University Foundation is a nonprofit corporation organized in 1936 under the nonprofit laws of the State of Indiana for the purpose of raising, investing, and administering funds for the benefit of Indiana University. It is exempt from federal income tax under section 501(c)(3) of the Internal Revenue Service Code of 1986. The Foundation is governed by a Board of Directors, a majority of the members of which must be graduates of Indiana University. The total market value of the Foundation's invested funds exceeds $1 billion; these funds are invested primarily in stocks, bonds, and money market funds.

Additional information will be provided upon request.