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Frequently Asked Questions

ICOMAA, NA Endowment Initiative

Draft for distribution to ICOMAA, NA members

1. What is ICOMAA, NA proposing?

The Ibadan College of Medicine Alumni Association, North America (ICOMAA, NA)
established an endowment in 2020 to provide long-term financial support to the College of
Medicine, University of Ibadan, Nigeria.
ICOMAA, NA has already accumulated approximately $89,000 toward this initiative..
The objective now is to build on this foundation through expanded alumni support and launch a
new phase to create fund that can provide meaningful and sustainable support to the College of
Medicine for many years to come.

An endowment is intended to create a source of support that can continue for many years, rather
than relying solely on periodic fundraising.
The basic concept is to invest the funds for the long term and use a prudent portion of the fund’s
resources to support the College of Medicine, while allowing the remainder to remain invested
and grow.
The goal is to create a lasting legacy from the generosity of ICOMAA alumni.

Approximately $89,000 has been accumulated toward the proposed endowment.
This represents a significant beginning, but the fund can have far greater impact through broader
alumni involvement and investment in its mission.
The initial goal is to grow the endowment to 1 million USD over the next few years.

No. The approximately $89,000 will be treated as the initial capital of the endowment, rather
than spending it immediately.

Yes.
ICOMAA, NA is already an IRS-recognized 501(c)(3) charitable organization. The endowment
will be domiciled in the U.S. and managed under applicable IRS laws and regulations.
ICOMAA, NA is developing governance, investment, spending, and grantmaking policies that
will be codified according to international standards.

Yes.
Contribution should be made to ICOMAA, NA, with the appropriate designation for the
endowment.
The endowment will be administered as part of ICOMAA, NA’s charitable activities
Contributions to ICOMAA-NA are tax-deductible to the extent permitted by U.S. tax law.
Donors should retain the appropriate acknowledgment of their contributions for their tax records.
For large gifts, gifts of securities or other property, estate gifts, or other complex contributions,
donors should consult their tax adviser regarding their particular circumstances.

The fund will be used to advance the educational, research, and healthcare mission of the
College of Medicine.
Potential areas could include but may not be limited to:
Student scholarships or financial assistance
Faculty development
Medical education and training
Research
Medical equipment
Educational technology and resources
Library and information resources
Other priorities identified by the College of Medicine
The criteria and procedures for determining the amount and purpose of endowment expenditure
on a year-to year basis will be outlined in the endowment’s governing documents.

The phrase “spend only the interest” is attractive because it suggests that the original capital will
never be touched. However, a long-term investment fund can generate returns in several ways,
including interest, dividends, and increases or decreases in the value of investments.
A formal spending policy will be developed with appropriate professional advice.

Investment values can rise or fall from year to year.
A long-term endowment should therefore not depend entirely on the investment results of a
single year.
One approach under consideration is to base annual distributions on a percentage of the fund’s
average value over several years. This can help smooth the effect of unusually good or bad
investment years.
The final spending policy will balance current support for the College of Medicine with the need
to preserve the endowment’s long-term purchasing power.

No final decision has yet been made.
The committee is considering whether distributions should begin immediately or whether the
fund should first reach a specified minimum level.
At approximately $89,000, even a prudent annual distribution would be relatively modest.
Allowing the fund to grow could ultimately enable it to provide substantially more meaningful
support. This underscores the importance of the current initiative to substantially increase the
endowment's accumulated funds in the near term, thereby enhancing its long-term impact and
sustainability

No final target has yet been established.
For illustration, a $1 million endowment distributing approximately 4% annually would have the
potential to provide roughly $40,000 of support in a year, subject to the actual spending policy,
investment performance, expenses, and applicable requirements.

A larger endowment could provide correspondingly greater support.
The goal is not simply to reach a particular dollar amount, but to build a fund capable of
providing meaningful, sustainable support to the College of Medicine, ideally in perpetuity.

Yes.
Continued contributions will be an important part of building the endowment.
ICOMAA, NA may accept a variety of charitable contributions, subject to its policies and
applicable law, including:
 Individual donations, such as monthly donations or periodic large sums
 Major gifts
 Gifts in memory or honor of someone
 Employer matching gifts
 Gifts of securities
 Bequests and other planned gifts
Instructions for making an endowment contribution to be inserted when determined.

The endowment will be invested under a formal investment policy approved by ICOMAA, NA,
and detailed in the governance documents
The policy is expected to address:
 Investment objectives
 Diversification
 Risk tolerance
 Asset allocation
 Selection and oversight of investment managers
 Investment expenses
 Performance monitoring
 Conflicts of interest
 Periodic review
The objective will be to achieve an appropriate long-term return while taking reasonable
measures to manage investment risk.

The endowment will remain subject to the governance and fiduciary oversight of ICOMAA, NA.

The governance structure will address matters such as:
 Who has authority over the fund
 Committee composition
 Terms of service
 Succession
 Conflicts of interest
 Investment oversight
 Distribution decisions
 Financial reporting
 Accountability to the membership

Insert final governance structure to be inserted.
The ICOMAA-NA Board of Trustees serves as the ultimate governing body responsible for the
endowment's oversight, stewardship, and long-term sustainability

The endowment assets will remain under the legal control of ICOMAA, NA under the
appropriate U.S. charitable structure.
The College of Medicine will be an intended beneficiary of the endowment, but appropriate
safeguards will be established to ensure that funds are used for their approved charitable
purposes.
ICOMAA, NA expects to work closely with the College of Medicine in identifying priorities and
evaluating requests for support.

U.S. charitable organizations can support appropriate charitable activities outside the United
States, but international grantmaking has specific legal and regulatory requirements.
Because the intended beneficiary is in Nigeria, ICOMAA, NA will obtain appropriate legal and
tax advice regarding the procedures and documentation needed for grants to the College of
Medicine.
The objective is to establish a process that is both legally compliant and practical for the College
and ICOMAA, NA.

Transparency and accountability will be important principles of the endowment.

The committee expects to establish appropriate financial and programmatic reporting
requirements.
Members should be able to receive periodic information concerning:
 The value of the endowment
 Investment performance
 Contributions received
 Administrative and investment expenses
 Distributions made
 The purposes for which funds were distributed
 The impact of the endowment on the College of Medicine
A yearly report will be presented at the Annual General Meeting (AGM).
The annual reporting process will be detailed in the governance documents

Yes.
There may be costs associated with investment management, custody of assets, accounting, legal
advice, tax and regulatory compliance, and other administrative functions.
The committee’s objective will be to keep such expenses reasonable and transparent and to
ensure that the overwhelming purpose of the fund remains providing support to the College of
Medicine.

A bad investment year does not necessarily mean that the endowment has failed.
Endowments are designed with a long-term investment horizon. The investment and spending
policies will be designed to take into account periods of market decline as well as periods of
strong performance.
The committee will seek a policy that avoids making major decisions based solely on short-term
market movements.

No.
The endowment is intended to be a permanent charitable asset of ICOMAA, NA.
Its purpose is to outlast the current officers, committee members, and generations of alumni.

The governance structure will therefore include provisions for succession and continuity so that
the fund does not depend on any particular individual or group of current leaders.

At this stage, the following are established:
 ICOMAA, NA is an IRS-recognized 501(c)(3) charitable organization.
 Eligible contributions to ICOMAA, NA are tax-deductible under applicable U.S. tax law.
 Approximately $89,000 has already been accumulated toward the proposed endowment.
 ICOMAA, NA is committed to growing its long-term endowment for the benefit of the College of
Medicine, University of Ibadan.
The detailed legal, investment, spending, governance, and grantmaking arrangements are still
being developed.

These include:
1. Governance
Refine and codify oversight and decision-making arrangements.
2. Investment policy
Codify policies on how the endowment should be invested and monitored.
3. Spending policy
Determine when distributions should begin and how much can prudently be distributed.
4. Grantmaking framework
Establish how support will be provided to the College of Medicine and how accountability will be
maintained.
5. Fundraising strategy
Establish a long-term fundraising goal and plan for additional alumni contributions.