CMS/SMC
Canadian Mathematical Society
www.cms.math.ca
Canadian Mathematical Society
Message from the Executive Director:

Establishing Endowed Funds

Preamble

At present, the Canadian Mathematical Society (CMS) maintains an Operations Fund (OF), consisting of four Divisions (General, Education, Research and Publications), and three Restricted (Investment) Funds (the Endowment Fund (EF), the Mathematical Olympiads Fund (MOF) and the Designated Activities Fund (DAF)). The revenues and expenditures for activities relating to each of the four Division and three Restricted Funds are recorded and reported upon separately.

The Restricted Investment Funds are managed by TD Asset Management and the Finance Committee is responsible for reviewing the performance of these assets and for making recommendations on the asset mix and performance benchmarks as necessary. Although the Restricted Investment Funds are separated from the Operations Fund, the funds have not been established as true endowment funds with corresponding terms of reference. The CMS Finance Committee has recommended that the Society establish Terms of Reference for the "CMS Endowed Funds".

It is proposed to transfer the majority of the Restricted Investments Funds to two Endowment Funds -- the CMS Endowment Fund and the Mathematical Olympiad Endowment Fund. These two Endowment Funds, together with any future Endowment Funds established and approved by the Board, would comprise the CMS Endowed Funds. The remaining portion of the Restricted Investment Funds not transferred to the CMS Endowed Funds would be transferred to a "Contingency Fund" which would reside within the Operations Fund. Although every effort will be made to ensure that the Operations Fund does not experience a deficit, the Contingency Fund would be used to offset a deficit if such a situation were to arise. Conversely, unexpected surpluses arising within the Operations Fund would be transferred to the Contingency Fund.

Given below is a description of the CMS Endowed Funds and the Terms of Reference for the CMS Endowment Fund and the Mathematical Olympiads Endowment Fund as well as an outline of the Principles for the Preservation of Capital. It is anticipated that an Endowed Funds Committee would be established to oversee the CMS Endowed Funds.

The Finance and Executive Committees have approved, in principle, the terms of reference and the preservation of capital principles described below. We now seek input from CMS members regarding this matter. Please send your comments by email to me (director@cms.math.ca) no later than February 15, 2005. Based upon the comments received, a final proposal will be prepared and submitted for the approval of the CMS Board of Directors in June 2005.

Description

The Endowed Funds of the Canadian Mathematical Society (CMS) are to provide income to be applied generally or specifically in support of activities that promote and advance the discovery, learning and application of mathematics and for other similar purposes.

The Endowed Funds shall initially consist of two funds, the CMS Endowment Fund and the Mathematical Olympiads Endowment Fund, contributed from the CMS Restricted Funds. The Endowed Funds shall also include other Endowment Funds that may be established using additional moneys and property as may from time to time be donated to the Endowed Funds or to the CMS, subject to approval by the CMS Board of Directors.

The Terms of Reference that have been approved for a specific Endowment Fund by the CMS Board of Directors and the original donor (if applicable) shall govern all gifts or donations to that Endowment Fund.

Gifts and donations to the Endowed Funds shall be invested in accordance with the CMS Principles for the Preservation of Capital.

The CMS will strive, with the assistance of the original donors (where possible), to increase the capital in each existing Endowment Fund through other donations, pledges, gifts etc.

The CMS Endowed Funds Committee, or another committee determined by the CMS Board of Directors, will be responsible to the Board for the administration of the CMS Endowed Funds. The membership of an Endowed Funds Committee, or another committee determined by the Board, may be changed as necessary.

CMS Endowment Fund

Terms of Reference

The CMS Endowment Fund is to be used to provide annual income for support of activities that promote and advance the discovery, learning and application of mathematics and for other similar purposes, including:

  1. mathematics prizes and scholarships that are awarded through competition to students and academic staff at schools, universities and colleges in Canada;
  2. mathematics research, through the communication of current research to both the specialist and non-specialist, public recognition of research accomplishments and collaboration with the research institutes, granting agencies and the users of mathematics;
  3. mathematics education, through joint projects with mathematics educators at all levels, promotion of educational advancements, and partnerships with Provincial ministries of education and organizations supporting mathematics education;
  4. mathematics competitions and other activities that promote and advance the discovery, learning and application of mathematics in the Canadian provinces and territories;
  5. grants to students and teachers in developing countries to provide access to publications of Canadian mathematical societies and the Canadian mathematics research institutes and for other similar purposes;
  6. initiatives that explain, promote and increase the general understanding of mathematics, provide extra-curricula opportunities for students, and encourage partnerships with corporate, government and not-for-profit agencies.

Mathematical Olympiads Endowment Fund

Terms of Reference

The Mathematical Olympiads Endowment Fund is to be used to provide annual income for the CMS Mathematical Olympiad program in Canada, including, but not necessarily limited to, the Canadian Mathematical Olympiad, Canada's participation in the Asian Pacific Mathematical Olympiad and Canada's team to the International Mathematical Olympiad. The Society's mathematical Olympiad program is the responsibility of the CMS Mathematical Competitions Committee in accordance with the policies and procedures approved by the CMS Board of Directors. The annual income from the Mathematical Olympiads Fund would be provided as a grant to the Society's Olympiad activities.

Principles for the Preservation of Capital

Gifts and donations to the Endowed Funds shall be invested in accordance with the principle to preserve capital and the investments shall include an asset mix of Canadian fixed income securities and Canadian and foreign equities and shall be invested in securities, other than real estate, as authorized by the current laws in force for the investment of funds of Canadian Life Insurance companies.

The intention is for the annual income for each Endowment Fund to provide for both real return and for inflation. This will be achieved through:

  • asset diversification,
  • investment in only investment grade assets,
  • limiting expenditures to an amount reflecting the rate of real return,
  • investment in both fixed income and equity assets, and
  • maintaining an appropriate balance between fixed income and growth (equity) assets. As a guideline, and depending on market conditions, an asset mix such as 30% -- Canadian Bonds, 10% -- Canadian Real Return Bonds, 10% -- Canadian Equities, and 50% -- Global Equities would be appropriate.

Normally, a portion of the annual income for an Endowment Fund will be added to the capital base for the Fund and a portion of the annual income will be provided as revenue for the Fund. If necessary, the Board may approve that all of the annual income for a Fund shall be added to the capital base for the Fund, but not for more than five years consecutively. The maximum amount allocated to annual income should not exceed 6% of the capital base for any Endowment Fund within the Endowed Funds.

Also, should the situation arise that there is no annual income for an Endowment Fund, the Board may approve a transfer of part of the capital base for the Fund to the annual revenue of the Fund, but not for more than two years consecutively.

As circumstances warrant, part of the surpluses from the annual revenues and expenditures for an Endowment Fund can be transferred to the capital base of the Fund.


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