Target Endowment
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The target size for the Endowment Fund is €30M, ensuring permanent funding for operating expenditure for UWC Mostar

Operating Costs

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Current funding sources

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Endowment target

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Sources of donor funding

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Principles & Donor Promise
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The Endowment Fund will be founded on the promise that donors will be able to “to see their money working”. It's our goal to be excellent stewards of donor capital.
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The core principles:
  • The endowment has a fiduciary duty towards its donors, UWC Mostar and UWC Mostar’s students
  • The Endowment should be fully transparent towards its donors in terms of fund allocation and distributions
  • The Endowment should have in place worst case planning scenarios and should be prepared for periods of upheaval and severe difficulties
Taking care of the donor’s interests:
  • The Endowment should facilitate what the donor wishes
  • Legal and tax advisory service should be provided to the potential donors at set-up stage by PwC and Allen and Overy
The proposal is for donations to provide a tight link between each donor and the direct beneficiaries of the donation
  • Donations will in general be linked to individual Endowment Scholarships which fund individual students
Once the Endowment Fund is up and running, there will be full transparency to all donors through timely and extensive communication
  • Every February the donor will receive a report from the endowment on past year’s performance and on other organisational matters
  • Every September the donor will receive a report from the College how the past academic year has been. This will be a frank and open report where all issues are discussed.
  • Every June the donor will receive a report from the student whom he or she is sponsoring
  • Every two years an event will be organised with the donors at UWC Mostar
  • If there any urgent matter of importance related to the Endowment Fund, the College or the sponsored student, the donor will be immediately notified. This will be in line with our principles of integrity, transparency and accountability
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A strong governance structure for the Endowment Fund has been put in place to ensure that the capital donated to the Fund is managed in line with the objectives of the donors
goverance structure
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The Endowment has been set up in the UK, incorporated under UK Law and registered with the Charity Commission
The Endowment will have two principal bodies, namely the Trustees and the Investment Committee
  • The Trustees will have the ultimate responsibility for the Endowment and for the approval of the use of funds generated by the Endowment
  • The Investment Committee will be responsible for making overall asset allocation decisions, for the selection of professional money managers of Endowment funds and for the day to day operations of the Endowment
Subject to annual approvals by the Trustees, the Endowment will distribute funds to the Foundation ‘Education in Action’, which is a legal entity incorporated under Bosnian law responsible for the long-term funding of UWC Mostar
The annual approval process will be based on a combination of a) an annual budget for UWC Mostar presented to the Trustees and b) bi-annual update reports that set out how the school is performing against pre-agreed key performance indicators
The funds will be disbursed to UWC Mostar through the Foundation and the Executive Board of UWC Mostar, which has the day-to-day operational and administrative responsibility of running the College
Performance monitoring
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Both the Endowment and UWC Mostar will have their performance monitored against targets, with ongoing communication of performance to donors
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Both the Endowment and UWC Mostar will have targets in place
  • These targets will be measurable and will permit the ongoing monitoring of the performance of the Endowment and UWC Mostar
  • Performance against target will be communicated to all donors on an ongoing basis
The key area to monitor for performance for the Endowment is investment performance
  • The Endowment will have a medium-term return target of a 5% total return on investment net of all expenses
  • The Total Expense Ratio of the underlying funds will be monitored alongside the net returns
  • These targets will be identified and communicated to donors
Although an educational institution such as UWC Mostar will have many benefits which are not measurable in terms of numbers, the College will need to have certain key performance indicators in place that are monitored over time
  • Examples of potential KPIs would include the pass rate, average IB results, the number of scholarships won for leading universities around the world as well as management of expenditures within budget
  • Again these indicators will be identified and communicated to donors.
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Risks will be mitigated by proactive planning and controls

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In the short term, there is a risk that insufficient funds will be raised
If that were to happen, donors would have the option to pull out of the commitment to fund the endowment
In the long term, conflict in the region might return
The College and the Endowment will have contingency plans in place to protect the safety of students and staff
In the long term, there is a risk of cost inflation in Bosnia
  • For example, salaries (the largest component of the cost structure) are low compared to the rest of Europe
  • If costs grow faster than investment results, there is a risk that the fund will need to eat into its capital
Backstop financing to deal with cost inflation is to be sought from international bodies such as the IFC, World Bank, FMO, EBRD or EU
Corruption might thwart the correct use and distribution of the funds made available by the Endowment
Strict internal financial controls, independent audit checks and robust governance structures have been implemented
Poor investment results might have a negative impact on the Endowment's ability to distribute funds on an annual basis
Risk is mitigated by investment guidelines stressing asset allocation that prioritizes cash flow yield and principal protection