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Setting up Loans Against the Endowment in Fundriver without the Manager Module

For clients that begin using Fundriver with a loan against their endowment already in place, case by case decisions will need to be made regarding how to handle the loan in the Fundriver system. For clients that are just taking out a loan (after using Fundriver for a while or during the process of implementing Fundriver), there are some best practices to consider (below).

We recommend that loans are treated the same way as any other endowment investment, and handled accordingly. Whether or not an organization uses the Investment Portfolio Module determines how the loan is accounted for in Fundriver. Please see below for both methods.

More information on handling loans as investments can be found at the following link:http://www.beneschlaw.com/Files/Publication/07329c5a-fde0-4127-a966-ac812ea51267/Presentation/PublicationAttachment/1760ab62-cf04-413a-bdc0-b25ad1ffb2a7/Benesch_Perspectives_Sept2012_100112.pdf

Pool-Level Set Up Overview:Return of principal and interest payments are received and entered in to the Total Market Value of the pool, along with the investment information from all other managers.

Investment Pool Level Method (No Manager Module):  The outstanding loan amount plus interest is added to the pool's ending market value on the INVESTMENT ACTIVITY screen.  Going forward, as loan payments are received and interest is earned, it is rolled in with the other investment manager activity and entered at the pool level.  In this scenario, the loan is treated exactly as if it were just another investment manager.

In this example the loan is $1,000,000.00 which is added to the ending market value for the investment pool.

Record the interest payment under interest and dividends.  

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