===== PAGE 1 ===== # KENTUCKY STATE UNIVERSITY BOARD OF REGENTS External Relations and Development Committee April 27, 2012 Regent Ronald Banks Regent David Guarnieri Regent Laura Douglas Regent Charles Whitehead, Chair Regent Phyllis Williams Mr. Hinfred McDuffie, Staff ===== PAGE 2 ===== # KENTUCKY STATE UNIVERSITY BOARD OF REGENTS April 27, 2012 External Relations and Development Committee ## INDEX D1 Action Item: External Relations and Development Committee Meeting Minutes (January 27, 2012) D2 Executive Summary Report D3 Executive Contributions Report Alumni Relations Report D4 Information Technology Report Auxiliary Enterprise Report Capital Planning, Construction and Facility Operations Report D5 Communications Report D6 Endowment Investment Policy ===== PAGE 3 ===== # KENTUCKY STATE UNIVERSITY Regular Meeting of the External Relations and Development Committee Board of Regents 11 a.m., April 27, 2012 Board Room, Academic Services Building Regent Charles Whitehead, Presiding ## AGENDA

I.	Call to Order	Regent Charles Whitehead, Chair
II.	Roll Call	Hinfred McDuffie Executive Vice President for Administration
III.	Opening Remarks	Regent Whitehead
IV.	Action Item	Regent Whitehead
	Approval of January 27, 2012, Meeting Minutes
V.	Executive Summary Report - Endowment Management Report	H. McDuffie
VI.	Discussion	Regent Whitehead
VII.	Adjourn.

VII. Adjourn ===== PAGE 4 ===== # KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND

To: Board of Regents External Relations and Development Committee	Date: April 27, 2012
From: Hinfred McDuffie Executive Vice President for Administration
Subject: Committee Meeting Minutes (Jan. 27, 2012)
Reason for Consideration: Approval	Enclosures: Yes

Background: The minutes of the External Relations and Development Committee meeting of January 27, 2012, require approval in order to become an official part of the committee's records. Recommendation: That the External Relations and Development Committee approve the minutes of the January 27, 2012, meeting.

Initiator:	Hinfred McDuffie Executive Vice President for Administration
Board Action Date:	April 27, 2012
Effective Date:	April 27, 2012

===== PAGE 5 ===== Kentucky State University Regular External Relations and Development Committee Meeting Board of Regents External Relations and Development Committee 11 a.m., January 27, 2012 Marriott Griffin Gate Hotel, Salon C Lexington, Kentucky ## MINUTES Regent Charles Whitehead called the meeting of the Kentucky State University Board of Regents External Relations and Development Committee to order at 11 a.m. on Friday, January 27, 2012. Mr. Hinfred McDuffie, Vice President for Administration, External Relations and Development, called roll: Regent Ron Banks, present Regent Laura Douglas, present Regent David Guarnieri, present Regent Charles Whitehead, present Regent Phyllis Williams, present All five regents on the committee were present. A quorum was established. The minutes of the October 28, 2011, External Relations and Development Committee meeting were approved as distributed to the committee. Mr. McDuffie introduced the Division of External Relations and Development staff for area reports as follows: The Alumni Relations and Development reports were presented by Mr. William Wilson, Associate Vice President for Development and Major Gifts. The Information Technology report was presented by Mr. Edward Fields, Director of Information Technology. Mr. Fields stated that the university is working on converting classrooms into smart classrooms, including the College of Business and Computer Science in Bradford Hall, in addition to the computer labs that have been upgraded. Regent Whitehead inquired about the timeframe for converting the other classroom buildings on campus. Mr. McDuffie responded that Carver Hall is receiving upgrades, which will be complete by the fall. He also stated that Hathaway Hall already has smart classrooms. Regent Guarnieri asked if the students have been surveyed to gauge their level of satisfaction regarding access to desktops, laptops and WiFi areas and if so, what has been the feedback. Mr. McDuffie responded that students had been surveyed regarding renovations and upgrades in the residence halls over the winter break. He also stated that a survey on faculty and student satisfaction will be conducted and reported out to the Board. ===== PAGE 6 ===== The Auxiliary Enterprise report was presented by Mr. Harold Hayes, Executive Director of Auxiliary Enterprises. The Capital Planning, Construction and Facility Operations report was presented by Mr. Jack McNear, Associate Vice President for Capital Planning, Construction and Facility Operations. The Public Relations and Communications report was presented by Ms. Felicia Lewis, Assistant Vice President for External Relations/Director of Communications. Regent Whitehead asked if surveys have been conducted regarding the university's marketing efforts. Mr. McDuffie responded that a marketing consultant was engaged to conduct a region-wide survey. The results will be used by the university in planning its future marketing strategy and will be reported to the Board. In addition, the Office of Alumni Relations conducts two surveys per the year, focusing on graduating seniors and alumni satisfaction. The endowment summary report was presented by LouAnn Atlas and James Fereday of Fifth Third Bank. The following action items were presented for approval by the committee to send to the full Board: ## Action Item: Motion was made by Regent Douglas and seconded by Regent Guarnieri for the following: That the External Relations and Development Committee recommend the approval of the Atwood Research Building renovation by the Kentucky State University Board of Regents. The motion passed. ## Action Item: viotion was made by Regent Guamieri and seconded by Regent Williams for the following: That the External Relations and Development Committee recommend the approval of the housing room rate increase I by the Kentucky State University Board of Regents. The motion passed. ## Action Item: Motion was made by Regent Douglas and seconded by Regent Banks for the following: That the External Relations and Development Committee recommend the approval of the proposed asset class inclusions and changes to the asset class strategic ranges and percentages, outlined in Section V (Asset Allocation Guidelines) of the Kentucky State University Endowment Investment Policy, as last amended October 26, 2007, by the Kentucky State University Board of Regents. The motion passed. The meeting was adjourned at 11:52 a.m. ===== PAGE 7 ===== Submitted by: 2023 Approved by: Hinfred McDuffie Executive Vice President for Administration Kentucky State University _____ Approved with no corrections _____ Approved with corrections Regent Charles Whitehead, Chair External Relations and Development Committee Board of Regents Kentucky State University ===== PAGE 8 ===== ## KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND

To: Board of Regents External Relations and Development Committee	Date: April 27, 2012
From: Hinfred McDuffie Executive Vice President for Administration
Subject: Executive Summary Report
Reason for Consideration: Informational	Enclosures: Yes

Background: N/A Recommendation: Informational

Initiator:	Hinfred McDuffie Executive Vice President for Administration
Board Action Date:	April 27, 2012
Effective Date:	April 27, 2012

===== PAGE 9 ===== # Kentucky State University Division of External Relations and Development Report to the Board of Regents April 27, 2012 EXECUTIVE SUMMARY During the period of July 1, 2011, to March 31, 2012, Kentucky State University received the annual giving amount of $486,087 from 479 contributors – corporations, foundations, individuals and organizations. Scholarships received the largest portion of the donations in the amount of $256,404. The amount received for the Uniting Generations . . . Securing Futures – A Capital Campaign for Kentucky State University is $1,407,376. The Office of Alumni Relations processed the following memberships: 811 annual/associate, 356 complimentary to new graduates, 296 life and 39 subscribing life for a total of 1,502 KSU National Alumni Association financial members, as of March 31, 2012. The K-Club has 37 members. There were mass mailings to alumni for the following purposes: Permanent Alumni Scholarship Fund solicitation (1,301 packages), Homecoming (8,548), K-Club (1,116), Classes in Reunion (4,181) and miscellaneous mailings (6,211). A total of 9,405 electronic mailings have been sent. There were two new/revitalized alumni chapters, and the alumni association currently has 24 affiliate chapters. Information Technology reports progress in the Banner System's implementation: Phase I (discovery and hardware installation) is 100 percent complete, and Phase 2, 2.5, 3, 4, 5 and 6 conversions are 100 percent complete. All modules have gone live as scheduled in 2011. IT has also distributed 142 new laptops to faculty; 49 were distributed to residence halls for student checkout. The campus computer labs received upgrades with a total of 156 new desktops: School of Business Lab, Education Lab, Behavioral and Social Sciences Lab, Athletics Lab, Student Center Lab and Academics With Attitude Lab. Auxiliary Enterprise reports that housing occupancy was at 85 percent with 879 students at the end of March. Capital Planning, Construction and Facility Operations had 48 major projects in progress or pending. The university was covered in 445 newspaper articles in Kentucky. The advertising equivalency dollar amount (or cost saving) for the newspaper coverage of KSU was $5,359,347. The university also was covered in 147 television news stories reaching a Nielsen audience of 5,109,862 for a total ad equivalency of $72,610 or total publicity value of $217,817. There were 108 messages posted on KSU's electronic message board. ===== PAGE 10 ===== ## KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND

To: Board of Regents External Relations and Development Committee	Date: April 27, 2012
From: Hinfred McDuffie Executive Vice President for Administration
Subject: Executive Contributions Report & Alumni Relations Report
Reason for Consideration: Informational	Enclosures: Yes

Background: N/A Recommendation: Informational

Initiator:	Hinfred McDuffie Executive Vice President for Administration
Board Action Date:	April 27, 2012
Effective Date:	April 27, 2012

===== PAGE 11 ===== # Executive Contributions Report and Comparison July 1, 2010 - March 31, 2011 to July 1, 2011 - March 31, 2012

Constituency Type Breakdown

Constituency Type	Total Dollars Raised	Total Dollars Raised	Total Participation	Total Participation
Constituency Type	July 1, 2010 - March 31, 2011	July 1, 2011 - March 31, 2012	July 1, 2010 - March 31, 2011	July 1, 2011 - March 31, 2012
Alumni	$56,350.00	$103,138.45	169	245
Corporations	$14,675.00	$8,250.00	16	10
Employees	$10,656.82	$80,532.73	62	27
Foundations	$38,516.00	$75,585.00	21	33
Organizations	$142,328.94	$78,833.06	126	70
Other Individuals	$8,329.00	$141,747.93	64	94
Total:	$271,855.76	$486,087.17	458	479

Donor Designation Breakdown

	Total Dollars Raised	Total Dollars Raised
Donor Designation	July 1, 2010 - March 31, 2011	July 1, 2011 - March 31, 2012
Unrestricted	$13,153.82	$36,731.05
Scholarships	$202,430.26	$256,403.93
Other	$56,271.68	$192,952.19
Total:	$271,855.76	$486,087.17

## Sponsorships

Total Sponsorship Amount
Total Sponsors	July 1, 2011 - December 31, 2011	Percentage of Alumni Giving
N/A	N/A	0.727%

Fundraising Status

CAPITAL CAMPAIGN GIVING

## Constituency Type Breakdown

Constituency Type	Total Dollars Raised	Total Participation
Constituency Type	July 1, 2010 - March 31, 2012	July 1, 2010 - March 31, 2012
Alumni	$200,518	537
Corporations	$228,933	42
Employees	$167,469	147
Foundations	$124,105	95
Organizations	$305,922	258
Other individuals	$380,511	271
Total:	$1,407,376	1,350

Donor Designation Breakdown

	Total Dollars Raised	Total Participation
Donor Designation	July 1, 2010 - March 31, 2012	July 1, 2010 - March 31, 2012
Unrestricted	62,925	188
Scholarships	336,166	376
Other	1,008,285	786
Total:	1,407,376	1,350

Other Individuals ===== PAGE 12 =====

OFFICE OF ALUMNI RELATIONS REPORT

===== PAGE 13 ===== ## KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND

To: Board of Regents External Relations and Development Committee	Date: April 27, 2012
From: Hinfred McDuffie Executive Vice President for Administration
Subject: Information Technology, Auxiliary Enterprise & Capital Planning Reports
Reason for Consideration: Informational	Enclosures: Yes

Background: N/A Recommendation: Informational

Initiator:	Hinfred McDuffie Executive Vice President for Administration
Board Action Date:	April 27, 2012
Effective Date:	April 27, 2012

===== PAGE 14 ===== Information Technology is actively working toward the completion of several projects that will enhance and improve operational efficiency and customer service. It is also working to reduce cost for the overall university. The department is strengthening its internal processes to better serve the needs of the students, faculty and staff.

Banner Enterprise Resource Planning (ERP) implementation	Phase 1 Discovery and hardware installation	100%
	Phase 2 Conversion R1	100%
	Data verification and validation	100%
	Data clean-up	100%
	Banner testing and problem resolution	100%
	Phase 2.5 Conversion R1.5	100%
	Data verification and validation	100%
	Data clean-up	100%
	Banner testing and problem resolution	100%
	Phase 3 Conversion R2	100%
	Data verification and validation	100%
	Data clean-up	100%
	Banner testing and problem resolution	100%
	Phase 4 Integration Testing (classroom pilot)	100%
	Phase 5 Pre-Prod creation for production	100%
	Banner PROD delivery to KSU Dec. 6 Campus Banner training begun (FI and HR)	100%
	Phase 6 Campus Banner Training (FI, HR, FA, ST)	100%
	Finance GO LIVE (Jan. 2011)	100%
	Human Resources GO LIVE (Jan. 2011)	100%
	Financial Aid GO LIVE (Feb. 2011)	100%
	Student GO LIVE (March 2011)	100%
	Accounts Receivable GO LIVE (July 2011)	100%
	Student academic history conversion (Aug. 2011)	100%

===== PAGE 15 =====

Banner Operational Data Store (ODS) Implementation	Phase 1Project schedule developmentProject team creation	100%100%
	Phase 2ODS implementation kickoffODS tech implementation planning	100% (Feb. 2012)100% (Feb. 2012)
	Phase 3ODS installation – TestODS installation – Prod	0% (April 2012)0% (June 2012)
Banner Luminis Platform 5 Implementation	Phase 1Project schedule developmentProject team creation	100%100% (March 2012)
	Phase 2Luminis implementation kickoff
	Luminis Tech implementation planning	100% (March 2012)100% (March 2012)
	Phase 3Luminis installation – Test
	Luminis installation – Prod	0% (April 2012)0% (May 2012)
	Phase 4Luminis Functional Implementation	0% (Mar. – Aug. 2012)
Laptop Deployment	Faculty Laptop Deployment	142 laptops distributed to faculty
Laptop Deployment	Residence Hall Laptop Deployment	49 laptops distributed to each residence hall for student checkout (7 laptops per 7 residence halls)
Computer Labs Upgraded	School of Business LabEducation LabBehavioral and Social Science LabAthletics LabStudent Center LabAcademics With Attitude Lab	41 desktops27 desktops10 desktops10 desktops50 desktops18 desktops
Upgrade and Creation of Smart Classrooms	Currently upgrading 7 classrooms in the School of Business. Upgrade includes classroom furniture.	Estimated completion time: 90 days
	Upgrading 13 classrooms in Carver Hall	Project completion by early summer
	Upgrading 4 classrooms in Exum Center	Project completion by mid-summer

===== PAGE 16 ===== # Kentucky State University Auxiliary Enterprise Report July 2011 – March 2012 As of March 31, 2012, Auxiliary Enterprise recorded the following revenues:

	Prior Year YTD	Current Year YTD	Variance
Food Services	3,182,000	3,004,000	(178,000)
Housing	3,259,000	3,271,000	(12,000)
Bookstore	88,000	88,000	-
Facility Usage	14,000	44,000	30,000
Laundry	26,000	26,000	-
Vending	1,000	2,000	-

Food service and housing revenues are down due to lower student count in housing. Housing occupancy as of March 2012 was 85 percent with 879 students compared to 899 students in March 2011.

Food & Housing Revenues

===== PAGE 17 =====

Capital Construction Project Report April 27, 2012

	PROJECT	Goal	Assigned Date	STATUS	Comments
1	Entrance Gatehouse	Controlled Access to Campus	09/01/10		Project under construction - Oct. 12 completion
	Anticipated Funding Source
	$220,000 Auxiliary Services
	$200,000 Capital Planning
	$140,000 Title III Infrastructure, Electronic Security
2	Repair Concrete Steps & Sidewalks	Safe pedestrian paths	08/01/10		Complete
	$150,000 Capital Planning				Complete
3	Erosion Control at Motor Pool	Control of water runoff	07/01/10		Complete
	$15,000 Capital Planning				Complete
4	Flood Damage Repair at Old Federal Building	Restore building	05/05/10		Complete
5	Extend Storm Pipe at Ash Pit	Route storm water around ash pit	05/27/10		Complete
	$5,000 Maintenance Operations				Complete
6	Repair Roof of Old Federal Building	Stop damage from leaking roof	07/01/10		Complete
	$13,000 Capital Planning				Complete
7	Access Control for Governmental Services Center	Install Blackboard electronic card readers	05/01/10		Complete
	$20,000 GSC Maintenance Service				Complete
8	Mills Lane Farm - Center for Sustainable Farms & Families	New Facility	03/27/09		Complete
	$4,800,000 USDA				Complete
9	Aquaculture Production Technology Laboratory	New Facility	08/15/10		Complete

===== PAGE 18 =====

	PROJECT	Goal	Assigned Date	STATUS	Comments
	$1,700,000 CPE
	$700,000 Federal Funding
10	Rosenwald Center for Families & Children	New Facility	06/01/10		Construction complete except fence. Holding on funding.
	$2,400,000
11	Renovate Old Federal Building	Complete building renovation	09/01/09		Construction proceeding. August completion date
	$1,000,000 federal ARRA funds through National Parks Service
12	Replace Roof Sections of Bradford Hall	New roof on remaining old roof sections	09/01/10	COMP	Complete
	$270,000 CPE Maintenance Funds
13	Police Department - Electrical Upgrade / Electronic Infrastructure for Dispatch	Moving Police Dept. to Old Rosenwald	08/01/10	COMP	Complete
	$185,500 Title III
14	Hathaway Hall Repair - Chair Desks	Functional chairs	06/05/10	COMP	Complete
	$62,500 State funds
15	Re-roof Atwood Research	Non-leaking roof	02/01/11	COMP	Complete
16	Cheaney Plaza	Fundraising bricks and plaques	08/01/10		Seeking funding
	$500,000 Private Donations
17	Feasibility of Constructing a Centralized Mail Hub in Student Center Basement	Streamline mail pickup	08/01/10		Under Design
	Auxiliary Services

===== PAGE 19 =====

	PROJECT	Goal	Assigned Date	STATUS	Comments
18	Umbrellas for Student Center Tables	Provide shade for tables on patio	09/01/10		Complete
	$150 Capital Planning
19	Campus Benches	Replace old benches around campus	08/01/10		Complete
	$10,000 Capital Planning
20	New Seating for Bradford Hall Large Auditorium	New seating in Large Auditorium	08/01/10		Complete
	$120,000 Capital Planning
21	Scoreboard at Football Stadium	New Scoreboard	02/01/11		Complete
22	(IT) Intercom System at Football Stadium	New intercom system at Alumni Stadium	02/01/11
23	Parking Lot Expansion	More parking for students/faculty/staff	01/01/11		One lot complete Dec. 2011. Remaining lots under design or advanced for bidding
	$83,000 Capital Planning
24	Russell Court interior Renovations	Modernized apartments	06/01/10		Schematic meeting scheduled for January 2012
	$1,000,000 Auxiliary Services
25	Privatized Housing RFP	New Student Housing	11/01/09		Firm selection
	$20M Private Developer/ KSU Foundation				approval from EVP
26	2010 HUD HBCU Grant	Receive grant to buy property in Hill Top Neighborhood	02/01/11		KSU was not awarded grant
27	Submission of Biennium Six-Year Capital Plan	Complete capital plan	01/01/11		Complete

===== PAGE 20 =====

	PROJECT	Goal	Assigned Date	STATUS	Comments
28	Re-design Presidents Suite	Improve safety and enlarge conference room	01/01/11		Design complete May 2011. Awaiting funding
	$19,000 Capital Planning
29	Chandler Hall Bathroom Renovation		12/01/10		Complete
	$125,0000 Auxiliary Services
30	Construct New Building and Facilities to Service University Needs		07/01/10		One project under construction
31	Determine Renovations of Buildings for New Functions and Upgrades of Building Systems		07/01/10		One renovation project has been established for construction in summer and fall 2012
32	Identify and Address Deferred Maintenance Issues		07/01/10		Six new deferred maintenance projects identified and in process.
33	Initiate an Annual Deferred Maintenance Plan		07/01/10		Annual deferred maintenance plan is in operation.
34	Construct New Student Residential Housing		07/01/10		The university has put a hold on constructing new residential housing
35	ADA Access for Hillcrest		07/01/11		Funding hold
36	Tile Bathrooms at Stadium		08/15/11		Complete
37	Repair Concrete Sidewalks at East Wood Garden Apartments		07/15/11
38	Alumni Stadium Office Roof Replacement 2012 $306,000	306,000	07/15/12

===== PAGE 21 =====

	PROJECT	Goal	Assigned Date	STATUS	Comments
39	Jordan Building and Warehouse Roof Replacement 2012 $229,500	229,500	05/01/12
40	Carroll ASB Roof Replacement Phase I 2012 $349,000	349,000	05/01/12
41	Cooperative Extension Building 2012 $196,290	196,290	05/01/12
42	Old Federal Building additional funding $60,000	60,000	05/01/12	COMP	Complete
43	Betty White Additional Parking	99,980	05/01/12		Redesign complete
44	Brick Retaining Wall and Fence Betty White Parking	106,452	04/15/12		Redesign complete
45	McCullin Additional Parking	57,245	05/01/12
46	J Parking Lot Paving	67,000	05/01/12		Construction under way
47	Fill and Retaining Wall for J Lot by McCullin	65,000	05/01/12		Construction under way
48	Additional Funds for Bradford Hall Seating	9,567	05/01/12	COMP	Complete

===== PAGE 22 ===== ## KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND

To: Board of Regents External Relations and Development Committee	Date: April 27, 2012
From: Hinfred McDuffie Executive Vice President for Administration
Subject: Communications Report
Reason for Consideration: Informational	Enclosures: Yes

Background: N/A Recommendation: Informational

Initiator:	Hinfred McDuffie Executive Vice President for Administration
Board Action Date:	April 27, 2012
Effective Date:	April 27, 2012

===== PAGE 23 =====

NEWSPAPER COVERAGE IN KENTUCKY

TELEVISION COVERAGE IN KENTUCKY

Number of Stories	-	147 stories
Run Time	-	2 hours, 11 minutes, 14 seconds
Ad Equivalency	-	$72,610	Publicity Value	-	$217,817
Nielsen Audience	-	5,109,862

===== PAGE 24 ===== # PUBLICATIONS AND MARKETING ## Publications (artwork and printed materials) Development/Alumni Printed Materials – Materials produced for 10 campaigns - Printed materials produced for university events – 118 Communication pieces – 44 o Onward and Upward - 1 o President's Report to the Board - 3 o President's Report to the Council on Postsecondary Education (CPE) - 1 o Good Newsletter for CPE - 3 o From the President's Desk - 1 o Hoofbeats - 1 o Program/Departmental Newsletters & Brochures – 34 - Marketing and advertisement pieces produced – 106 - Designs for general university operations – 47 - Business cards produced – 107 Land Grant, community and campus community projects and events (supported by design work and support materials) – 26 Billboard Displays – 9 months, four locations in Frankfort, Ky. Airport Displays – Lexington and Louisville airports Television Advertisements – Advertised in the Frankfort, Lexington and Louisville markets ## ELECTRONIC COMMUNICATIONS Electronic message board postings – 108 messages: 90 KSU messages 18 community messages ===== PAGE 25 ===== ## KENTUCKY STATE UNIVERSITY BOARD OF REGENTS AGENDA ITEM BACKGROUND

To: Board of Regents External Relations and Development Committee	Date: April 27, 2012
From: Hinfred McDuffie Executive Vice President for Administration
Subject: Endowment Investment Policy
Reason for Consideration:	Informational	Enclosures: Yes

Background: N/A Recommendation: Informational

Initiator:	Hinfred McDuffie Executive Vice President for Administration
Board Action Date:	April 27, 2012
Effective Date:	April 27, 2012

===== PAGE 26 ===== # Endowment Investment Policy Kentucky State University This Statement of Investment Policy is issued by the Board of Regents of Kentucky State University in conjunction with the endowment holdings of Kentucky State University. Pursuant to KRS 164A.560, the Board of Regents of Kentucky State University elects to receive, deposit, collect, retain, invest, disburse and account for funds received as contributions to the endowment and shall manage the gifts and donations in accordance with KRS 164A.550 to KRS 164A.630. ### I. The Board of Regents Kentucky State University is one of eight public higher education institutions in the Commonwealth of Kentucky and is governed by appropriate Kentucky revised Statutes and by the Board of Regents. The Board consists of 11 Regents, eight of whom are appointed by the Governor of the Commonwealth. One Regent each is elected by the University faculty, staff and students. ### Ⅱ. The University President The Kentucky State University President, by virtue of his/her office, has the responsibility for the management of the University's endowment holdings and to report to the Board of Regents at each quarterly Board meeting on the status of these holdings. ### Ⅲ. Investment Philosophy The Board of Regents of Kentucky State University recognizes its fiduciary duty not only to invest the University's endowment holdings in formal compliance with the "Prudent Man Rule," but also manage those funds in continued recognition of the basic long-term nature of the University. The Board of Regents interprets this to mean, in addition to the specific guidelines and restrictions set forth in this document, that the assets of the University shall be actively managed, that is, investment decisions regarding the particular securities to be purchased or sold shall be the result of the conscious exercise of discretion. Further, the Board of Regents recognizes that, commensurate with its overall objective of maximizing long-range return while maintaining a high standard of portfolio quality and consistency of return, it is necessary that proper diversification of assets be maintained both among and within the classes of securities held. Within this context of active management and the necessity of adherence to proper diversification, the Board of Regents relies upon appropriate professional advice. ===== PAGE 27 ===== ### IV. Investment Objectives The Board of Regents realizes that prudent investment management is a duty. In fulfillment of this duty, the Board of Regents recognizes that long-term objectives are most important, but it is also necessary that shorter term benchmarks be used to assess the periodic performance of the investment program. The University anticipates annual spending of five percent (5%) of the average market value for the past three years, the amount of which shall be determined in January of each year and is fully described in its Endowment Spending Policy, which is fully incorporated by reference herein. Under no circumstances shall the amount allocated to endowed professorships be less than the amount allocated in the prior year. ### V. Asset Allocation Guidelines The University President will allocate the assets within the classes of investments that he/she considers to be appropriate. The Board of Regents believes that it is prudent to diversify endowment investments so as to minimize the risks of large losses and has established the following asset allocation ranges based upon the University's participation demographics, anticipated cash flow requirements and the expected returns of the capital markets. The ranges are guidelines that may be interpreted as a general statement of the Board of Regents' position regarding investment risk.

Asset Class	Allowable Range*
A. Equity Investments	35 - 55%
B. Fixed Income Investments	25 - 45%
C. Cash Equivalents	0 - 25%
D. Alternatives	0 - 20%
E. Real Estate	0 - 10%

##*Based on market value As a general policy, the Board, in keeping with its responsibility as Trustee and wherever consistent with its fiduciary responsibility, encourages the investment of the University's endowment assets in the securities of corporations that provide a positive contribution to the economy of the Commonwealth of Kentucky. However, where any security is not a prohibited investment under Kentucky state statute and where a security is on the approved buy list, discretion will be granted to the appointed investment ===== PAGE 28 ===== managers in the selection of such securities and timing of transactions consistent with the following guidelines and restrictions: ### A. Equity Investments (Stocks) The benchmark for Equity Investments shall be MSCI World Index. Investments may be made in common stock, securities convertible into common stock and in convertible preferred stock of publicly traded corporations. With the approval of the University President, options may be written against equity positions in the University's endowment holding account. ### B. Fixed Income Investments The benchmark for Fixed Income Investments shall be Barclays Aggregate Index. Investments may be made in the various classes of fixed income instruments as follows: Corporate Bonds. Publicly traded bonds are to be selected and managed so as to assure an appropriate balance in quality and maturities consistent with current market and economic conditions. Although active bond management is encouraged, excessive emphasis on short-term trading is not considered appropriate. Nonconvertible bonds may be selected from among those rated within the top three categories of the recognized bond rating services. Private or direct placement bonds may be purchased only upon specific approval of each issue by the University President. Government and Agency Bonds. Investment may be made in any U.S. Government issued debt instrument with an initial maturity of over one year and in any debt instrument issued by agencies of the U.S. Government with an initial maturity of over one year and which are guaranteed by the U.S. Government. ### C. Cash Equivalent Securities Selection of particular short-term instruments, whether viewed as liquidity reserves or as alternative investment vehicles, should be determined primarily by the safety and liquidity of the investment and only secondarily by the available yield. The following short-term investment vehicles, with the exception of commercial paper, which requires specific purchase approval by the University President, are considered acceptable: ===== PAGE 29 ===== Repurchase Agreements – Repurchase agreements that are collateralized by the United States Government issues. U.S. Government Issues – All obligations of the U.S. Government and its agencies. Certificates of Deposit – Banks domiciled in the Commonwealth of Kentucky. If the dollar amount of certificates of deposit and/or cash equivalent securities exceed the FDIC insurance limit, the bank must pledge securities in an amount equal to that amount not covered by FDIC insurance. ### D. Alternatives Alternatives will be fully liquid through the use of mutual funds and ETFs. Alternatives will include Precious Metals, Commodities, Currencies and Non-Directional Strategies (low correlation to traditional stock and bond portfolios). ### E. Real Estate Real Estate Investment Trusts (REITs) will be invested in a liquid, high-quality diversified portfolio of Real Estate Investment Trust companies. No raw land will be purchased for portfolio. ### VI. Standards of Measurement The following represent the standards of measurement to be used as guidelines for the various classes of investments of Kentucky State University endowment holdings. They are to be computed and expressed quarterly on a time-weighted total return basis: Equity Investments – Exceed the return on the MSCI World Index Fixed Income (Corporate, Government and Agency Funds) – Exceed the return on the Barclays Aggregate Index Cash Equivalents – Exceed the rate on 90-day treasury bills ### VII. Investments Performance Review Procedures Kentucky State University Endowment Spending Policy Amended as Approved by the Board of Regents January 27, 2012 ===== PAGE 30 ===== On a timely basis, but not less frequently than quarterly, the Board of Regents will review the performance of the University's endowment holdings portfolio for determination of compliance with this Statement of Investment Policy. ### VIII. Review The Board of Regents will annually review the University's Investment Policy to make any adjustments that may be necessary.