University foundations would invest endowment money in innovation funds

Each affiliated foundation would have to invest at least 1% of its endowment assets in one or more innovation funds. The requirement covers foundations affiliated with Iowa’s three regents institutions and applies to their unrestricted pooled, long-term investment assets, including foundation-managed endowments and quasi-endowments. A foundation board may grant a one-year waiver if there is not enough fund capacity or market conditions would materially harm prudent investing. To seek a waiver, the foundation must send the board of regents a written explanation and a plan to comply. The 1% target must be met by July 1, 2027, and investments must be increased if the share later falls below that level. The act would take effect December 31, 2026.

Each institution would send the state board of regents an annual report on its endowment assets and innovation fund investments. The report must state the institution’s total endowment assets and the amount and share invested in innovation funds. The state board must submit the combined annual report by December 1 each year.

The economic development authority would keep a public list of innovation funds eligible for these investments and notify each foundation when the list changes. The list covers innovation funds eligible for investment by foundations under this chapter. No specific schedule is stated; notice is required when the list changes.