Penn State sets aside first payment of NCAA fine
UNIVERSITY PARK, Pa. — Today (Dec. 20), at the NCAA’s request, Penn State set aside the first $12 million installment of the $60 million fine imposed by the NCAA into a money market account. The deposit into the account will allow sufficient time for the NCAA’s Child Sexual Abuse Endowment Task Force to develop policy recommendations that will govern the structure and operational philosophies of the endowment to be created related to the consent decree. The Child Sexual Abuse Endowment Task Force, chaired by University of California-Riverside Chancellor Tim White, will choose a third-party administrator sometime this spring, which will be responsible for the long-term management of the endowment, including the awarding of dollars to programs through the life of the endowment.
This first payment was made by the Athletics Department through an internal loan from the University’s reserves and carries an interest rate of 4 percent for 30 years. Interest rates and loan durations for the future payments to the endowment will not be determined until each payment is made year-by-year, and will be based on interest rates in effect at the time of disbursement and other conditions.
The actual transfer of funds from the University to the endowment is expected to occur in the first half of 2013.
The task force will decide how the endowment is structured, develop philosophies for allocation of funds and create policies for investment and distribution of benefits. The task force also will consider reporting and accountability standards.
Penn State has heard from a number of organizations and survivors of sexual abuse who have expressed their support for the positive impact this endowment will have, and ideas on how the funds can be used to benefit children in Pennsylvania and across the country. At least 25 percent of the annual disbursements will be used solely to benefit qualifying organizations in Pennsylvania, and in-state organizations will receive the first round of funding released by the endowment.