News
Spend endowment revenue, units advised
-
Print -
Comments
-
“One of the most important stewardship steps in an endowment is to spend that endowment every year.”
Faculty members and departments can help UB maintain good relationships with existing donors and cultivate new donors by making sure that revenue from endowments is spent on an annual basis, the executive director of the UB Foundation told the Faculty Senate Executive Committee at its Wednesday meeting.
“An endowment is designed to make spendable dollars available every year,” Edward Schneider said. "When you’re not spending it every year, you’re really under-utilizing the endowment. So the message I’m trying to send to the university community: Don’t be shy about spending what’s been appropriated every year.
“One of the most important stewardship steps in an endowment is to spend that endowment every year,” he said. “Don’t allow it to accumulate. There’s less value in seeing it accumulate than there is in seeing it spent every year in a prudent sort of way consistent with donors’ intent.”
Schneider explained that an endowment fund is a pool of money that the foundation invests with the goal of maintaining the value of the principal balance over time. Each year, extra dollars generated by investments go to causes that the fund is meant to support.
By using annual allocations from an endowment in accordance with donors’ wishes, members of the UB community demonstrate that they are good stewards of existing gifts, Schneider said. Responsible management, in turn, can encourage more people to give money to the university.
Among higher education institutions in the United States, UB ranked 136th in the size of its endowment in the 2008 fiscal year, with assets of $535.6 million, according to statistics Schneider presented. By comparison, Harvard University, the top-ranked school, had $36.6 billion, and Stony Brook University had $113.2 million.
Due to turmoil in the financial markets, the value of UB’s endowment dropped to $410.4 million at the end of the 2009 fiscal year, Schneider said.
The performance of UB’s investments is “right in the ballpark with the industry average,” he said.
Also at Wednesday’s meeting, President John B. Simpson applauded Gov. David A. Paterson’s decision to include in his executive budget measures to give SUNY and UB more financial flexibility in areas ranging from tuition policy to land use.
The governor’s proposal authorizes the SUNY Board of Trustees to charge differential tuition for programs and campuses within the system and implement a tuition policy that will give universities discretion to raise tuition up to an annual cap of 2 1/2 times the five-year rolling average of the Higher Education Price Index, an inflation index for costs associated with higher education.
These and other advances, such as granting SUNY the authority to participate in public-private partnerships to develop land in accordance with SUNY’s mission, mirror legislative reforms that UB, along with members of the Western New York delegation to the state Legislature, have been championing for more than a year.
Simpson pointed out that in contrast with the UB 2020 Flexibility and Economic Growth Act—which was passed by the Senate but has stalled in the Assembly—Paterson’s budget calls for changes that apply to all of SUNY, not just to UB. That broad reach will substantially increase the chances that the reforms will pass intact, Simpson said, adding that if they do, one of the university’s first priorities will be to develop a sound, rational and easy-to-understand tuition policy.
The governor’s proposal—called the Public Higher Education Empowerment and Innovation Act—would go a long way toward enabling UB to realize goals outlined in UB 2020, the school’s long-range strategic plan. Despite the good news, however, Simpson noted that with more budget cuts looming, new financial flexibility will not be a “panacea” for problems the university is facing.
Reader Comments