The UF Foundation will release an extra $2.4 million in endowment funds this March to help UF cope with a budget crisis.
Earlier this month, the foundation's finance committee approved increasing the spending bases of all endowment funds that were received starting Jan. 1.
The "spending base" is a percentage of an endowment before it's invested, explained Leslie Bram, associate vice president of the foundation that oversees UF fundraising.
The spending bases for some of UF's existing endowments formerly hovered at about 85 percent of the original gift value, Bram said.
The committee's action increases the spendable bases of those existing endowments by about 5 percent, she said.
Several U.S. congressmen have clamored this year for universities to spend more of their endowments, focusing on increasing available financial aid.
Bram said the increase will generate about $2.4 million in spendable income, but that money will be spread across the university depending on which endowment it comes from.
Every UF endowment is restricted by the donor's wishes, she said. She said most of the funds are designated for faculty positions and research, while 26 percent of the funds provide for student financial aid.
Bram said the committee made the change because UF was experiencing profitable investment returns on its endowments, and a university-wide budget crisis created a strong need for more money.
After cutting $34 million from its budget last semester, UF will have to trim an extra $16 million this semester, bringing the total budget cuts for this fiscal year to about $50 million.
Steve Orlando, UF spokesman, said UF still isn't sure how it's going to make the cuts, which stem from state revenue shortfalls.
Although the $2.4 million is earmarked for certain areas, Bram said the extra money would help UF cope with budget cuts because it would free up general university dollars for other expenses.
Money that would otherwise fund the areas now covered by endowments could be put toward other purposes or cut from the budget, she said.
"It's more like swapping dollars out," she said. "It will definitely help. There's no question." Bram said it's not uncommon for the foundation to approve a special increase like this. As the market fluctuates, the endowment spending base changes, and every so often, the finance committee steps in to return the spending base to an appropriate level, she said.
At the same meeting, the finance committee also approved a decrease in the administrative fee for endowment funds.
Bram said this change was enacted after conversations with all UF deans. The fee change impacts the foundation more than it does the rest of the university because the foundation is funded through these payments, she said.
