UF announced Wednesday that it will be forced to reduce endowment fund spending by $1.5 to $2 million from April to June due to investment losses.
Endowment investments dropped about 19 percent from July 1 to Dec. 31, according to an e-mail sent to administrators. As a result, UF must reduce its endowment spending bases by about 19 percent to comply with its investment policy.
This is the first time UF has had to reduce its spending bases since the policy was established in 2004, said Leslie Bram, associate vice president of the University of Florida Foundation, which oversees donations to UF.
UF would have reduced them following investment losses of 8.3 percent from July to September, but UF President Bernie Machen asked the foundation to go against its policy because of the bleak budget situation.
A spending base is the percentage of a donation that can be drawn from for spending. If $100 is donated, a spending base of 90 percent would mean $90 is the spending base. From this $90, 4 percent is spent each year on the donor's cause of choice, and 1 percent is spent on administrative costs, according to a UF Foundation brochure.
The endowment's value shrunk from $1.25 billion in July to $1.01 billion in November, said foundation spokesman Chris Brazda.
Despite the decrease, UF raked in $64.9 million in donations in December, the highest monthly total in UF history, said Paul Robell, UF's vice president for development and alumni affairs.
The previous record, $47 million, was set in December of 2007.
December is typically the month with the highest total, partly because it is the last month to earn tax write-offs for donations before the next tax period, Brazda said.
In comparison, $9.8 million was donated in October and $4.1 million in November.
With the addition of December's numbers, UF's Florida Tomorrow capital campaign, which started in July 2005 and seeks to raise $1.5 billion in donations by October 2012, has collected over $837 million.
With UF approaching the halfway point in the campaign, it is already almost $90 million ahead of the halfway mark in funds.
Even so, UF is missing out on millions of dollars because the state continues to withhold matching funds for donations.
To date, the state has yet to dole out matching payments totaling $28.4 million for Courtelis fund donations, pegged for construction projects, and $61.9 million for endowment donations, Robell said.
