Large student groups turn to endowments for sustainability
Jefferson Literary and Debating Society, IRO, and Honor benefit from funds
To say funding issues affect every organization on Grounds is to state the obvious, but how groups, specifically large ones with consistently high expenditures, approach the issue can vary widely.
Some groups like Student Council and the International Relations Organization can count on consistent streams of income every year from student activity fees and conference attendance fees, respectively. Others must rely on grants or fundraising to survive and achieve their goals.
Endowments are another effective option. Held by several prominent student groups, including the Jefferson Literary and Debating Society and the Honor Committee, endowments can serve as multi-million dollar financial reserves.
What is an endowment?
Though endowments can add up to immense sums, frequently, not all of the money is available to the group. Typically, the initial money fundraised or donated, called the principal, is invested and its use is restricted to that purpose. The money made by the investments, called returns, are available to be spent or reinvested.
Most student group endowments are organized through Alumni Hall and administered by the University of Virginia Investment Management Company, which handles all investments and endowments of the entire University.
The 2013 UVIMCO Annual Report lists the long-term endowment of the University at nearly $6 billion with a 13.4 percent return on investment in 2013.
Using an endowment
Groups like the Jefferson Society use endowments to supplement other sources of income.
“Endowments are a great system
for us, [giving] us reliable funding.
“Without it, members dues
would be three or four times
what they are right now.” — McCulloch Cline
The Society passes a semesterly budget for putting on events and other expenses.
“Approximately a third of that [money] is covered by membership dues and the rest of it comes from endowments,” said third-year College student McCulloch Cline, Jefferson Literary and Debating Society president. “The Jefferson Society doesn’t have one specific endowment, but rather has many that are each dedicated to a single purpose, like the Jefferson Society’s distinguished speaker series and their Lawn Room 7 scholarship.”
Most of the Society’s endowments have been around for decades, Cline said, but some are newer.
“Endowments are a great system for us, [giving] us reliable funding,” Cline said. “Without it, members dues would be three or four times what they are right now.”
The Jefferson Society declined to release the financial details of their endowments.
The IRO also has an endowment; however, they do not consistently draw from it because the fees from the two annual Model United Nations conferences sustain the CIO, according to Batten graduate student Elsa Schultze, IRO treasurer.
“From the conference fees, we are a self-sustaining organization,” Schultze said. “I don’t think we’ve taken StudCo funding in the last four years.”
Schultze said that the IRO’s annual operating budget is between $40,000 and $50,000. This money goes toward putting on the two conferences, bringing in speakers from Washington, D.C., hosting social events for members, and publishing the Wilson Journal of International Affairs, an undergraduate research journal, two times per year.
“The IRO has an endowment held at Alumni Hall, but the conferences generate enough money that we don’t have to tap into the endowment,” Schultze said. “Occasionally, we will have to use some money from the endowment to make up revenue, like when Hurricane Sandy hit and our fall conference was affected, but we do not use it regularly.”
Downsides of an endowment
An endowment’s funds often have numerous restrictions, which can be hard to navigate when turnover in student organizations is so frequent.
“You can’t rely on institutional memory to tell you about the finances of a club,” Schultze said. “You have to actually go and talk to the people at Alumni Hall yourself and find out what kind of an account it is.”
Cline said the restrictions placed on an endowment can make it difficult to access the money.
“[There are] advantages and disadvantages to using the endowments — because endowments are restricted to particular purposes, it is harder to shift purposes,” Cline said.
The Honor Committee’s endowment
campaign started with $2,500.
It now has $2.9 million.
Not all organizations on Grounds have endowments. The University Judiciary Committee, for example, does not have an endowment, but instead receives a yearly budget from the state.
Because UJC serves a function that would normally be served by an administrator, it is considered an agency organization, said UJC Chair Timothy Kimble, a third-year College student.
Despite not having an endowment, Kimble said that there is plenty of money for UJC to do what it needs to do. The organization receives around $15,000 per year.
“Our largest expenditures are maintaining our online systems and copying and printing for trials,” Kimble said. “Because the organization receives money from the state, members have a larger responsibility to closely manage our money and make sure that the money goes toward our function. Obviously copying and printing and maintaining the online system is a legitimate use for that money.”
Other groups receive funding from multiple sources. The Honor Committee receives its funding from two sources: an endowment through Alumni Hall and funding from the division of student affairs. Funding is not equally split, however, and the Honor endowment provides the majority of the needed funds, said Honor Committee Chair Nicholas Hine, a third-year College student.
“All of the Honor Committee’s funds used to come from the Student Affairs VPSA budget,” Hine said. “But Alumni Hall decided to release some of the pressure from the Student Affairs budget, so they launched a campaign in the early 2000s to develop an endowment.”
The endowment campaign began with a donation of $2,500 and has grown around 2.9 million dollars today.
Because the Honor Committee does not manage its endowment, they have to prepare a proposed budget for approval. Every year, the newly elected Honor Chair meets with Alumni Hall representatives and gives a presentation on outlining spending requests and justifications. This year, Hine requested around $160,000 out of the endowment. This budget includes funding for outreach and education materials, guest speakers, and the Legal Advisor’s salary.
“The budget stays relatively consistent each year,” Hine said. “This year there was an increase because the Legal Advisor’s salary went up, we are upgrading the online system, and we are prioritizing education and outreach this year.”
Hine said the correspondents from Alumni Hall have been helpful, cooperative, and easy to work with.