Three years after Madison House and Student Council made an arrangement to phase out the service organization's Student Activity Fund allocation, Madison House officials say they have struggled to find outside sources of financial support.
In order to move toward self-sufficiency, Madison House agreed to have its Council appropriation cut by 5 percent a year from 1999 to 2008. After the 2008-2009 academic year, Madison House no longer will receive any money from the Student Activities Fund.
Three years ago, Madison House had an endowment of $800,000 in an account with the University Fund, said Michal Yarborough, co-chair of the Madison House board of directors. In the past three years, they only have received one donation of $114,000 from BAMA Works, a charitable organization funded by the Dave Matthews Band.
"We've developed an understanding with Student Council that we will have to do a lot more fundraising than we're used to," Yarborough said. "Right now, BAMA Works has been our only donor."
Madison House cannot directly access capital in its University Fund endowment, Yarborough said. The endowment is invested and its interest is made available for the organization to use at its discretion.
"We used to earn $50,000 from the endowment which was a 5.5 percent return," Yarborough said. "That money went toward general operating costs."
Madison House has an annual budget of $230,000. Comparable institutions at Stanford, Harvard and Yale all have budgets that are over twice as large, Yarborough said.
"We are very conservative on how we spend our money," she said.
Over the next six years, Madison House needs to raise between $1.5 and $2 million for its endowment in order to make up for lost revenue, Yarborough estimated.
Currently, Madison House annually receives $60,000-$70,000 from private individuals, faculty, alumni and special events. Additionally, the Office of the Vice President for Student Affairs provides $13,500 a year in funding.
When Madison House agreed to eventually end Council financial support, it was understood that the Office of the President and the Office of Development would cover some of the lost income, Yarborough said.
"Verbally, they are very supportive, but we have not received any monetary gifts or donations," she said.
Council Commerce School Rep. Mark Straub has worked with Madison House directors to address their concerns.
"I'd like to see Madison House be funded by Student Council beyond the current plan," he said.
The existing compromise was formulated at a time when donors were relatively abundant and the economy was booming, Straub said.
"The current plan needs to be reevaluated, considering the current economic state that we find ourselves in and considering that it was made based on incomplete facts and without foresight," he said.
Madison House's ability to find donors will be critical once Council money runs dry, Yarborough said.
"Without additional funding, it's going to be harder and harder for Madison House to remain as active as it currently is," she said. "It's a definite struggle."
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