The UNM Foundation has stabilized the funding the University receives annually, despite trouble from the recession, say representatives of the school’s independent nonprofit financial arm.
The University received more than $90 million in gifts over the 2008-09 fiscal year, plus $15.2 million from the combined endowment of the University and the Foundation. While the endowment suffered in the economic downturn, it has been able to remain in the top quartile of its peer institutions, said Foundation President John Stropp.
“Traditionally, we have been in the top quartile with these results for institutions of our size and the current return,” he said. “For the year (that) just ended, we were down 20.5 percent, but on a relative basis it beat the market, which was down 35 percent to 40 percent.”
Foundation spokeswoman Jill Zack said the endowment return as calculated from January through August of this year was about 9 percent.
Fundraising efforts have also felt the crunch.
“Our development officers have had to work hard. They’ve had to knock on 10 times as many doors as they have in the past,” Zack said.
Stropp said the funds raised this year were $5 million shy of last year’s original goal.
“We chose that $95 million goal just after the $85.5 million euphoria, which is significantly over the previous FY 06 figure of $72.5 million,” he said. “When we came out at $90 million plus a little change, we were very proud, considering the economy in general and the state economy, that everyone responded as they did.”
Stropp said that this year’s goal is $90 million.
“We think it’s going to be just as hard if not harder to raise $90 million in this environment coming up,” he said. “I think this is the consensus around the country, that everybody is going to have to work harder just to hold their own.”
Zack said the UNM Foundation works with 35 development officers in colleges and departments across campus. The officers collaborate with deans to compile lists of their needs. The lists are presented to donors so they can see how their gifts will benefit students and faculty.
“The University is sort of a mecca for excitement, for donors to come in and make an impact with whatever interest they have,” she said. “There is increased student enrollment right now and that just increases our demands. As long as we have development officers to make a case, it’s an easy case to make.”
One of the primary programs funded by the Foundation is the UNM Presidential Scholarship Program. This program provides scholarships to hundreds of students at UNM. Scholarship supervisor Bill Bloom said that the Foundation’s stability has allowed the University to increase the number of scholarships offered to incoming freshmen.
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“It ensures that the scholarships are at or exceed prior numbers,” Bloom said. “We’ve seen an increase in enrollment and we haven’t had to decrease — based on economic conditions — the number of scholarships offered. We’ve been able to maintain that based on their being able to maintain their numbers.”
Bloom said the scholarship office was able to offer 120 presidential scholarships to incoming freshmen this year, but the funds raised this year won’t affect the University for a few years.
“These record-setting numbers and goals that they have met and exceeded — we don’t really see the bump on that for several funding cycles,” Bloom said.
Stropp said the Foundation has been able to counter the recession-driven economy by using a payout system that distributes funding over a period of three years and 12 quarters. This helps counteract market fluctuations, he said.
“This payout out of the endowment is $15 million this year. It was $14 million last year,” he said “We use a trailing 12-quarter average. The reason you use a trailing average is to smooth out some of the short turns and ups and downs of the market.”
Stropp said the recession has caused many institutions the size of UNM to lengthen their payout period. The Foundation constantly reevaluates the averages in order to give the University a stable increase each year. Paying out on a trailing average is a way that institutions like the Foundation secure their own budget, he said.
“Some institutions use a moving 12-quarter average and many are moving to a 5-year or 20-quarter average to smooth this thing out even more and so you catch the better quarters over the long term on either side,” Stropp said. “We’re looking at all the opportunities that are available to us.”
Zack said the Foundation is paying careful attention to how their endowments and gifts are being allocated and invested. Preparation for a public campaign for more
donations next year depends on the stability of this year’s success.
“We are actively watching our investments,” Zack said. “It’s a two-fold mission — one, to fundraise, and two, to make sure we are investing properly and administering properly. We actually had a little return versus our peers, and we’re doing better, but that’s because we do actively watch our portfolio. We consider that a high responsibilty to the University. You can’t be passive with that stuff.”
