U of M endowment fund recovering

The University of Manitoba endowment fund is steadily recovering from the effects of economic recession.

Due to the collapse of investment markets, in 2008 the University Investment Trust (UIT) fund lost approximately 20 per cent of its value.

However, in 2009 the fund recovered by 12.8 per cent. As of Dec. 31 2009, it stood at $345 million.
“We’re not back to where we were prior the collapse of the markets but we are recovering,” said Debbie McCallum, vice-president (administration) at the University of Manitoba.

Karen Woloschuk, director of Advancement Services, explained that universities across North America saw a decrease in gifts of publicly held securities in late 2008 and 2009, a direct result of the economic recession.

“In the fall of 2009, gifts of securities increased again which was a sign that the markets and economy were recovering,” said Woloschuck.

This meant a four per cent cut to the spending allocations from the UIT that are made available to faculties and schools, which are usually 4.5 per cent of the average market value of the UIT over the past three years. McCallum explained that, as the investment markets recover, the spending allocation that is made available will also recover.

“It hasn’t been a huge impact. Four per cent each year isn’t a huge impact, compared to what’s happened at some universities,” said McCallum.

She pointed out that the University of Toronto completely suspended their allocations, making no endowment money available to their faculties.

“We felt it was really important. People depend upon this money, students depend upon this money, they fund people, like professors who hold chairs,” said McCallum.

“We felt it would be too much of a hardship to suspend the allocations, although there is a little less money available this year.”

University of Toronto spokesperson April Kemick confirmed that the U of T suspended allocations from the endowment fund due to the effects of the economic recession in 2009, but payments will resume in the budget cycle in 2020.

“The faculties were tasked with finding the money elsewhere to fund various endowment activities,” said Laurie Stevens, director of communications at the University of Toronto.

In comparison, the University of Toronto endowment fund lost 29 per cent of its market value in 2008, but stands at $1.286 billion as of April 30, 2009.

The endowment fund is comprised of money from donors who specify how they want their funds to be used within the university.

These funds are invested with professional investment managers. The earnings on those investments are then used to support a variety of different things, including scholarships and bursaries, research, professorships, libraries, new buildings and other capital projects.

“It’s really important for the university to have an endowment fund so that we have money available for these types of expenditures or purposes that otherwise wouldn’t be available,” said McCallum.

However, because donors decided where they want their donations allocated, certain faculties may see more money from this fund than others.

“Certainly there are some faculties that have benefitted more than others because maybe their alumni have been more generous or they’re received large donations,” said McCallum.

For example, the Asper School of Business, Clayton H. Riddell Faculty of Environment, Earth and Resources, and the Marcel A. Desautels Faculty of Music are all named after their donors.

“Most faculties benefit from the endowment fund, but some certainly have more than others do,” said McCallum.

In 2008/09, the university received $23 million in donations to endowment funds.