How financial support has been managed
through the global economic downturn.
Through the economic turmoil of the past year, few, if any, institutions and individuals have been unaffected by the devaluation of the world’s capital markets. The University of Victoria is no different. Our endowment funds experienced a loss of 18.1% for the 2008-2009 fiscal year. On the positive side, as markets began to recover this past spring, the rate of return for the second quarter of this year was 10.4 per cent.
The ups and downs of the market are to be expected — it is how they are managed that counts, and our university and its endowment funds have been well positioned to endure recent events.
I would like to share with you how the impact of the economic downturn has been minimized — both for current students and for the long-term stability of funds that have been entrusted to us by our donors.
About 70 per cent of the university’s undergraduate scholarships and bursaries are included in the university’s base budget. Nearly all — more than 96 per cent — of graduate student support comes from the university’s base budget and external resources. None of this assistance has been directly affected by the global economic downturn.
The remaining financial support to students is funded through the endowments administered by the University of Victoria Foundation.
In all, the foundation oversees nearly 1,000 endowed funds with a combined value of approximately $225 million. Proceeds provide support for scholarships, bursaries, fellowships, academic chairs, professorships, academic departmental funding and awards. The funds are pooled and invested in a well-diversified portfolio of asset classes managed by the foundation’s four investment managers.
At the end of last December (when disbursements are set for the following year) about 40 per cent of endowed funds were below the value of their initial donation. It is a practice of the foundation, and I believe it is a sound one, to withhold disbursements to protect the principal values of those funds.
In light of the circumstances, a number of donors came forward to provide bridge funding to enable their funds to make payouts this year for financial aid, academic programs and research. The university is incredibly grateful for their generosity and commitment.
In fact, through the combination of donor support and university funding, nearly 90 per cent of our endowment funds are providing disbursements this year. Our endowment funds continue to support the quality of the University of Victoria. That is really a remarkable achievement given the economic realities with which we have been contending.
Looking ahead, the foundation will continue, as a matter of routine, to closely monitor investment performance in light of the vulnerability of the economy and the financial markets.
I am confident that as challenges or opportunities present themselves , the long-term strength of our endowment funds will remain protected and supporting the university. Such support will help the University of Victoria provide outstanding educational opportunities that are affordable and accessible.
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