On a weekend when the Board of Visitors pondered the financial crisis brought on by budget cuts to the University, Board members must have been relieved to hear two pieces of good financial news at their Oct. 5 meeting.
Private donations to the University reached an all-time high in the year ending June 30, Bob Sweeney, senior vice president for development and public affairs, told the Board.
Meanwhile, the University's endowment weathered tough financial markets better than nearly all its peers last year, officials from the University Investment Management Company reported.
The University received over $255 million in "cash-flow" gifts in the 2001-2002 year, Sweeney said. That shatters the previous high of $195 million, set in 1999-2000.
"That probably puts us within the top 10 or 15 of all higher education institutions in the country," Sweeney said.
The cash-flow figure includes one-time gifts given last year, as well as payment of money that donors had pledged to give in previous years.
"One of the biggest factors was our ability to generate very large gifts" and to convince donors to leave money to the University in their wills, Sweeney said.
About 75 percent of giving comes from just 10 percent of donors, Jennings said.
In addition to large gifts from a few donors, the University has one of the highest proportions among public universities of alumni and parents who give, Sweeney said.
The University falls "about in the middle" when compared to private schools, he said.
Twenty-nine percent of undergraduate alumni gave, and 23 percent of graduate alumni donated.
State budget cuts to the University probably spurred alumni to give more, Jennings said. This year's dip in the stock market also made it an opportune time for investors to make charitable donations, Jennings said.
David A. Harrison III, who died in June, left the University $114 million that wasn't included in last year's total, meaning the University has started out 2002-2003 almost half-way toward the fundraising record.
Sweeney anticipated that donors might give even more this year, saying most of the donations last year occurred before the budget situation was highly publicized.
"I think there's a very good chance we'll have another record-setting year," Sweeney said.
Because of budget cuts, the University is "attempting to achieve a level of self-sufficiency no other public University has ever aspired to," he added.
Board Finance Committee member Thomas F. Farrell II said he was impressed with last year's level of giving.
"In the economy we have, and the stock market we have, for alumni to show that kind of support says a lot about our institution and its graduates," he said.
About one-third of all gifts to the University go into the University of Virginia Endowment, money that the University invests rather than spending right away. In a year when the stock market plummeted by about 17 percent, the University's $1.7 billion endowment outperformed nearly all its peers by losing only one-tenth of a percent of its value in the year ending June 30.
The University finished second out of the 36 schools of similar size with which it compares itself, said Alice Handy, president of the University Investment Management Company, which manages the University's endowment.
The endowment generates about $80 million in income for the University every year from stock dividends and overall appreciation, Handy said.
That money goes to fund endowed professorships and various scholarships, among other programs.
The University protected itself against the weak market by investing heavily in "hedge funds," special investments designed to make money even in a sinking market, she said.
Because of strong growth in 1999-2000, the income the University reaps from its endowment so far hasn't been affected by the weak economy, Handy said.
But income might dry up if the market remains bearish in coming years, she said.
Smaller, independent foundations for the Law, Darden and Medical Schools didn't do as well as the much larger central University endowment. Those foundations lost between 3 and 4 percent of their value in 2001-2002.
Also, pledges for the College are actually down from a high in 2000-2001, Associate Dean for Development Tom Jennings said.
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