On the eve of its 25th year serving Charlottesville and its surrounding communities, the University's largest volunteer organization, Madison House, will be operating in the red if measures are not taken soon to insure its financial viability.
Five years ago, Student Council voted to start de-funding Madison House in an attempt to make the organization completely self-sufficient and save student activities fees for less independent student organizations.
However, Council overestimated the organization's ability to be financially independent, according to Council Vice President for Organizations Eli Dejarnette, and now the financial future of Madison House is in jeopardy.
As a result of this situation, Council President Daisy Lundy and Dejarnette currently are working out the details of a bill which will modify Council's bylaws in order to permanently reinstate Madison House's yearly funding allocation.
Mark Straub, a fourth-year Commerce student who serves on the Madison House Board of Directors, emphasized the importance of Council's continued support of Madison House because of its contributions to the communities surrounding the University.
"This decision is one over thousands of dollars, but it has a very tangible result," he said. "The lives of hundreds of Charlottesville and Albemarle kids will be affected by the future of Madison House and its ability to continue placing well-trained volunteers in the community."
Straub made a presentation to Council last week in which he requested that Council fund around 19 percent of the total budget for Madison House, amounting to $52,000 for next year, with a 3 percent increase each year thereafter to account for inflation.
A financial debacle
Madison House's funding first became an issue in the spring of 1998, when the Council Appropriations Committee granted the organization a zero allocation, meaning the group would not receive a contribution from the Student Activities Fund for the following year. However, Council restored the funding when Madison House appealed the Committee's decision -- though they only allocated the organization about 80 percent, or approximately $36,000, of the $45,000 it requested.
Madison House Executive Director Cindy Frederick explained that no one contested the significant contributions Madison House made to the University community, but there was a general disagreement as to the use of their endowment.
"The Council at that time looked at it as money in a savings account that wasn't being used to its fullest," Frederick said. "We think it's the best use of our money to have it in a fund that will hopefully grow."
The budget debate continued in October 1998 when Council passed a resolution stating that Madison House would no longer receive SAF money in 10 years. The comprehensive plan to wean Madison House off of the SAF by 5 percent each year was presented to and passed by Council the following year.
According to the 1998 resolution, Council was especially concerned with preserving the integrity of the SAF so it only would be used for student-run activities.
Because Madison House once stood as an independent community organization that later was taken under the University's administrative wing, Council said it believed the organization should be self-sufficient.
"It is the position of Student Council that the SAF no longer be used to subsidize administrative organizations such as Madison House," the resolution stated.
Although Madison House officials agreed with the plan to become more self-sufficient, they did not anticipate the combined effects of a worsening economy and a scarcity of donors.
Increased fundraising efforts
In order to meet Council halfway with its budget problems, Madison House has stepped up its fundraising efforts this past year.
In his presentation to Council last week, Straub presented a plan which estimated Madison House would raise $84,000 in fiscal year 2005.
"What Madison House has done over the last year is really develop a strong list of alumni," he said. "We have a strong alum counsel based on the past 10 years of volunteers."
Both Straub and Frederick said the alumni counsel has started to hold events in different cities and they are in the process of planning a 25th anniversary event for the year 2005.
In addition, Madison House will hold their second annual fundraising gala this year, called "Giving from the Heart," to be held Feb. 17.
However, Straub did admit that $84,000 was a lofty goal for Madison House to reach next year.
"It is an ambitious step for us, but I think we're ready to take that step," he said.
Council's budget issues
Dejarnette explained that Council's insecure budget process also was partially to blame for the heightened need for previous Councils to be stringent with Madison House.
Until last year, Council set its budget for spring appropriations by estimating the amount of money that would be left over from the previous year and adding in the actual money coming from student fees.
Since appropriations took place in March and many student organizations did not file receipts until the end of the semester, it was especially difficult to know how much they could allocate, Dejarnette said.
"They kept expanding their projections every year," he said. "So every fall they would have to cut everyone's budget."
In spring 2002, for example, Council appropriated approximately $800,000 but was forced to implement an across-the-board cut of 6 percent in the fall when available funds fell short of estimates.
This process continued to occur until changes were made last year that will make it easier to allocate funds in the future, Dejarnette said.
"Last year, Council only used the money that was available
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