Effects of endowment losses minimized

The vast majority of UVic students seeking financial assistance during the upcoming academic year will receive it. Nearly 70 per cent of UVic’s undergraduate scholarships and bursaries are part of the university’s base budget and over 96 per cent of graduate student support comes from UVic’s base budget and external sources. None of this assistance is directly affected by the global economic downturn.

The remaining support is funded through the endowments administered by the University of Victoria Foundation board. While the endowments did suffer losses in 2008 as a result of the financial market downturn, most of the funds — 60 per cent—are scheduled to award their designated disbursements to students. Forty per cent of the endowment’s funds were reduced to less than the amount of their original donations, and the practice of the foundation is to protect the principal and withhold disbursements until these funds recover. This practice is in place to protect the funds from diminishing over time.

But many of the donors notified about their funds’ status responded by providing bridge funding to enable their funds to make disbursements. Through a combination of their generosity and university funding, many of the funds previously designated as unable to make payments will now also make disbursements.

“Nearly 90 per cent of endowment funds will provide their regular disbursements for 2009/10,” says UVic Associate Vice-President Financial Planning and Operations Kristi Simpson. “As is its usual practice, the foundation will review its spending policy and asset mix this coming year and evaluate if its current approach is still appropriate, based on economic outlooks.”

The university foundation board will continue to steward the funds by actively monitoring their performance and will likely have to wrestle with diminished investment returns next year as well, says Simpson, as national and global economic uncertainty is expected to extend into 2010.