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philanthropic dollars often come with restrictions that limit how
they can be used by the university. Eight of every 10 dollars raised,
in fact, are specifically designated for use by a particular academic
unit or for a particular purpose. “That’s not well understood
by the Legislature, nor by the general public,” says Slon.
even though philanthropic giving is an important supplement to the
university’s budget and provides necessary support to critical
programs, it cannot be viewed as a replacement for revenue shortfalls
that might occur elsewhere, such as next year’s anticipated
state-budget cut of $24 million. To guarantee that amount year after
year, UCLA would have to secure it in perpetuity through an unrestricted
endowment that would provide flexibility in how the money is spent.
But creating such an unrestricted endowment large enough to fill
state funding gaps would indeed present a significant challenge,
says Steve Olsen ’77, vice chancellor for finance and budget.
As of June 30, 2002, UCLA’s overall campus endowment had a
market value of $1.2 billion. To generate $24 million annually with
an unrestricted endowment paying 4 percent, Olsen says, would require
an additional investment of $600 million.
also points to the need for realistic expectations about how much
philanthropic growth is achievable under current economic conditions.
“The depressed equity market is having an impact on individual,
foundation and corporate giving,” he notes. “A few people
have said to us, ‘I’d like to do something for UCLA,
but not now.’ ”
EFFECTS OF THE BATTERED EQUITY market also are felt in
the research arena. “We can expect to see some decline, both
in programs that the state funds directly and grants that we compete
for,” says Andrew Neighbour, executive director of the Office
of Intellectual Property Administration and associate vice chancellor
for research. UCLA is absorbing a 10-percent cut to the $20 million
it normally receives from the state for organized-research activities
such as the ethnic-studies centers, and an additional 10-percent
across-the-board cut has been proposed for next year. State-awarded
contracts and grants represented a scant 5.3 percent of UCLA’s
total research funding in 2001-’02.