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Spring 2003
The Challenge
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Spring 2003
Strength in Numbers
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Still, 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.

So 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.

Slon 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.’ ”

THE 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.

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