Proposed USAC Endowment
Learn more about the endowment proposal below:
- The council would use $100,000 of surplus to establish an endowment with the UCLA Foundation.
- In future years, councils would set aside $150,000 of its surplus to go into its programming and capital contingency funds.
- Any surplus funds above $150,000 would go toward other programs or be put into the endowment.
- The UCLA Foundation will manage the endowment at no cost and will guarantee a 5 percent return each year "“ $5,000 annually with a $100,000 endowment.
SOURCE: USAC President David Bocarsly
Compiled by Jillian Beck, Bruin senior staff.
The undergraduate student government is considering creating an endowment with $100,000 of the council’s surplus to address unstable surplus from year to year.
At its meeting Tuesday, the Undergraduate Students Association Council discussed President David Bocarsly’s proposal to use $100,000 of this year’s $308,000 estimated surplus ““ remaining funds from the previous council that are carried over ““ to start an endowment with the UCLA Foundation.
Through an endowment, money is invested with the goal of adding yearly returns onto the original amount, which would generate more money in the long run. USAC would not spend the initial investment of $100,000 placed in the endowment.
Under Bocarsly’s proposal, $150,000 of the surplus would be split up annually among the USAC programming funds and the capital contingency fund, which provides money for supplies like computers in Kerckhoff offices. A portion of the remaining funds would be spent on programs the council deems necessary, and then the rest would be put into the endowment, Bocarsly said.
After seeing the relatively high amount of surplus that spilled over from last year ““ the fourth highest in the last 10 years ““ Bocarsly said he thought to propose the idea to council.
“Rather than putting that huge amount of money into programming that is abnormal, (with the endowment we would be spreading) it out over all those years,” Bocarsly said. “We are going to invest in the long term.”
According to Bocarsly’s proposal, the UCLA Foundation will run the endowment at no cost and will guarantee a 5 percent return each year, he said. The UCLA Foundation manages and invests contributions to the university, according to its website.
Two student leaders spoke against the endowment during the public comment section of the council meeting Tuesday.
John Joanino, a student member of the Student Fee Advisory Committee, which makes recommendations to the chancellor about how to allocate student fees, said he appreciates the effort to stabilize USAC funds, but still has reservations about the proposal.
Lawrence Turner Jr., a fourth-year African American studies student and chairman of the Afrikan Student Union, said he was concerned about USAC creating an endowment using funds that come from student fees.
“I just think (the endowment) is a little problematic, especially since you’re using student fees,” Turner said at the meeting. “You should go to the students.”
During the council’s discussion of the proposed endowment Anees Hasnain, USAC community service commissioner, also said she thought USAC should find out what students think about the endowment idea.
“We should at least make some effort to engage the student body about this,” she said at the meeting.
Bocarsly said he encourages all councilmembers to talk to students on an individual basis.
“It is a very complicated process and it isn’t possible to educate all 27,000 students,” Bocarsly said. “But, we should do everything possible to talk to students about this.”
There is no plan to ask the student body about the endowment as a whole at this time, he added.
The minimum amount to start an endowment is usually $100,000, said Steve Gamer, associate vice chancellor for development and executive director of the UCLA Foundation. But, Gamer said he told Bocarsly he would waive the minimum for USAC. This means USAC can use less of its surplus funds to start the endowment.
The amount of money the endowment makes would be given to USAC through Student Government Accounting, Bocarsly said. For instance, a $100,000 endowment would collect an additional $5,000 under a 5 percent return rate. The money would then essentially be tacked onto the surplus each year, Bocarsly added.
The council has complete discretion over how surplus is spent. In the past, the money has gone toward programs including Night Powell and textbook scholarships. This year, it partially funded Bruin Bash and is expected to supplement the annual JazzReggae Festival.
After USAC determines how much of surplus funds it will spend, the money is distributed among the programming funds and capital contingency fund.
Roy Champawat, the director of the UCLA Student Union who acts as a financial adviser for the council, said the endowment would help to stabilize the inconsistent surplus from year to year.
“The beauty of (the endowment proposal) mechanism is that it would address the part (of surplus) that’s bad,” Champawat said.
In past years, surplus has gone from almost $520,000 in 2009-2010 to about $273,000 last year.
If high surpluses do arise, the council would be able to know how much it would have for programming allocations and then could take the additional money and put it into the endowment, he added.
“I believe most people would characterize the volatility as the damaging part (of the surplus problem),” Champawat said. “And this speaks substantially to volatility.”
The council plans to vote on the proposed endowment during the first few weeks of winter quarter.
Contributing reports by Kristen Taketa, Bruin reporter.