PUBLICATIONS Inside Illinois Vol. 24, No. 8, Oct. 21, 2004

$174.6 million in private gifts support university programs

Gifts to the UI and to the UI Foundation for the fiscal year that ended June 30, totaled $174.6 million, according to Stephen K. Rugg, UI chief financial officer and treasurer of the UI Foundation.

In his report at the annual meeting, Rugg noted that Illinois’ economy tends to be slower than the rest of the nation to enter recessions and that it lags recovery as well. When the Illinois economy slowed around fiscal year 2001, support for public universities fell further and has recovered much more slowly than has tax support for the state as a whole. Universities, Rugg said, face stiff competition from other important statewide priorities, such as elementary and secondary education and human services.

Twenty-five years ago, 46.6 percent of the UI’s $612.3 million budget came from state taxes. For the FY 2005 budget of $3.03 billion, 23.1 percent is derived from state taxes. Grants and contracts as sources of revenue have expanded from 22.7 percent of the FY 1980 budget to 34.4 percent in the current budget, reflecting the ability of university faculty and scholars to attract steadily growing amounts of federal and corporate support.

And while tuition has also increased as a funding source, Rugg pointed out that students have expressed willingness to pay more for their educations so long as the university sustains its quality. Private gifts and endowment income have also ticked upward over the past quarter-century.

Of the $174.6 million in private support received last fiscal year, $77.6 million, or 44 percent, came from alumni and friends, $44.5 million (26 percent) was from corporations, $40.9 million (23 percent) was from
foundations and $11.6 million (7 percent) was from associations.

Private gifts support a number of programs across the three UI campuses. Last fiscal year, $46.7 million of the $174.6 million raised was added to the endowment, a nearly $17 million increase over FY 2003. Student financial aid in the form of scholarships, fellowships and student loans also received a significant boost, climbing from $3.3 million in FY 2003 to $9.6 million in FY 2004. Donors to the UI provided $20.3 million to academic divisions, $36 million for research, $15.7 million for buildings and equipment, $11.1 million for public service and extension, $7.1 for faculty and staff compensation, $5.6 million for athletics, and other specific designations.

Of the $174.6 million received last year, 67 percent or $117.3 million was designated by donors for current use. Those funds provided support to a number of programs across all of the university’s campuses. Twenty-seven percent or $46.7 million was invested in endowed funds, which are held in pooled investment accounts under the policy supervision of the Investment Policy Committee of the Foundation Board and the Finance and Audit Committee of the UI Board of Trustees. Earnings from endowed funds help support an array of university endeavors, including student financial aid, faculty and program support. Such investments also provide specified annuity and life-income funds for many donors.

The UI’s combined active and deferred endowment stood at $1.557 billion as of June 30, 2004. The active endowment, which represents 68 percent of the university’s endowment picture, grew to $1.058 billion by the end of last June. That represents a nearly $150 million increase since FY year-end 2000.

Also included in the UI’s total endowment is $364.5 million designated as revocable deferred gifts. Another $134 million of the endowment is in charitable trusts and other irrevocable gifts held by the UI Foundation and others.

The foundation’s endowment goal is to provide a distribution to the university each year to meet its spending needs coupled with a desire to protect the purchasing power of the endowment against inflation. Over the past 10 years, the investment return allowed the foundation not only to meet the spending and inflation objectives, but also permitted a net real return to the endowment of 2.1 percent.

Growth of the endowment over the past decade, Rugg said, has enhanced many important academic efforts at the University of Illinois. For instance, the library’s endowment has risen from $9.4 million in 1994 to $25.9 million as of June 30 this year. Endowment for professorships has increased from $22.3 million to over $63.3 million. Graduate fellowships have climbed from $17.5 to $60.4 million. Endowed chairs have soared from $15.7 million 10 years ago to $111.8 million by the end of FY 04. And undergraduate scholarships and student aid endowment jumped from $33 million to $119 million over the past 10 years.

Private gifts to the UI and the foundation of testamentary commitments and irrevocable life-income arrangements have risen dramatically over the last decade. Testamentary commitments – deferred gifts made through bequests, life insurance, retirement accounts and other plans – rose from $114.3 million in 1994 to $368.9 million in 2004.

Irrevocable life income arrangements, such as charitable trusts and annuities, to benefit the UI during the same period rose from 291 gift commitments of $48.7 million in 1994 to 648 gift commitments of $134 million in 2004.

Membership in the Presidents Council, the university’s highest donor-recognition program administered by the UI Foundation also has more than doubled over the past 10 years. Rugg said membership in the Presidents Council rose from 4,238 individuals in 1994 to 9,161 in 2004.

“Generous responses to various fund-raising efforts have produced steady growth in total endowment. Total market returns combined with new-gift development have produced a total endowment today that is more than three times what it was ten years ago, rising from $490.8 million to $1.557 billion,” said Rugg. “That translates to total endowment growth of 12 percent over the past decade.

More than $22 million in gifts to benefit UI
Gifts totaling well in excess of $22 million earmarked for UI programs at Chicago, Springfield and Urbana-Champaign were announced Oct. 15 at the UI Foundation’s 69th annual meeting.

The gift announcements were part of the three-day meeting conducted by the foundation, the university’s private-gift fund-raising arm. More than 500 alumni and friends of the UI attended the event on the Urbana-Champaign campus.

Recognized at the business meeting:

• Gary and Daylene Lichtenwalter of Aspen, Colo., whose deferred gift of more than $2 million will provide scholarships to undergraduates enrolled at any of the three UI campuses. Priority for the Gary R. Lichtenwalter Scholarships will be graduates of Joliet Township High School and/or Joliet Junior College. A 1958 graduate of JTHS, Lichtenwalter attended Joliet Junior College before earning his bachelor’s degree in finance from the UI in 1963.
  

The following gifts support the Urbana-Champaign campus:

• An outright and deferred gift totaling $5 million from Dick and Carole Cline of Wheaton, Ill., will create the Center for Study of Democratic Governance in the College of Liberal Arts and Sciences. The center, for which the Clines’ gift is the founding endowment, will play a key role in educating UI students and in generating ideas, research and information that will help develop civic leaders, invigorate civic participation, and enhance the understanding, reach and practice of democracy.
  
• An outright gift of $2 million from Jeane Erley of San Diego and the family of Jeane and Richard Erley will create the Richard A. Erley Leadership Development Program in the College of Business. The Erley Program will provide support, specialized training and distinctive educational experiences to help College of Business students prepare for and gain a competitive edge in the business world.
  
• An outright gift of $1.5 million from the Demirjian family of Decatur, Ill., and their business, The DemirCo Group, will lead to construction of the Demirjian Indoor Golf Facility. The comprehensive facility will allow for year-round practice, training, instruction and research.
  
• A $1.5 million outright gift pledge from H. Richard McFarland of Indianapolis will help fund construction of a carillon/campanile, which will be named in memory of McFarland’s wife, Sarah “Sally” McFarland. Plans for a privately funded carillon on the Urbana-Champaign campus have been in the works since the 1980s. The carillon will be able to produce fully harmonized, elaborate music, including compositions written specifically for the carillon as well as transcriptions of music written for other instruments.
  
• A $1.2 million bequest from Arthur R. Wyatt of Champaign will endow the men’s varsity golf head coach. Wyatt was a member of the Fighting Illini golf team and assistant golf coach for 15 years while also serving as a professor of accountancy until 1966. After a career at Arthur Andersen & Co. in Chicago, Wyatt returned to his alma mater in 1992 as an adjunct professor of accountancy, a position he still holds.
  
• A gift of real estate from Richard and Sylvia Eckhardt of Fallbrook, Calif., will create an endowment that will support a professorship, fellowships and scholarships in civil engineering as well as scholarships for undergraduate students involved in InterVarsity Christian Fellowship and Campus Crusade for Christ.
  
• A seven-figure bequest from John and Carol Greenleaf of Saratoga, Calif., will create the John and Carol Greenleaf Endowed Chair in Molecular and Integrative Physiology in the College of Liberal Arts and Sciences.
  
• A deferred gift of more than $800,000 from Helen Davies of Lombard, Ill., and her late husband, James, will support the Leadership Initiative in the College of Agricultural, Consumer and Environmental Sciences.

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