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When we're talking about fighting austerity at @UVA and other wealthy schools, the $9 billion+ elephant in the room is: why not spend more of the endowment? We're often told this isn't possible--but is it? 1/ #FightAusterityUVA
Let's start with what an endowment is. A university endowment essentially is a pile of wealth that is represented in lots of different forms, most frequently: land, buildings, "restricted funds," and investments. 2/
So what's off limits? Well, massive assets like real estate are difficult to turn into cash, and "restricted funds" are parts of the endowment intended for very specific purposes. For instance, a $$ alum gives a gift intended just for the library renovation. 3/
This leaves the unrestricted endowment, most of which is invested. As of 2019, @UVA's unrestricted endowment = $2.78 billion dollars split into 2 pools: a short-term and a long-term. The short-term pool is the one we're interested in... 4/
Because it's the wealth that could either be turned into cash within a year or is already cash available for use right now. As of December 2019, UVA had ~$149.2 million in cash and cash equivalents. 5/
"But ah, ah!" the university says--"We can't afford to use any of that!" Actually, they totally can. They basically told us as much, at a BoV Finance Committee meeting in March. 6/
UVA's Chief Investment Officer reported then that UVA's investments are doing even better than they themselves thought likely, and better than other peer public institutions. The average uni endowment gets around a 5.43% return, but UVA? 7/
In 2018, our endowment return was up to 12.4%. In 2019, it was 11.4%. It looks as though UVA's financial outlook is rosy--and outside assessments agree. Well into the pandemic, Moody's assigned UVA a AAA rating. https://www.moodys.com/research/Moodys-assigns-Aaa-to-University-of-Virginia-Series-2020-outlook--PR_906557177 8/
So, what does this all mean? The CIO himself laid it out: "There is ample liquidity in the pool—51% of the pool could be converted to cash within one year." That means that over half of UVa's invested endowment wealth could be cash in a matter of months. 9/
How much of a difference could this money make? Quite a bit. The University usually spends 4-6% of its endowment a year. In 2009, the BoV increased endowment spending by 0.5%, resulting in an extra $16mill to help combat the effects of the recession. 10/
A similar increase in 2020 would result in $49 million dollars available to spend RIGHT NOW. Think of how many jobs could be saved with an extra $49 million. 11/
Given all this, why wouldn't the Board of Visitors to do something they can and have done multiple times in response to past crises: authorize an increase in endowment spending? What's holding them back? 12/
Answering this question would go a long way towards increasing transparency around @UVA's current financial position. We call for this and much more when we say #FightAusterityUVA! https://actionnetwork.org/petitions/actfastuva
