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Editorial: Waiting for Godot’s donation

Published: October 9, 2009
Section: Front Page


Last spring, when non-profit organizations all over the country were clamoring for the passing of the Universal Prudent Management of Institutional Funds Act, better known by the catchy acronym UPMIFA, this editorial board set forth the opinion that UPMIFA could not be a panacea.

And now that UPMIFA has been passed by the commonwealth of Massachusetts, the act which gives non-profits greater flexibility in the spending of their endowment funds, is still not a panacea.

For fiscal year 2011, the university faces a $9 million budget shortfall due to a drop in endowment returns precipitated by the nation’s economic woes. Conceivably, the university could take advantage of UPMIFA and spend more than five percent of its endowment. That would close the gap for FY2011 but that would not solve the inevitable problem we would face in subsequent years. As Senior Vice President for Administration and Finance Jeffrey Apfel explained, spending more than five percent of the endowment just because we can and we need to right now has the potential to seriously jeopardize the university’s financial solvency for years to come. Indeed, this editorial board made similar comments last semester.

Since we originally critiqued UPMIFA, the university has created numerous committees to consider money-saving possibilities, most notably with the CARS committee.

However, when the CARS proposal came out, there was general uproar, particularly concerning a number of academic departments that might be converted to interdepartmental programs. The merit of those plans can certainly be debated but the knee-jerk resistance to any form of structural change by student and professors alike hinders are ability to effectively address our financial reality. Certainly, as members of a university community, it is our job to protect what makes our institution special and successful but we must not be so fearful of change that we reject every new idea that threatens the status quo.

UPMIFA is not now nor will it ever be the financial panacea this university needs. There is no magic fix and whining that a committee’s recommendations are too drastic will not make endowment gifts magically rain from the sky.