The Impact of the1% Development Office Fee on Academic Senate Grants Presented to the Committee on Academic Planning and Budget May 17, 2007

Background  In 2004, the Development Office submitted a new funding model for approval.  In Fall of 2004, AP&B received this project from EBC for review and comment.

Background – APB Response  APB gave the project a score of 2.60 and submitted these comments: “While virtually all members agreed that a viable mechanism needs to be formulated to support the Development Office, they were near unanimous in the opinion that the current proposal is not the solution. Everyone who commented on this believes that retention of the Gift Fee is detrimental to optimal fund raising. Spreading the expense over gift fee + spending fee + STIP tax complicates the model without addressing the fundamental problems of the current model.”

Background  After reviewing of the proposed new Model by campus constituencies, the Executive Budget Committee recommended to the Chancellor that the campus adopt a new funding model effective July 1, The approved FY funding model consists of the following components: Gift Fee Assessment at 4% (reduced from 6%); Initiating a Spending Fee at 1% on current gift accounts and endowment income accounts; Assessing Foundation and Regents current, gift and endowment income fund balances STIP earnings at 75% (increased from 25%); and, Foundation trust administration fees at 0.50% and investment administration fees at 0.35%.

Academic Senate Grant Funding  The Academic Senate awards two types of grants: Shared Equipment Grant ($40,000) Individual Investigator Grant ($35,000)  Fall and Spring Cycle  The Senate awards on average about $1M a year in grant monies.

AS Grant Funding – ’05-’06  Awarded 40 grants totaling $1,227,229.90:

Grant Awards from Endowments  Of the 40 grants awarded in ’05-’06, 35 were awarded from endowment funds now subject to the 1% fee: