Three years after the market crash and credit crunch of late 2008, Cal Poly’s nonprofit foundation has yet to recoup its financial losses, which have resulted in a decrease in funding for students at a time when tuition is going up and enrollment space is dropping.
The Cal Poly Foundation, which generates private funding for the university, had net assets worth $205 million in 2008. The amount fell to $174 million in 2009 and climbed to $196 million in 2010.
“The numbers reflect a very ugly market that started to build back up and new contributions (from donors),” said Larry Kelley, the foundation’s treasurer.
Cal Poly’s nonprofit organization has shown a financial trend similar to that of other CSU campus foundations.
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Those include Chico State, which reported net assets of $55 million in 2010, $53 million in 2009 and $62 million in 2008; and Sonoma State, which had $165 million in 2010, $147 million in 2009 and $148 million in 2008.
Foundation funds are used for a variety of purposes, including instruction, lab equipment and building costs.
For example, $17 million in Cal Poly foundation money is going toward a new $132 million science building under construction. A state bond that was sold last year primarily funds the building.
Payments for instruction, which help support needs on campus, rose from $1.2 million in 2009 to $1.4 million in 2010.
But student grants and scholarships dropped from nearly $1.8 million in 2009 to about $816,000 in 2010. And public services expenditures dropped from about $600,000 in 2009 to $350,000 a year later.
Kelley said those monies for students and the public can depend on market fluctuations over a three-year period.
“What we do is establish a spending rate based on what the foundation has earned on average during that three-year time,” Kelley said.
Based on that three-year plan, he said, the foundation’s board might allocate less money to students and the public even in a strong investment year.
Foundation money accounts for less than 5 percent of Cal Poly’s operating budget, which is primarily covered by state funds and student fees.
But amid a bad economy, the state funding allocation to Cal Poly is about $90 million this academic year compared with $150 million four years ago, Kelley said.
Tuition at Cal Poly has increased from $2,976 per year in 2002-2003 to $7,921 in 2011-2012, according to CSU officials.
Kelley, who also serves as the university’s vice president for administration and finance, said foundation money spent toward Cal Poly operations can depend on the interest generated from investments and specifically how donors designate contributions.
Cal Poly’s portfolio consists of about 71 percent equity and 29 percent-fixed earning funds, Kelley said.
The foundation collected about $19 million in donations in 2009 compared with $25 million in 2010.
While donations can’t support the bulk of operations, Kelley said, they show a dedication to help provide a “margin of quality” that separates the university from other college campuses.
Kelley said an audit for the fiscal year that ended June 30 is expected within the next few months. Although that audit hasn’t been completed yet, he said the foundation’s accounting shows its net assets at $227 million for 2011 — noting a relatively strong year for investment returns.
The audit for the fiscal year ending in 2010, completed by the San Luis Obispo-based accounting firm Glenn, Burdette, Phillips & Bryson, is the latest independent accounting of the foundation’s finances.