News Release

A Message from the UW Foundation

Dear UW Alumni, Friends, and Donors:

 

It goes without saying that we are living during a truly remarkable time in our nation’s—and our world’s—history. The current global economic crisis is unprecedented. The crisis has affected all areas of our financial existence. Access to credit has been restricted, home values have decreased, consumer spending is down, and stock portfolios have dropped dramatically.

 

For all of the challenges we face, we are fortunate to be associated with the University of Wyoming, an outstanding institution strongly supported by the state of Wyoming and countless numbers of enthusiastic donors, alumni, and friends. Since its founding in 1886, UW has sustained its strength through difficult and demanding times. Anyone familiar with the boom and bust economy of Wyoming certainly knows that UW is prepared more than most to weather the current economic storm.

 

As we plot a course through this unpredictable financial environment, the University of Wyoming Foundation is committed to communicating a clear and comprehensive message about our strategy for addressing the current economic challenges.

 

As many of you know, a number of university endowments are seeing their portfolios drop sharply and are under pressure to meet their obligations. While we are not unaffected by the economic downturn, the UW Foundation remains a strong institution—we are experiencing another robust year in raising private support for UW while also proactively and prudently managing the university’s private assets during these volatile times.

 

The UW Foundation pledges always to be a watchful steward of your generous support. For this reason, we want to allay any concerns you may have regarding the performance of the Foundation’s portfolios, our ability to meet our current commitments, and the stability of the organization.

 

The Foundation Strategy: A Proactive Approach

 

The UW Foundation Board of Directors and its Investment Committee are hands-on in addressing issues arising from the decline in the university’s endowment portfolio. Last October, the University of Wyoming Foundation Investment Committee met in Denver with the UW Foundation’s senior investment consultant Monticello Associates to discuss strategy. Since then, Dick Taggart, UW Foundation Investment Committee chairman, embarked on a two-week national road trip focusing on investment issues. He traveled to Detroit, Boston, New York City, and Washington, D.C., to discuss the current economic situation and its proactive management with corporations, money managers, and the federal government.

 

Portfolio Performance

 

With regard to portfolio performance, the total endowment fund for the UW Foundation was down 14.67% for the final quarter of 2008 ending December 31, 2008. The Foundation’s endowment for all of 2008 was down 27.38%.

 

The UW Foundation is in a better financial situation than other educational institutions across the country, many of which are facing major liquidity issues. While our endowment fund is not facing any liquidity issues, we do have a significant number of funds below their historic gift value.

 

These are underwater endowment funds that will be subject to reduced payouts in Fiscal Year 2010 based on market values determined on December 31. However, there are several possible options to help with budget shortfalls, including working with the university to explore alternate funding options or meeting directly with donors. We are ensuring that our deans, directors, and other campus partners are aware of the current environment so that they can plan appropriately for what may well be a lower level of support in the near future.

 

Another possible option hinges on the outcome of legislation—the Uniform Prudent Institutional Funds Management Act (UPMIFA)—which is currently under review by the Wyoming Legislature. Passage of this new legislation will allow the UW Foundation greater flexibility in the management of endowment accounts and the structuring of endowment spending policies.

 

Capital Construction Projects

 

With regard to capital construction, the University of Wyoming is “full speed ahead." Construction projects at many universities are being curtailed until the financial markets recover. Private gifts supporting UW construction projects are invested by the UW Foundation separately from the endowment pool—in short-term investment strategies. These strategies have protected all of the university’s private gifts targeted for construction projects while also providing moderate asset growth.

 

Fundraising Performance

 

The UW Foundation is sensitive to the economic uncertainty that is challenging our alumni and friends, and we deeply appreciate the unwavering support of the UW family. We are pleased to report that the UW Foundation is enjoying another strong year of private fundraising despite the economy. To date the UW Foundation has secured over $25 million in gifts and commitments during the first six months of the university’s fiscal year, with several key “million dollar and multi-million dollar gifts” anticipated in the near future.

 

In summary, the UW Foundation investments have not been unscathed by the current economic crisis, but the Foundation and its Board continue to work through the challenges that arise. Please be assured that the UW Foundation is well positioned to confront the current financial situation and to take advantage of its economic opportunities. Your unwavering support is greatly appreciated. Together we will continue our work to ensure that the greatest era in UW’s history continues on a solid track.

 

Sincerely,

Posted on Friday, February 13, 2009