University of Louisville Foundation Charts New Fiscal Path
Foundation Board of Directors agrees to spending policy, ending deferred compensation plans
LOUISVILLE, Ky. – The University of Louisville Foundation Board of Directors set a 5.51% spending policy, and ended its deferred compensation plan at Tuesday’s Board of Directors meeting. The decisions come as part of the Foundation’s ongoing commitment to improving management, governance and transparency.
“The University of Louisville Foundation continues to take long strides toward getting our house in order,” said Keith Sherman, Interim Executive Director and Chief Operating Officer for the ULF. “These latest moves put us on a path to ensuring the endowment grows over time, which is critical to ensuring the Foundation meets its obligation to supporting the academic mission of the university. Potential short term cuts at the university will be painful, but they are necessary to correcting the overspending that occurred in the last few years.”
The actions taken by the University of Louisville Foundation Board included:
- Establishing a Spend Policy for Fiscal Year 2017. After working with financial advisors to predict the upcoming year’s investment income, the Directors voted to reduce the organization’s annual spend rate from 7.48% to 5.51%. As a result of this cut, the university system will receive less money than years past. The short-term reduction will put the ULF on a path to long-term financial health. It will take several years to restore the financial health of the Foundation, made possible by a responsible spending rate.
- Ending the Deferred Compensation Plan. Moving forward, the ULF has terminated the deferred compensation plan for key University or Foundation employees. The Board of Directors voted unanimously to end this program, and some current employees will be affected by this decision. The compensation plan end date is March 31, 2017.
- Revising its by-laws. The Foundation updated its by-laws to address concerns from the State Auditor and the Southern Association of Colleges and Universities (SACS). Changes include formalizing a prohibition of the University President serving as the President of the Foundation. More changes are expected in future meetings.
“The actions taken today send a clear message: we are willing to make the big changes necessary to restore stakeholder confidence in this organization,” said Chairwoman Diane Medley. “We have more work to do and some information will be coming to us soon that may illuminate future changes. Ultimately, we are moving to ensure the Foundation helps the University of Louisville in achieving its statutory mandate to be a premier metropolitan research university.”
The University of Louisville Foundation seeks to make the University of Louisville a premier metropolitan research university recognized for advancing the intellectual, social and economic development of the community and its citizens. Learn more by visiting louisvillefoundation.org. Follow the Foundation on Twitter @UOFLF.