Private Support for Infrastructure and Central ServicesGrowing with a Sustainable Financial Model

Academic Senate

Academic Planning and Budget Committee

October 24, 2013

John PlottsSenior Vice Chancellor, Finance and Administration

John FordVice Chancellor, Development and Alumni Relations

Private Gift Support for Infrastructure

• Current State• Philanthropy supports direct expenses incurred by

research, education, and patient care• Philanthropy rarely supports the core

administrative functions required to conduct research, educate students, and care for patients

• Gifts currently assessed at 4% with a 1% spending fee

• Exemptions from current fee include capital, student support, junior faculty fellowships, and various individual exemptions.

2

UCSF faces significant demands against a limited supply of core central resources

Examples of Funding Obligations:• Campus Seismic Investment:  UC Hall, Clinical

Sciences Building, San Francisco General Hospital

• Facilities Investments:  Utilities and Deferred Maintenance Obligations for Existing Campus Buildings and Scheduled Renewal Projects

• Technology Investments:  Business, Research and Clinical Systems and Related Infrastructure

• Strategic Programmatic Investments

• Continuing funding of central administrative functions including finance and accounting, development, and security.

The June 2013 Core Financial Plan began with over $350M, and is projected to decline below $100M in 2021-22

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2012-13 2016-17 2021-22 $-

$100

$200

$300

$400

UCSF Core Financial Resources - Projected Ending Fund Balance2012-13 through 2021-22

$ in millions

Operating Reserve (Goal 2%)(3)

Liquidity Reserve (2%)(3)

$376m

$45m

$74m

Base Case

Unrestricted Sources(1)

> Indirect Cost Recovery (38%)> State Educational Appropriation (31%)> Tuition (6%)> Investment Pool Income (6%)> Internal Assessments (8%)> Patent and Legal Recoveries (3%)> Medical Center Strategic Initiative (1%)> Other (7%)

Facilities Requirements 13%(2)

> Capital Projects> Programmatic/ Seismic> Facilities Renewal> Unanticipated Remediation

Debt Service 23%(2)

Strategic Initiatives

5%(2)

Enterprise-wideTechnology

Requirements 3%(2)

Operating Requirements 56%(2)

> Schools & Administration> Utilities> Office of the President Fees

(1) Percentages represent the distribution of projected revenues for the ten-year period(2) Percentages represent the distribution of projected annual allocations over the ten-year period(3) As a percentage of campus expenditures

= Recurring Revenues and Transfers In

= Annual Allocations

81%

Grants31%

Current Funds Restricted

26%

Construction25%

Current Funds Unre-stricted - Schools/Depts

2% Current Funds Un-restricted - Chancel-

lor1%

Endowment/FFE Un-restricted

0%Endowment/FFE

Restricted11%

Endowment/FFE - Pro-fessorships/Chairs

4%

Endowment/FFE - Student Support

0%

UCSF Private Support is almost entirely directed to restricted use

(2013 FY)

Proposed Infrastructure and Operations Fund

• Informed by discussions with Revenue Philanthropy Group. Proposal similar to practices at other major research institutions.

• Replaces existing assessment model to increase support for facilities operations and maintenance and central administrative functions.

• Proposed: 4% at time of gift/6% upon expenditure.

• All gifts and endowment income subject to assessment, excluding student support

• Gifts to existing capital campaigns will receive grandfathered exemption

• Exceptions will require alternate funding source.

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Series1

$(100)

$-

$100

$200

$300

$400

UCSF Core Financial Resources - Projected Ending Fund BalanceAlternate Gift Assessment Models

2012-13 through 2021-22$ in millions

Operating Reserve (Goal 2%/Currently 0%)

Liquidity Reserve (2%)

Base CaseIncludes Current 4% gift/ 1% spending assessment

$376mProposal

4% gift/6% spending

$162m

$74m