In a remarkably understated display of wealth, the University of Virginia has set aside $2.2 billion in a fund for “strategic” investments, Nick Anderson of the Washington Post reports. This fund will be sort of a “non-endowment endowment” that can be used as the board and administrators wish — and is in addition to the school’s “regular” endowment of $6.1 billion. A former board member calls it a “slush fund.”
Where did the money come from? Apparently it was lying around in little slush funds – I mean “reserves” – throughout the university, and the administration brought it all together. The Post says that, according to the university’s executive vice president, it “was assembled from reserves built up over years that have ensured the university’s stability in running its academic and medical programs.”
A member of the state legislature called the amount “mind-boggling” and the Post suggests that the legislature may be concerned about the lack of transparency that made this fund such a surprise. The state government funds $150 million or 10 percent of the university’s operating costs each year, plus substantial capital investment.
But no, according to Executive V.P. Paul Hogan, the process of accumulation has been “very transparent”; $2.2 billion is not that much for a university of Virginia’s size (with a medical center), and the school has been “out in the open with the board.”
For those of us who, like the Virginia senator, find this fund “mind-boggling,” it raises a number of broader questions. What does transparency actually mean at a university? How much “fat” is there in university budgets? And why do schools with such large amounts of liquid assets keep raising tuition? (Virginia’s is going up by nearly 10 percent this fall.)