Throughout its history, the University of Virginia has relied on appropriations from the Commonwealth of Virginia for its core funding. At the same time, support from generous donors has provided the margin of excellence that sets the University apart. Today more than ever, gifts from alumni, friends, and organizations are helping the University to maintain a secure place among the nation's most eminent centers of higher learning, public and private. Nationally recognized for its efficiency, the University stewards funds from taxpayers and donors with equal care. The University and its related foundations work together to ensure that private resources are managed prudently and responsibly and that gifts are used as donors intend.

Q. If I make a gift to the University, how can I be sure it will be used for the purpose I designate?

A. Whether you give directly to the University or to one of its related foundations, your contribution benefits the programs of your choice. In most cases, your gift will be deposited into an account created for the area you wish to benefit. If you are the first donor to make a substantial gift for a particular purpose, a new account will be established. The University or a related foundation will send you a receipt with the name of the account. This helps to ensure that the funds have been directed to the area you stipulated. After the gift is deposited into the account, the department or program you have chosen to benefit will be notified that the funds are available.

If your gift creates a new endowment, such as a professorship or a scholarship, the University or the foundation works with you to prepare an endowment agreement detailing how distributions will be spent. You will receive periodic reports on the market value and expenditures of the fund.

Q. Who manages the University's endowment funds?

A. The Finance Committee of the Board of Visitors sets investment policy for the University’s endowment, which is subject to review by the State Auditor of Public Accounts. Day-to-day monitoring and management of the endowment are the responsibility of the University treasurer, who serves as president of the University of Virginia Investment Management Company. The company’s board is a subcommittee of the Finance Committee. In addition to members of the Board of Visitors, the company’s board includes four alumni who are recognized leaders in the field of investment management.

The University-related foundations hold additional endowment funds for the benefit of schools and programs. These funds are invested with the help of professional managers, who follow policies set by the foundations’ boards. Each year, when foundations transfer funds to the University to support scholarships, faculty salaries, or other programs, the Board of Visitors approves their expenditure in accordance with the relevant endowment agreements as part of the University’s annual operating budget.

Q. If I do not designate my gift for a specific purpose, how is it used and managed?

A. Unrestricted private support allows the University to meet urgent needs and to capitalize on emerging opportunities, and it helps to fuel the day-to-day operations of the academic enterprise. Most annual gifts, such as those made in response to a telephone or mail solicitation, are for the unrestricted use of the University or its schools and programs. Deans and department chairs may use these resources to provide financial aid for students, to support new initiatives in teaching and research, or to improve and maintain facilities. Unrestricted gifts from parents may be used to enhance student-life programs and student services.

If you earmark your gift for the unrestricted general endowment, your contribution is invested with other funds to generate income for the University. Distributions from the unrestricted endowment help to meet a variety of needs, including faculty salary enhancements, seed funds for promising research programs, and support for administrative operations.

Q. If I prefer to give to a school-related foundation, how can I be sure my contribution will be directed to the program I wish to benefit?

A. A number of the University's schools and programs have related foundations that raise and manage philanthropic support. The boards of the foundations have a fiduciary responsibility to use gifts from donors as they are designated. They also work with the deans of the schools to determine how unrestricted contributions made through the foundations can best be used to sustain the schools' programs. Year to year, schools depend on these funds to provide student aid, to build and maintain library collections, to support student organizations and publications, and to enhance teaching and scholarship. Gifts made through the Law School Foundation, for example, provide some 40 percent of the Law School's budget. The Darden School Foundation operates the graduate business school's highly regarded executive education programs and provides roughly half of Darden's revenues.

Q. In what other ways do the foundations help the schools?

A. In addition to raising and managing private funds, foundations operate communications and alumni relations programs for the schools, providing valuable services at no cost to the taxpayer. They also help the schools cultivate productive relationships with other key constituencies, such as the business community. This translates into not only philanthropic support, but also participation in career-development programs and on-Grounds recruiting of students.

Q. Are the foundations entirely independent from the Commonwealth and the University?

A. Most of the foundations are distinct, non-profit organizations under the provisions of 501(c)3 of the U.S. Tax Code, and all are incorporated by the Commonwealth of Virginia’s State Corporation Commission. The University exercises appropriate due diligence with respect to their operations. The Board of Visitors, which is appointed by the governor of the Commonwealth, must approve any new venture proposed by a foundation. The board has a representative on the board of each of the foundations, as does the president of the University.

Q. As a state government agency, the University makes its financial records available to the public. Are the foundations' finances also open to public inspection?

Yes. As non-profit organizations, they must disclose their financial records on IRS Form 990. This document, which is available to the public, reports expenses and revenues, total assets, salaries of top managers and officers, and lists of investments. Many of the foundations publish annual reports containing financial details, and most of these organizations make their audited financial statements available as well.

Q. Are all University-related foundations involved in raising funds?

A. No. In fact, more than half the foundations were created for the management of business operations. They help to relieve the University from cumbersome and time-consuming processes and transactions, and they allow the University to receive the benefits from business ventures without being exposed to the risks.

For example, the University Patents Foundation arranges licensing agreements for practical applications of faculty research, and HealthCare Partners negotiates collaborations with other medical institutions and practices. The University of Virginia Foundation purchases and manages real estate on behalf of the University, both for investment purposes and for the development of research parks, medical clinics, and other facilities that strengthen the University's academic and healthcare programs. Since the foundation is not a state agency, the real estate it purchases remains on local tax rolls until it is used to meet academic needs.

Q. Why is it said that these organizations are secretive about their business? Is there information they must withhold from public view?

A. Like the governing boards of state agencies, foundations involved in management operations often negotiate sensitive business transactions that can yield significant benefits for the University's academic and medical programs. In many of these business dealings, disclosing information to competitors or to buyers or sellers during negotiations would put the University and the Commonwealth at a severe disadvantage.

Q. Who serves on the boards of the foundations?

A. Each foundation is governed by a board of directors made up of dedicated alumni and friends of the University. These distinguished individuals have demonstrated an extraordinary commitment to the University, and many bring a wealth of expertise in fields related to the foundations’ activities, such as business and finance, legal affairs, and health care administration. Each foundation lists its officers and board members on its IRS Form 990.

Q. Do all major universities rely on independent foundations to help manage their fund-raising and business operations?

A. This structure is widely used by public institutions that receive much of their support from non-state sources. The foundation model allows state institutions to strengthen and broaden their programs, to promote the real-world use of research findings, and to enter promising business ventures at no expense to the taxpayer. Private universities, by contrast, are themselves independent non-profit organizations and have the flexibility to conduct these activities on their own.