University of Georgia Foundation

University Council Presentation

December 2, 2004

University of Georgia Foundation

MISSION

It is the mission of The University of Georgia Foundation to administer with fiduciary care the assets of the Foundation for the long-term enhancement of the University of Georgia; to provide volunteer leadership and assistance to the University in its development and fund-raising activities; and to provide broad advice, consultation and support to the President of the University.

University of Georgia Foundation

Why is the Foundation separate from UGA?

The Foundation is a separate not-for-profit, 501(c)(3) corporation for very good reasons:

To receive tax deductible gifts under Section 170 of the Internal Revenue Code

Flexibility More effective Investment Management Donor Confidentiality

University of Georgia Foundation

Why does UGA need gifts?

• Build endowment

• State appropriations are declining

• Gifts are vital to fill the gap

• Tuition remains low at UGA

University of Georgia Foundation

Endowment Funds Reported to NACUBO – 2003

UGA $ 397,082,000

Michigan 3,464,515,000

Virginia 1,800,882,000

UNC 1,097,418,000

Indiana 941,068,000

Florida 585,695,000

Georgia Tech 729,926,000

University of Georgia Foundation

Who sets fundraising priorities for UGA?

The University of Georgia does. UGA’s President determines which of many fundraising proposals will become University priorities. Vice Presidents, deans and department and program heads set priorities for their units, within the context of University priorities.

University of Georgia Foundation

What does the Foundation do with contributions?

Exactly what the donors tell them to.

The donor decides. Typically, 96-98% of gifts are “restricted” gifts which are designated for a particular school, college, department or program.

University of Georgia Foundation

Who governs the Foundation?

The Board of Trustees. The Board consists of 36 members including two ex-officio members. The President of the University is a voting ex-officio member and the President of the University of Georgia Alumni Association is a non-voting ex-officio member.

University of Georgia Foundation

Committees

• Executive

• Finance

• Nominating

• Compensation

• Investment

• Audit & Governance

• Development & Public Affairs

• Foundation Fellows

University of Georgia Foundation

How is the Foundation funded?

The Foundation’s operating budget comes from 5 primary sources:

Unrestricted gifts Management & administrative fees Royalties Unrestricted earnings UGA Support

University of Georgia Foundation Unrestricted Revenue by Source

For the Fiscal Year Ended June 30, 2004

Unrestricted:Gifts 1,125,844$ Unrestricted Earnings 62,776 Royalties 627,938 Admin Fees 1,810,240 Other Income * 327,254 Total Unrestricted Revenue 3,954,052$

UGA Support:Operating 349,300$ Personnel 892,060 Total UGA Support 1,241,360$

Total Revenue 5,195,412$

* includes revenues from programs/ contracts, REF payment for accounting services and other non-gift receipts.

Other Income *

8%

Unrest. Earnings

2%

Royalties16%

Gifts28%

Admin Fees46%

University of Georgia Foundation

How is the Foundation accountable?

The Foundation openly discloses information about its policies, activities, financial statements, and other information. The following items are available to the public:

Financial audit Annual report to donors Policies on disbursement of gift funds Investment policies, expenditure guidelines, and

quarterly performance reports Policies regarding the establishment of fund-raising

priorities Tax form 990

University of Georgia Foundation

UGAF Website

www.alumni.uga.edu/ugafoundation

Includes:• List of Trustees by Class• Trustee Committee Assignments• Audit Reports• Policies and Procedures Manual

University of Georgia Foundation

Policies & Procedures ManualDesigned primarily for use by UGA unit heads and the Foundation administrative officers and staff. Information available includes:

What qualifies as a gift How to transmit a gift What information is needed for a fund agreement How to expend Foundation funds How to transfer funds to UGA What is a spending budget How to request unrestricted funds from the Foundation What forms to use How to read reports

University of Georgia Foundation

UGAF Organizational Structure

University of Georgia Foundation

• UGA Alumni Association

• Costa Rica

• University of Georgia Real Estate Foundation3 Limited Liability CorporationsCortona

University of Georgia Foundation

International Properties

UGA at Oxford Center – Oxford England

• Purchased in 1999 by UGAF

• Provides housing for 28 students

• Total purchase price of $1.8 million

• Current annual rent $182,000

University of Georgia Foundation

International Properties

Ecolodge San Luis and Research Station –

San Luis, Costa Rica

• Purchased in 2002 by UGAF

• Residential research & educational facility with accommodations for 85 people

• Total purchase price of $1.1 million with renovations & capital improvements of $0.6 million

• Current annual rent is $92,000

University of Georgia Foundation

International Properties

Casa di Riposi – Cortona, Italy

• Purchased in 2002 by UGAREF

• Provides housing for 40 students

• Total purchase price of $1.6 million with renovations & capital improvements of $0.8 million

• Annual rent will be $220,000

University of Georgia Foundation Total Assets

As of June 30, 2004

Unrestricted 10,735,589$ Endowed 335,237,068 Non-Endowed 88,818,925 Deferred 17,759,246 Total Assets 452,550,828$

Non-Endowed

20%

Deferred4%

Unrestricted2%

Endowed74%

University of Georgia Foundation Balance Sheet Asset Allocation

As of June 30, 2004

Investment Securities $351,806,990 Other Investments 24,344,349 Cash & Equivalents 47,160,551 Real Property, Timber & Minerals 22,654,096 Receivables 2,544,397 Personal Property & Art 2,499,209 Other 1,541,236 $452,550,828

Investment Securities, 77.7%

Other, 0.3%

Other Investments, 5.4%

Real Property, Timber & Minerals,

5.0%

Personal Property & Art, 0.6%

Cash & Equivalents, 10.4%

Receivables, 0.6%

UGA Real Estate Foundation Financial Position

As of June 30, 2004

Assets:Cash 3,326,595$ Bond Proceeds * 40,108,103 Real Property ** 85,390,674 Construction in Progress 83,657,402 Other Assets 2,947,177

Total Assets 215,429,951

Total Liabilities 213,841,269

Total Net Assets 1,588,682$

** net of depreciation

* held for construction, debt service and other reserves.

Other Assets1%

Bond Proceeds *

19%Cash2%

Construction in Progress

39%

Real Property **

39%

University of Georgia Foundation Total Revenue by Source

For the Fiscal Year Ended June 30, 2004

Gifts 34,195,820$ Investment Return 60,653,498 Royalties 1,445,658 Admin Fees 1,810,240 Other Income * 9,137,242 Total Revenue 107,242,458$

* includes revenues from programs/contracts, Alumni Association, registration fees and other non-gift receipts.

Other Income *

9%

Royalties1%

Admin Fees2%

Gifts32%

Investment Return

56%

University of Georgia Foundation Total Expenditures by Category

For the Fiscal Year Ended June 30, 2004

Professor/Chair Support 2,745,582$ Facilities Support 1,420,298 Research Support 357,370 Center/Institute Support 1,145,698 Athletics Support 2,119,344 General Support - UGA 7,295,424 Scholarships & Fellowships 4,708,997 Administrative & Investment Fees 1,810,240 Alumni Association 1,330,316 Distributions to Beneficiaries 2,218,305 Partner's Fund 222,306 Academic Prog./President's Off. 2,226,853 External Affairs - Development 836,098 General Operations - UGAF 1,331,960 Total Expenditures 29,768,791$

General Operations -

UGAF4%

Scholarships & Fellowships

16%

Administrative & Investment Fees

6%

General Support - UGA26%

Alumni Association

4%

Distributions to Beneficiaries

7%

Partner's Fund1%

Athletics Support7%

Facilities Support5%

Professor/Chair Support

9%

Center/Institute Support

4%

Research Support1%

Academic Prog./President's

Off.7%

External Affairs - Development

3%