UofL’s Faculty Senate informed of $82 million in available funding through UofL Foundation

UofL’s Faculty Senate held its latest meeting Jan. 12, during which senators received updated enrollment figures, student retention rates, a budgetary overview for the university and information on the $82 million in available funding for academic units through the University of Louisville Foundation.

Interim President Lori Gonzalez provided senators with current student enrollment and retention figures. A decline in undergraduate enrollment compared to last year was reported. Gonzalez said that administration anticipated this decrease and despite the current dip in student enrollment, current figures for the fall 2022 term show promise. Figures for the fall 2022 semester include a 6% increase in student applications, 14% increase in admissions and 30% increase in deposits.

Gonzalez further reported an increase in student retention rate of 91% from the fall 2021 to spring 2022 semester, improving upon the 86% student retention rate reported the previous year.

“Our fall to spring retention for first-year students is back to pre-pandemic levels, which is pretty amazing,” Gonzalez said. “Getting back in class and having the right kind of experience, I think, has made a big difference.”

Dan Durbin, executive vice president for finance and administration, and Keith Sherman, executive director and chief operating officer of the University of Louisville Foundation, presented information on the university budget and available funding currently offered through the foundation. Durbin provided an overview of the university’s $1.3 billion budget for fiscal year 2022. General or unrestricted funds are used to cover the unrestricted operating expenses incurred by the university; this funding accounts for about 40% of the institution’s total budget.

“Our unrestricted funding is made up of tuition, fees and state appropriations. Tuition and fees are influenced by external and internal factors, so we have very limited latitude when it comes to increasing unrestricted operating funds from tuition and fees,” Durbin said. “Our state appropriation is about $130 million a year; $127 million of that is base, and we have to earn the other $3 million through the Performance Funding model, so that $3 million is always at risk.”

Performance funding is reallocated each year based on each university’s performance relative to other institutions in the state. UofL performed better than the sector average in seven of the 11 performance metrics used to determine state performance funding. Despite a slight increase in 2022, state funding for the university has generally declined over the past decade.

The university’s general fund budget will soon face several significant challenges, including inflation, employee compensation increases and the 2025 demographic cliff projected to impact higher education enrollment and institutional aide nationwide. As neither state allocation nor tuition increases can meet these financial obstacles fully, units have been encouraged to take advantage of the $82 million that is currently available through the University of Louisville Foundation.

Sherman reported the total foundation funding, which includes both endowment and current use funds, is available to each UofL school and college. Senators were also provided with a recommended order of spending for all funding, both restricted and nonrestricted, to reduce general fund spending and maximize UofL’s budgetary efficiency.

“Grant monies typically need to be returned to the grantor if you don’t spend them, so you should spend those funds first. Then go to your restricted endowments and your restricted non-endowed gifts [before spending] your unrestricted money. Your unrestricted money is gold because you can do anything you want with it. We recommend spending unrestricted gifts before your unrestricted endowments because non-endowed gifts don’t grow.” said Sherman.

Committee reports and a video recording of the meeting can be accessed on the Faculty Senate meetings webpage. The next Faculty Senate meeting is scheduled for Feb. 8 and will take place remotely via Microsoft Teams.