Despite the current economic slowdown and an $8 million bill on the horizon, the University of Winnipeg is still vowing the scholarships and bursaries students receive annually won’t decline and is pushing ahead with capital expansion projects.

However, a spending freeze is in place and some projects might need to be scaled back.

Last year, the University of Winnipeg Foundation gave out $1.1 million in endowment revenue, close to 85 per cent of which went towards scholarships and bursaries, chairs and fellowships.

Although the economic pickle might make it difficult to keep this up in 2009/2010, the university is doing everything in its power to maintain these numbers.

“It’s a priority for the university,” said U of W’s director of marketing and communications Shawn Coates.

The endowment funds of universities across North America have drastically declined in recent months.

The University of Toronto might not be able to pay the $62 million it had promised to dole out come April—the cash was earmarked for everything ranging from hiring and research to student grants—and Harvard’s endowment fund has lost about US$8 billion so far.

U of W is facing a similar situation, but instead of providing less money for scholarships and the like, the Foundation has decided to encourage direct donations rather than endowment donations, Coates said.

Whereas endowment donations are invested and only the interest is paid out, direct donations are paid out immediately in a lump sum. In other words, endowments keep on giving and direct donations are a one-time thing.

Donors can choose their donation types in combination, Coates said.

“ We have to even more diligent and more prudent with our spending and our costs.

Shawn Coates, U of W Communications

“It’s a sort of short-term measure,” said University of Manitoba associate professor of economics Ian Hudson of the push for direct donations. “I can see why the university would do it. I guess what they’re hoping is the downturn is pretty short.”

If the university expects the return on investments wont be big during the recession, then not paying into an endowment fund for a year or two wont really affect the bottom line, he said.

Unfortunately, the university can’t be sure until the end of August or beginning of September whether their pleas for direct donations will work to ward off declining scholarships, Coates said.

Yet scholarships and bursaries are only a fraction of the Foundation’s gifts to the university.

The Foundation is currently trying to raise $70 million for their A World of Opportunity Capital Campaign, for which $63 million has already been raised.

The campaign supports various initiatives including the new Richardson College for the Environment and the Opportunity Fund, which seeks to facilitate the enrolment of impoverished youth in university.

Yet some projects might have to be altered due to the economic climate, Coates said.

“There is that chance. That is a realistic possibility, and I wouldn’t use the term half-completed buildings, but maybe you have to change the scope of your project, so maybe a building has a few less labs or its scaled down a bit.”

While the Foundation is still raising funds for the science complex, construction is on schedule, he said.

It is common for the funds for a capital expansion project to not be raised before the project gets the go ahead, Coates said.

However, he did not rule out the possibility that the complex might have to open a year later.

The university was also rocked by an $8 million bill recently after it lost a court case surrounding choices it made with the employee pension plan eight years ago.

For comparison, U of W’s annual budget is about $100 million.

In 2001, $6.5 million was deducted from the pension plan. At the time there was a surplus, but the money dwindled after 9-11.

The $6.5 million has grown to $8 million with interest.

U of W’s vice president of finances Bill Balan was unavailable for comment.

As a result, the university stopped hiring for vacant jobs and all discretionary spending.

“We have to even more diligent and more prudent with our spending and our costs. The university has been mindful of its spending for a long time, but even more so now,” Coates said.

Published in Volume 63, Number 20 of The Uniter (February 12, 2009)