Although the Ohio University Foundation is expected to continue recovering from the hit it took during the Great Recession, the foundation's total worth will not likely increase by as much this fiscal year as it did last year, according to a university official.
After a dip in net assets - the foundation's total value - from fiscal year 2008 to 2009, its net assets increased 21.83 percent from about $266.6 million to about $324.81 million during the last fiscal year, according to the OU Foundation's most recent audit.
Part of the reason for increase in net assets is the sale of Diagnostic Hybrids, Inc. last February. The OU Foundation received $35 million from the sale in fiscal year 2010 and expects to receive another $6.2 million next fiscal year, according to the audit.
"We do expect total net assets to increase. The market has continued to recover," said Mike Angelini, associate vice president for Finance. The foundation's net assets will not increase as much from fiscal year 2010 to 2011 because it will not receive any payments from the Diagnostic Hybrids sale this fiscal year, he added.
As the OU Foundation continues to rebound from the economic crash in fall 2008, the university is looking to the foundation to help fill the hole left by a decline in state funding.
OU's deficit reduction plan, which was released Wednesday, lists new investment income as one way the university plans to offset a possible $27 million cut in state funding, a $5 million rise in health care costs and a $600,000 increase in utilities. Angelini called the foundation's $3 million contribution a conservative estimate.
Investments have increased by 12 percent this fiscal year, and the value of the foundation's investments has surpassed their original cost, Angelini said.
At the end of fiscal year 2010, OU's investments were valued at about $270.84 million, but the university paid about $271.77 million for the investments - a difference of $925,965, according to the audit.
OU's investment portfolio includes common stock, bonds, commodities and real estate, among others.
The OU Foundation's investments have been "positively impacted" by the recent stock market recovery, Angelini said, later adding that like other university foundations, OU is still recovering.
"We are not alone," he said. Angelini also said he expects the foundation's financial outlook to continue improving.
The foundation's income from investment increased 299.25 percent from fiscal year 2009 to 2010. It earned about $25.95 million from investments it sold during fiscal year 2010, while it lost about $13.03 million the previous year.
"We actually had a really good year last year," Angelini said.
The foundation's underwater accounts have also bounced back with the stock market. The accounts are endowment funds that have been invested and lost money. Endowments primarily fund scholarships but also used for instructional salaries and discretionary funds.
During fiscal year 2010, the OU Foundation had about $8.95 million in underwater accounts. As of Dec. 31, that number had to decrease to about $400,000, Angelini said, adding that this currently affects only about 50 of OU's 12,000 endowments.
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