Gifts to academic programs at the University of Louisville fell by 25 percent from $84 million to $63 million in the recently ended fiscal year, and now five staffers have been cut from the department that handles fundraising for the university.
UofL spokesman John Karman tells IL that five “support staff” positions were cut last week in the university advancement department as part of a reduction in force and “ongoing university belt-tightening related to the budget shortfall.” This amounts to a 6 percent reduction of staff in the department, which now 76 employees. Karman has not yet been able to answer how many UofL staff and faculty have been laid off since the beginning of the new fiscal year and since the university’s budget shortfall was announced in February.
Once UofL’s $48 million shortfall was disclosed by interim President Greg Postel in February, the university initiated expense cutting measures as they crafted a budget for the next fiscal year, which was to include a salary freeze for faculty and staff, deferred maintenance, and a hiring “frost” in which no more than 25 percent of vacancies would be filled. However, Postel told UofL trustees that month that there would be no need for large-scale layoffs of employees or closure of academic programs.
This staff reduction in advancement took place before Tuesday’s meeting of the UofL Foundation board of directors, in which outgoing vice president of university advancement Keith Inman presented the final figures on philanthropic giving to the university in the fiscal year ending June 30. Inman said the $21 million drop in gifts was the worst decline he had seen in his time leading the department, which will end on Aug. 1 when he takes over as president of Kosair Charities.
While gifts from small donors went up in the last fiscal year, Inman noted that several of the university’s largest regular donors — such as the James Graham Brown Foundation and the David Jones Sr. family — still are waiting on the sideline as the foundation completes its extensive reforms efforts to restore the confidence of major donors. A chart presented by Inman showed that the number of gifts exceeding $25,000 to UofL fell from 234 to 193 last year, while the number of gifts exceeding $1 million was cut in half from 16 to eight.
The UofL Foundation that manages the funds raised for the university’s endowment has been heavily criticized over the past year for mismanaging those assets, with last month’s Alvarez & Marsal audit report showing overspending and bad investments by the former administration of the foundation depleting the value of the endowment by at least $40 million. As a result, foundation spending on academic programs has now dramatically decreased, and the top three foundation staffers under the administration of former President James Ramsey have been forced out.
Inman told reporters after his presentation to the foundation that it was “impossible to say” whether this decline in philanthropic giving to UofL is because of the past two years of scandals plaguing the university, but “we’ve never had anything like this affect us. This is the worst.” He also told the foundation directors that in order to restore the confidence of major donors, UofL leaders must do a better job of highlighting the university’s many successes and overall vision in the face of the current negative headlines, and that wealthy foundation board members and university trustees should set an example by visibly making “significant gifts” to the university.
Both the foundation’s interim director Keith Sherman and board chair Diane Medley have expressed confidence that major donors currently sitting on the sideline will return once their reform efforts are complete. Acknowledging that the top three staffers at the foundation from the era of the A&M report are now gone — Ramsey, his top aide Kathleen Smith and CFO Jason Tomlinson — Medley on Tuesday called this “a new start” for the foundation as it is “working to change the culture and change the processes that have gone on here.”
This story has been updated.