Report of the President: 2012 - UWC-USA

Report of Financial Activities
rEpOrT OF FiNANCiAL ACTiViTiES
UWC‑USA ended its fiscal year with a modest
surplus. Careful cost containment as well as ap‑
propriate revenue forecasting from the Business
Office allowed the school administration to ac‑
curately plan educational programming for the
year, as well as to project years into the future.
Financial planning at UWC‑USA is unique
compared to other secondary schools, just as
our educational mission is unique.
Payments from the respective national commit‑
tees that select our international students only
account for 17 percent of the school’s annual
budgeted revenue. Voluntary contributions to
the Annual Fund—from friends who believe in
our mission, including community members,
parents, and alumni—make up the next 15
percent. Mission‑oriented summer programs,
such as International Baccalaureate teacher‑
training and short courses for global youth,
made up 4 percent of our revenue last year.
For the past decade, the biggest source of
annual school revenue has come from the
UWC‑USA endowment, which last year com‑
prised 43 percent of our annual budget. This
extraordinary achievement is a testament to
the commitment of a great number of people.
Philanthropist Shelby Davis contributed the
largest part of our endowment, but numer‑
ous other friends have contributed as well,
strengthening our mission for future genera‑
tions of students.
Alumni gifts to the Annual Fund are almost
five times what they were five years ago, and
participation rates have more than tripled. Not
only that, but in the past five years our gradu‑
ates have given extraordinary gifts, in several
cases as large as $250,000. We’re doing what
we can to continue to provide opportunities for
promising young people regardless of country
of origin or ability to pay.
Now, for the challenging news. We are in the
final year of full support from the Armand
Hammer Trust, which last year contributed 21
percent of our budget. We’ve known for nearly
a decade that the 2013‑2014 school year will
represent a financial watershed, when a big
portion of our budget will have to be made up
somewhere else.
The administration of UWC‑USA, in coop‑
eration with the school’s faculty and staff, has
worked diligently to contain costs in anticipa‑
tion of next year. They’ve renegotiated large
contractual costs such as insurance and food
service, seeking savings wherever possible.
One place the Board of Trustees does not want
to cut, however, is the quality of teaching.
When more than 50 percent of your school’s
expenses come from salaries, there are a lim‑
ited number of savings opportunities available
without hurting the quality of the school’s ed‑
ucational mission. We do not believe we can
“cost cut” our way to either financial or educa‑
tional excellence.
We plan to address the budget shortfall in the
2013‑2014 year and beyond through an “all of
the above” approach: We have redoubled our
fundraising efforts, we are increasing payments
from UWC national committees where pos‑
sible, we are initiating mission‑oriented ancil‑
lary programs, and we are engaging the entire
campus community in cost‑saving measures.
As the chair of the Finance Committee and a
graduate of UWC‑USA, I am optimistic about
the school’s financial future, despite the ex‑
haustion of the Armand Hammer Trust.
UWC‑USA has been fortunate in its first 30
years to benefit from the extraordinary gen‑
erosity of two world‑class philanthropists, Ar‑
mand Hammer and Shelby Davis. In my mind,
Hammer and Davis are legendary philosopher
kings, really, of international educational phi‑
lanthropy. They built this place. Hammer locat‑
ed the campus around the stunningly beautiful
but neglected Montezuma Castle, halfway up
a hill. Davis built the school’s endowment and
enabled us to lovingly restore the Castle and
make it our school’s vital center.
Philosopher Kings also built the Angkor Wat
temple in Cambodia, the pyramids in Egypt,
Versailles in France, and Chichen Itza in Mexico.
But what’s different now from those times is
that we no longer live in an era that waits for
a single great man to build something beauti‑
ful for posterity. So we must ask: In the coming
decade, who is going to build the next Mont‑
ezuma Castle?
It’s going to be us. The friends, families, and
alumni who believe in the mission of UWC‑USA
will play a crucial role in ensuring the values we
believe in—of making education a force to unite
people, of giving students experiences and tools
to have real and lasting impact, of creating a
sustainable and peaceful future—will continue
on in perpetuity. And that’s the way it should be.
Michael C. Taylor, UWC‑USA ’91
Chair, Finance Committee
of the Board of Trustees
SOURCES OF FUNDING FY12
National Committee
Contributions
Summer Programs/
Auxiliary Income
Endowment Income
Philanthropic
Contributions to
Annual Operations
2011 2012
Philanthropic Contributions to
Annual Operations $1,548,039 $1,527,124
Armand Hammer Trust * 2,250,000 2,250,000
Endowment Income 4,913,508 4,488,928
National Committee Contributions 1,434,700 1,818,200
Summer Programs/Auxiliary Income 470,344 455,947
TOTAL rEVENuES $10,616,591 $10,540,199
*Income from the Armand Hammer Trust will cease in 2013.
Facilities
General
Administration
Invested in Endowment
Endowed
Scholarships
for U.S. Davis
Scholars
studying
at other
UWCs
Armand Hammer Trust *
USES OF FUNDING FY12
Educational Programming**
2011 2012
Educational Programming** $6,942,689 $7,157,331
General Administration 902,816 1,119,055
Facilities 1,019,930 1,151,368
Endowed Scholarships for U.S. Davis Scholars
studying at other UWCs 1,026,424 1,016,987
Invested in Endowment 724,732 95,458
TOTAL EXpENSES AND TrANSFErS $10,616,591 $10,540,199
** Includes funds used for carrying out academic and co-curricular programs, including
compensation and support for employees who facilitate these programs.
4 UWC-USA : WWW.UWC-USA.ORG
REPORT OF THE PRESIDENT: 2012 5