Investing away for a rainy day

By The Beacon | January 28, 2009 9:00pm

By Benjamin Taketa

If you are reading this you maybe wondering who I am, and what I am talking about. I am your student body treasurer, the official you elected to be the steward of your student association's financial resources and I am talking about our (the Associated Students of the University of Portland) financial savings. We have none. Over the course of 20 years our organization has spent over $7 million and we have saved nothing, not a single dollar. Savings is essentially putting aside some of what you produce for the future. This current budget cycle, ASUP has not allocated more than we generate in revenue. This may seem like common sense but in the past we have allocated more than what we generate in revenue. The very fact that we do that suggests that we are trying to live beyond our means.

Every semester you pay your student activity fee, which collectively amounts to about $195,000 a semester. These fees are used to fund student organizations and other student events on campus. Every year, inflation has a degrading effect on our purchasing power; student organizations can buy less with the same amount of funding. There are also more student organizations, increasing the demand for funding.

A solution to our long term financial issues of inflation and increasing demand may lie in the concept of the time value of money. ASUP is currently working on a resolution that will revolutionize the way we steward our student government fees. Carryover is the amount of unspent funding each semester. It has been as high as $80,000 in the past. The resolution is proposing the allocation of all unspent funding into an endowment that will be invested by the same financial institution that manages the schools endowment. This endowment will provide us with a 4.5 percent distribution every year and provide more funding over time than if we spent all of the funds at once. Theoretically our organization will be in existence forever and as a financial advisor and a major in finance I am surprised that this type of fiscal responsibility has not been implemented in the past. Preliminary investigations into feasibility have shown this to be a viable and attractive option. I am writing this letter to increase student awareness and get more Beacon coverage as this exciting and historical event unfolds. If you would like to know more, or get more involved, talk to your ASUP Senator or stop by the ASUP office in St. Mary's.

?Benjamin Taketa is ASUP ?Treasurer?


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