Arkansas Business reports that the University of Arkansas, for now, will not take a percentage from its charitable donations to pay for its fund-raising and marketing operations.
The advancement division ran so deeply in the red that Chancellor David Gearhart reassigned a top official, demoted another and has instituted cost-cutting to correct the problem and balance the budget.
In an email sent to campus deans on Thursday, Chancellor Dave Gearhart said the UA will work to cover the deficit in other ways. That includes a mix of budget cuts, hiring freezes, money transferred from within the university and what is described as "unrestricted funds." UA Spokesman John Diamond said the unrestricted funds include money from donations that not are earmarked for a specific college or purpose.
It is possible the gift recovery fee will be implemented for the next fiscal year (2013-14) as the UA continues working toward the launch of a new capital campaign. Gearhart projected $1.5 million could be generated if the fee were implemented this year, but that plan was abandoned for 2012-13.
The UA compiled for me a pro forma budget for the various elements of this arm of the university that illustrated how badly the budget was busted by excessive salary expenditures. Spending exceeded budgeted amounts in the advance division by more than $5 million in fiscal 2012 ($2.6 million in excessive salaries in university development salaries alone), which ended June 30. Because of contributions from the private foundation to the division exceeded expected expenses to be paid from that source by $1.8 million, the bottom line deficit was reduced to $3.2 million.