In the midst of repeated cuts in state funding to the state’s higher education institutions, the University of California experienced growth in endowment funds last fiscal year, potentially providing additional financial support to students and faculty.

The UC’s endowment assets — which are composed of money or property that is donated to the university — experienced a rebound of nearly $1 billion in the 2009-10 fiscal year. This could affect students financially and academically by providing faculty with additional support and students with more financial aid options in a time of declining state support, according to David Blinder, UC Berkeley associate vice chancellor for university relations.

“With state support declining, we are encouraging private donors to give private support,” said UC spokesperson Steve Montiel. “Private support is necessary, even more so with these times. It’s never been seen as a replacement for state funding.”

According to Blinder, after the stock market crashed in 2008, the UC’s endowments dropped nearly $1.8 billion, and the campus’s endowments dropped over $540 million during the 2008-09 fiscal year. The rebound for last fiscal year resulted in a growth of over $255 million for the endowment at UC Berkeley, according to the UC Annual Endowment Report for the fiscal year ending in June 2010.

According to the report, the total UC Berkeley endowment value rose from a total of approximately $2.35 billion in 2009 to approximately $2.6 billion in 2010. According to Jose Rodriguez, campus endowment campaign spokesperson, the 2010-11 fiscal year’s audited endowment value will not be known until October 2011.

According to Rodriguez, spendable funds are pulled from the endowment income, not the endowment principal.

Blinder said funds from the endowment are used for everything from basic campus operational costs to funding fellowships and scholarships both in academics and sports. Students benefit from endowed funds through the campus’s ability to support its faculty and through financial aid endowments, he added.

“When we have endowments for faculty support, we are able to compete with the very best universities across the country for recruiting faculty and also retaining faculty,” he said. “Berkeley is always a favorite target among the wealthier private universities for outstanding faculty.”

According to Rodriguez, UC Berkeley’s total endowment is composed of two parts. The UC Board of Regents — which manages an endowment for the whole UC system — manages a portion of the systemwide endowment that goes to the campus, and the UC Berkeley Foundation manages the other portion of the campus endowment.

Blinder added that roughly two-thirds of the campus’s endowment is managed by the board and the other third is managed by the foundation.

According to Blinder, fundraising for endowments is done on a campus-by-campus basis rather than as a collective effort throughout the UC. He added that fundraising for the campus endowment has been a challenge.

“(Raising awareness is) a challenge for us because, unlike our private peers who have for a very long time been sending a message out about the importance of endowment-giving, our constituencies have always thought that the core operations of the university are so generously funded by the state,” he said.

Over the course of the campus endowment campaign — The Campaign for Berkeley — hundreds of millions of dollars have been given in the form of fellowships and scholarships support, Blinder said. Those are directly benefiting the students who are either coming to the campus or are already here and depend on that support.

Looking to the future, Blinder said he expects that the endowment will continue to grow as donors become more aware of the importance of endowment-giving in light of decreased funding from the state.

“I’m sure it will (continue to grow) as the word gets out about how the state has been pulling back its support of the UC system,” he said.

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