Interest generated by fund supports variety of strategic initiatives
BY LORI BONA HUNT
What does U of G's new IP phone system have in common with the Village by the Arboretum, Canadian Tire, the Guelph Athletic Club and Future Inns hotel and conference centre under construction on Stone Road, the Ontario AgriCentre and the Ontario Universities' Application Centre?
The $13-million+ telephone system was paid for in part from the endowment fund created from the lease of these and other properties, managed through the Heritage Trust Fund. It's just one example of the special U of G initiatives that have benefited from the fund.
The Heritage Trust, believed to be the only one of its kind at a Canadian university, was created in 1989 by Board of Governors as a unique way for the University to pay for strategic one-time investments without having to draw on its operating budget.
“In the current funding environment for post-secondary education, we have to have innovative ways to support our strategic directions,” says president Alastair Summerlee.
The leased lands have been designated as surplus to U of G's core academic needs for the next few decades, but they can be reclaimed at each lease maturity if the University needs the land.
The lands were earmarked for development by B of G when the trust was set up and put under the responsibility of the Heritage Trust's 15-member board.
Former B of G chair Bill Brock headed the special board committee responsible for establishing the Heritage Trust and now chairs its board.
“Bill showed great vision in establishing this trust,” Summerlee says. “It was a very significant development for Guelph as a way to use our assets to raise money, and we have benefited enormously from it.”
Effectively, the trust oversees the monetization of the land assets to create an endowment. The endowment is set up so that the funds generated from the real estate are protected against inflation and continue to grow, but it also provides important dividends to the University for strategic projects.
The Heritage Trust Fund now exceeds $45 million and currently receives some $3 million a year from the long-term leases of the various properties to add to its financial base.
In addition to the endowment created to date and future growth from further funds generated by lease transactions — and from the prudent investment of the fund in marketable securities — U of G has received about $15 million in dividends from the Heritage Trust for strategic initiatives. Projects include the support of student learning in the Learning Commons, the development of the tri-university library system TRELLIS and enhanced student information and financial systems, as well as classroom improvements and renovations. The most recent project is the Voice Over Internet Protocol phone and computer system.
Summerlee notes that the Heritage Trust cannot be used to fund ongoing operating expenses, including making up for funding gaps that have resulted from inadequate government support.
“In the absence of the Heritage Fund, we would have had to either not do these projects or find the money from other sources, including the operating budget,” says Summerlee.
“The strategic projects sponsored through the interest from the Heritage Trust have made a significant difference to the institution. The University will never have a shortage of projects outside the operating budget for which it needs money.”
