WEEF is good but only if you pay.

An issue has been brought up in my class forum. Just what is our money doing for the endowment fund and the school?

Good questions:
“From what I understand WEEF is run by putting student donations in one big investment, and using the interest from that to provide services for engineering students and projects.
So, a few Questions:
1. Is that true?
2. If so, how much is in there right now?
3. What amount of interest is obtained/how frequently? ”

Reply from the WEEF director:
“1. Is that true?

Yes, WEEF stands for Waterloo Engineering endowment Foundation. So, all thedonations are put in the principle and only the interest is spent.

2. If so, how much is in there right now?

Total principle is just about $6.5 M right now and its increasing by everyterm.

3. What amount of interest is obtained/how frequently?

Every year we spend a certain percentage of the principle amount. This is theAllowable Expenditure Rate of the Endowment Principal. An amount equal to theConsumer Price Index (CPI) of the previous year times the current EndowmentPrincipal is directed into the Endowment Principal to protect against inflation.If investment income exceeds the Allowable Expenditure Rate the excess will bedirected to the Reserve Principal. If the investment income is less than theAllowable Expenditure Rate the funds will be drawn from the Reserve Principal.

This year we will spend over $220,000. The funding spent will increase year byyear as the principle will grow. World class teams like UWAFT, Midnight Sun,formula SAE get a significant amount of their funding from WEEF. WEEF alsoprovides funding to departments for several upgrades. Such as new softwares,lab equipment and computers, upgrades to student machine shop.”

A budget of $220,000 for 2005 can be earned from a 6.5 million dollar trust fund returning 3.4% interest. Surely we can do better than that!

The annual budget has been increasing; up from $170,000 in 2004 and $140,000 in 2003.

Assuming the fund returns 3.4% interest. To compensate for the inflation rate of 2.2%, investment income should equal $143,000 or donation from 1906 students. Most students don’t collect a refund. 1906 is less than half the student body. Investment will definitely continue to grow.

When will it ever be enough? The intended budget of $80,000 this term can cover only 35% of proposals. Free money will always create more demand than resources available, but there is only so much one can ask for within reason. Will we get department yachts in 10 years? Before then, an eruption in the student body is more likely. Why should students continue to pay $75 in full when WEEF is already sitting in a multimillion dollar pool? This investment must plateau at some point, or do we want the biggest student run endowment fund in the world? WEEF expresses no signs of slowing down any time soon. Their repetitive and pathetic propaganda might get them somewhere with first year students, but my money is better spent on sour grapes, thanks.