SAC invests funds, elects new board

The Student Activities Council will invest $200,000 of reserve funds to boost future spending. Instead of relying completely on the University for its funding, the Student Activities Council is beginning to take matters into its own hands. At its meeting last night, SAC voted to take the approximately $200,000 it has sitting in a "reserve fund" and invest it through the University. SAC officials estimated they would get a 7 percent to 10 percent annual rate of return on their investment. SAC members also elected five members to the body's executive board in its semi-annual elections. The origins of the reserve fund are "unclear," according to outgoing SAC Executive Board Chairperson Steve Schorr, a Wharton senior. It contains funds allocated to SAC groups that were not spent during the academic year. Investing the fund will let SAC earn a return on the money, Schorr said. "We'll have an extra $15,000-20,000 a year on top of what the [Undergraduate Assembly] gives us, essentially for forever," said Schorr, a Daily Pennsylvanian columnist. He indicated that the money will be invested with the more than $2 billion in liquid assets in the University's endowment. While the interest every year will be spent on student activities, he said that "the principal will not be touched" to ensure a consistent supply of funding. Schorr maintained that the investment would be completely safe. Last Friday, however, the University announced a loss of $40 million on its investments during the first five months of the 1998 fiscal year, which extends from July 1, 1997, to June 30, 1998. The University recouped its losses during the month of December. Despite the fluctuations, Schorr expressed confidence in the University's investment success. "I believe it would be risk-free because the University doesn't want us to lose it," he said. However, not all SAC members were sure that the plan is fiscally sound. "When you find me a risk-free investment that pays 10 percent a year, call me," said first-year Wharton graduate student Alex Evis, the SAC representative from Arts House. Nevertheless, SAC passed the plan with only two dissenting votes. William Turner, the director of financial services in the Office of the Vice Provost for University Life, said the VPUL and SAC were still weighing the "advantages and disadvantages" of their options. He added that the terms of the SAC plan -- which would make the reserve fund into a "quasi-endowment" -- should be finalized next week. Turner also said that the investment should be safe given the "diverse pool of investments" in the endowment. Schorr also noted that there were still some unresolved issues dealing with how quickly SAC could draw on the reserve fund if it needed to during the year. Also at last night's meeting, SAC elected five members to its nine-member executive board. SAC bylaws call for four members to be elected to year-long terms in October and February. One additional seat was open for a half-year term due to the resignation of College junior Vanessa Moses. College junior Olivia Troye of Arts House and College sophomore Chaz Howard, a member of the a cappella group The Inspiration, were re-elected to the board. They will be joined by three College juniors -- Katie Cooper of the Penn Environmental Group, Cathy Hwang of TEACH West Philadelphia and the International Relations Undergraduate Student Association's Amy Raphael, who will serve the rest of Moses' term. All three are juniors in the College. The new board will elect its chairperson Monday.