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Report 2004: Financial Review

During the 2003–04 fiscal year (ending August 31, 2004), the Hoover Institution expended $32.4 million on its programs and activities. Of these expenditures, $30.7 million was allocated to the base budget and $1.7 million was allocated for special and capital project outlays, which were funded by revenues specifically restricted to projects not within the base budget.

In 2003–04, funds amounting to $32.1 million were available to support the base budget (see chart 1). This resulted in a $1.4 million base budget surplus for the year. Of that surplus, $1.0 million was designated for the Library and Archives Base Reserve Fund, available to the director of the Institution to assist in funding the Hoover Institution Library and Archives; the remaining $400,000 was designated for the Institutional Reserve Fund, available to the director to assist in funding initiatives important to the Institution. At year-end the Institution had $16.0 million cash on hand to support the base budget.

Chart 1. Funding Sources--Base Budget, 2003-04 (in millions of dollars)

In addition to funds raised for the base budget, $2.1 million in gifts, nongovernment grants, royalties, and university general funds were generated for special and capital projects. The Institution ended the fiscal year with $14.6 million in reserves for such projects.

At year-end the Institution held more than $30 million in cash reserves. A portion of these reserves was earmarked for use more than three years in the future. Hence, $15 million of the cash reserves was transferred to the endowment, $7.85 million from base budget funds and $7.15 million from special and capital project funds.

Base budget expenditures of $30.7 million in 2003–04 represent a 2 percent increase over the previous year’s expenditures. Research and library and archives activities account for 66 percent of the 2003–04 base budget expenditures. Outreach, development, and the communications program amount to 23 percent of expenditures (see chart 2).

Chart 2. Budget Expenditures--Base Budget, 2003-04 (in millions of dollars)

Of the $15.6 million in expendable gifts received in 2003–04, $14.4 million was specifically allocated to support base budget activities. During the ten-year period from 1993–94 to 2003–04, the annual growth rate in base budget expendable gifts received was 13.8 percent (see chart 3).

The market value of Hoover’s endowment as of August 31, 2004, was $276 million, with an additional $15 million of current reserves held in endowment. During the course of the fiscal year, new endowment gifts of $3.1 million were contributed to the Institution and are included in the year-end endowment value. The value of living trusts as of August 31, 2004, was $9.4 million.

Chart 3. Expendable Gifts--Base Budget, 2003-04 (in millions of dollars)