RF Uses Funds for Corporate and Investment Reserves

RF Financial Concepts 101 

Understanding the Business of the RF

Module 2: Understanding How the RF Uses Funds

RF Uses Funds for Corporate and Investment Reserves

Like many corporations, the RF maintains a corporate reserve to cover cash flow and contingency needs. The corporate reserve has primarily been used to cover major system initiatives, such as technology system upgrades.

The RF also maintains an investment reserve that was created to lessen the impact to campuses from fluctuations in investment rates of return. The investment reserve was established to help ensure campuses receive a known, predictable and constant distribution of investment income as part of their annual allocation from the RF. 

What the Data Shows

In 2015, the corporate reserve is expected to be allocated $2.3 million from investment income.   The RF’s board of directors agreed on a goal to maintain the reserve at 10% of indirect cost recoveries.  At the end of FY 2015, the reserve is anticipated to represent 7% of indirect cost recoveries.

Investment income will also fund $6.9 million in 2015 to the investment reserve. The RF is rebuilding the investment reserve by allocating investment income to the reserve until the losses that resulted from down markets have been recovered. No distributions are being made to campuses.

RF funds from the corporate reserve are used to cover major infrastructure initiatives like technology system upgrades.

Where to Find More Information 

Please refer to the 2016 Operating Plan.