Originally Posted by brendanp

that makes sense, though it doesn't seem like an actual donation. i guess if its 10-20, people would be less likely to go through hassle of getting the opt-out cheque. its a great idea though, one of the best and most attainable i've seen in the platforms.

I am glad you think so

I think the endowment fund is one of your best platform points. I was really interested in it when I heard you talk about it at the debate yesterday. We need good ideas like that at this school.

Definitely a unique platform point to set him apart!

Had the doors held open for me again today.. very nice

There are a few issues with the endowment fund. I have put in quotes to separate the financial ones:

A=Amount or future value
P=Principal or present value
r=Annual interest rate (decimal)
t=Time in years R=Investment per compounding period
m=Number of compounding periods per year (annually would be one)
i=Rate per compounding period (equal to r/m)
n=Total number of compounding periods
Interest in the first year: A=P(1+rt) A=200000(1+.025*1) A=200000*1.025=$205,0 00

Interest in the sixth year, assuming all interest to this point was completely withdrawn: A=P(1+rt) A=1200000(1+.025*1) A=1200000*1.025=$1,23 0,000 Is what we will have.

Confused?

The main one you need to pay attention to is the second one, as it lists the interest for the sixth year. It is written out in the complete formula instead of the basic 1.2kk*1.025 way, incase you need to make any adjustments to the numbers down the road. Interest=Future-Principal (30000=1230000-1200000) I also provided the last formula incase you ever needed to calculate all of the interest if you reinvested the interest earned each year, but again, focus on the second formula.

The amount we get is (just to be clear) is: A=1200000*1.025=$1,23 0,000 Meaning the interest accumulated payment in the sixth year is definitely $30,000

*Assuming that you don't withdraw but reinvest for the 6 years)

Compound interest (interest is reinvested) - This isn't a possibility you mentioned, but I am providing it so you have the full picture: A=R(((1+i)^n)-1)/i) A=200000((1.025^6)-1)/.025) A=1,277,547.35 As you can see, by reinvesting the interest every year, instead of withdrawing it, you would earn an extra $47,000 over six years.

Hence in other words the amount you have in 6 years is 12,000* rate of interest. For the above calculations I assumed 2.5%(Which seems fair for a low risk investment)

You have to realize that this not so big amount of money will be contested for by ALL faculties and not just engineering(which has a similar net figure today due to a larger initial fee)



Issue #2: The Engineering fund started in 1998, It took a decade for it to be able to give substantiative returns. I do NOT think McMaster students in general are altruistic enough to fund something they won't see any noticeable returns for till they graduate(even first years). I do not see the referendum passing.

Issue #3: Biggest issue of all, endowment fund from what I understand is supposed to be used for academic equipment or other equipment to benefit students. In my two years as a Sociology and Econ student I cannot imagine how and why I would require equipment or any funding of any sorts. SocSci also has a awesome research grant program that provides upto $3000 of funding for research, they pretty much covers anything we need as subjective students. We do not use learning aids or require expensive equipment, similarly my Econ Experimental lab program is very well funded as well. I can imagine most Liberal Arts students not needing this money, same with a number of other programs.

This program while from your perspective sounds like a good idea will just be a stream of money being taken from Arts students and being transferred to Engineers & possibly Science. Even if there is need for Arts students because of the competition I don't see how someone will not give Engineers Workshop/Technical equipment and instead give it to a Arts kid to travel and compensate people for their time. I feel as if It is useful for Engineers because of the way your program requirements are structured & your methods of learning.

Hi Huzaifa,

Thank you for presenting the context. I have responses to each of the issues you have presented. I'm a bit busy to answer it right now, but I've been looking forward to answering questions about this "controversial" idea, especially a post like yours. I promise, I will get back to you later today.

Originally Posted by huzaifa47

This program while from your perspective sounds like a good idea will just be a stream of money being taken from Arts students and being transferred to Engineers & possibly Science. Even if there is need for Arts students because of the competition I don't see how someone will not give Engineers Workshop/Technical equipment and instead give it to a Arts kid to travel and compensate people for their time. It is useful for Engineers because of the way your program requirements are structured & your methods of learning.

As an Arts student I will contest this point. Maybe you don't know enough about the variety of programs offered by McMaster.

I know that the Multimedia program could definitely use money for equipment, computers, software, cameras etc. We are an arts program that relies on equipment.

Not to mention Music programs, as well as the visual/studio arts programs could also probably use money for equipment and supplies. There are labs and studios on campus that can always use money for upgraded equipment and supplies. Did you know there is an Art studio on campus with printing presses etc and a variety of other equipment students in that Arts program use as part of their education? Did you know we have a recording studio on campus that requires expensive equipment for use?

The Humanities faculty definitely has programs that require funding for supplies in similar ways to Sciences/Engineering and its definitely needed. It would be great if Arts programs could actually be recognized as needing funding for equipment the way other programs like Engineering are. I like that Ash is taking an idea that has benefited his program and would like to apply it campus wide.

Also I know it wouldn't benefit me but knowing how expensive the equipment we use in our program is and knowing how often computer equipment and software needs to be upgraded I would definitely be interested in paying a fee that would help future students at McMaster have the tools necessary for a good education. If it is as mentioned a $10-20 dollar fee that's not too much to pay in my opinion, and I know if we had that now I'd appreciate it but forward thinking isn't a bad thing. There are certainly fees I pay now that I don't think are beneficial to me personally but I pay them and some of them probably benefit other students, which is fine by me.

Ash will obviously be rebutting your post later but when I read that Arts programs don't need this I had to comment and say yes, they definitely do.

Originally Posted by sew12

As an Arts student I will contest this point. Maybe you don't know enough about the variety of programs offered by McMaster.

I am aware of that fact, Multimedia/Communications Studies/Fine Art are one of the few programs students that can benefit from it. But There still is a majority that "comparatively" will not benefit, I for one will not definitely benefit from it in the 1/2 more years I have(Remember this will start in 2011 if approved).


Plus you are here for how much more longer? 1 year? 2 year? Please calculate the interest payments for that period; People who will not significantly benefit from it unless the plan gets a kickstart by dipping into the multimillion dollar MSU Capital Account will be against it, not everyone unfortunately believes in alturism, I can imagine Engineers or Multimedia students empathizing with the people in their program and contributing, but A Political Science student for example? . Also the interest I calculated was $30k after 6 years, which isn't significant.

But yeah I am looking forward to Ash's reply!

Originally Posted by huzaifa47

I am aware of that fact, Multimedia/Communications Studies/Fine Art are one of the few programs students that can benefit from it. But There still is a majority that "comparatively" will not benefit, I for one will not definitely benefit from it in the 1/2 more years I have(Remember this will start in 2011 if approved).


Plus you are here for how much more longer? 1 year? 2 year? Please calculate the interest payments for that period; People who will not significantly benefit from it unless the plan gets a kickstart by dipping into the multimillion dollar MSU Capital Account will be against it, not everyone unfortunately believes in alturism, I can imagine Engineers or Multimedia students empathizing with the people in their program and contributing, but A Political Science student for example? . Also the interest I calculated was $30k after 6 years, which isn't significant.

But yeah I am looking forward to Ash's reply!

I really think you're missing the point of an endowment fund. You're not going to benefit from it in a year or two. You're correct. But that's precisely how an endowment fund works. You have to build capital before you can reap the rewards. So while you may not benefit from it in the next two years, the students of years to come will definitely get something out of it. Don't be so narrow minded and selfish.

Correct me if I'm wrong - but I believe thousands of students paid into the student centre fund before it was even built. Why? Because it was going to improve student life for students in the future.

MACLAB gave out about $9000 in its first year - and it's now up to $60000 or so just over 10 years later. One year it even gave out almost $100k because of unused funds. That's in 10 years from a faculty of 3000 students. Imagine the power of 20,000 students and some great ideas.

Originally Posted by DavidR

I really think you're missing the point of an endowment fund. You're not going to benefit from it in a year or two. You're correct. But that's precisely how an endowment fund works. You have to build capital before you can reap the rewards. So while you may not benefit from it in the next two years, the students of years to come will definitely get something out of it. Don't be so narrow minded and selfish.

I never said it is my personal opinion on it, stop making such accusations; thanks.

I suggested that the ARTS constituents will not support the idea because of so and so reasons, one of them being their inability to benefit from it and their belief that a PoliSci student for example in the future will not benefit from it. I also explained why Engineering students will be more empathetic to the cause because they know how and why Engineers need the latest technology as learning aid. A student center is not a relevant example because everyone benefits from MUSC.

Originally Posted by huzaifa47

I never said it is my personal opinion on it, stop making such accusations; thanks.

I suggested that the ARTS constituents will not support the idea because of so and so reasons, one of them being their inability to benefit from it and their belief that a PoliSci student for example in the future will not benefit from it. I also explained why Engineering students will be more empathetic to the cause because they know how and why Engineers need the latest technology as learning aid. A student center is not a relevant example because everyone benefits from MUSC.

I'm not looking to get into an argument here, but you did say "I for one will not definitely benefit from it in the 1/2 more years I have". If that's not your personal opinion about the fund, then I apologize.

Also, instead of closing out arts students and political science students - why not think outside the box? How about applying for funds to have a famous speaker come and give a talk? How about funding a trip or conference so more students in these programs are able to get those experiences who would otherwise be unable to? I'm not sure of the planned constraints of the funds. Yes, with MACLAB it's been for equipment (hence laboratory advancement benefaction endowment fund). But a McMaster wide one very well could be shaped differently. Rather than saying it can't work for arts students - suggest ways it can.

Originally Posted by huzaifa47

A student center is not a relevant example because everyone benefits from MUSC.

I disagree. I didn't get any benefit out of the student centre. The only reason I went in there was to talk to the arts quad which I could have quite easily done outside. That said, I understand it has benefits for others and can appreciate those. So in that sense, it's quite a relevant example.

Hi Huzaifa,
I am finally back from school and now I can address your concerns.

The first comment I would like to make is that I said that I would be seeking initial funding, to get it on its feet faster. The plan for this is threefold, internally within the MSU, internally within the University, and externally from alumni and sponsors (it appears that the university has a really good fundraising team). I’m not going to go into too much detail here, but it is not unfeasible to have the account start at 1.2 million in the first year. This is my top level goal.

Just to put it into context, the now 12 year old MACLAB is at about $1.5 Million and handed out ~$47000 after tax issues were applied. The interest rate changes year by year, because it is in an account that the University safeguards. Assuming the 1.5M includes this year’s donations, we have 1.35M that accumulated interest. From those two numbers, the interest rate is approximately 3.7% for the last year (1,400,000/1,350,000 = 1.037 – or 3.7%). That means after ONE year of accumulation, if initial fundraising is successful (and there is no reason it can’t be), we could be STARTING with ~$44,000 before taxes. If the fund were $20 per student, it would be increasing something like $400,000 per year, depending on opt outs. In 10 years, it would be at ~$5M, and even if the rates were 2%, it would yield $100,000 per year. Far above the $12k-$30k estimates you made. This is what the Board (of the fund) would have to distribute among applications.

On another note, at the $50 dollar donation, we typically have 3%-5% of our students opt out. At less than half that donation, there is no knowing how few people would be opting out. Also, this is not like the other MSU services you can opt out of, since its operating costs are extremely low, even if 99% of all students opt out, with money in the fund, it still perpetually deliver.
Issue 2: The engineering fund started off distributing less than $10K, but now it does extremely well. There were critics much the same as you when it started off, but it passed, and now it is part of what makes McMaster’s engineering school one of the best in the country. I am fully confident that this will pass in referendum, especially if we present that we have raised a sizeable initial principal, and that it will have a really user friendly opt-out process.

Issue 3: This same issue came up in Engineering when MACLAB was designed. They were afraid that some departments would get preferential treatment over others. That doesn’t happen, and wont with this. The system is designed to distribute funds fairly based on several criteria, one of them will be past applications that have been funded. If a department from a certain faculty used the fund too often, their applications will get rejected. Those who decide will be representatives from each area, and they will be given decision matrices to work with during the decision process. Essentially points will be given to the different applications, and the applications with the highest points will receive funding, and those with low points will not. I must repeat, this is not a money grab from sci-eng. This will benefit everyone. It is in its rules.

Also, engineering already has their own endowment fund, this would be the second place they would come for funding, so really the problem would be that engineering might not be making enough applications, which might decrease applications the departments within other faculties could make.

I would also like to note that applications can be applied to anything academic, be it new oscilloscopes, squat racks, upgrading a specific classroom, touch-screen interfaces or a famous speaker (as David has mentioned). The reality is, some applications can get really creative, for instance, software engineering has a space-ship simulator that they purchased with MACLAB money, which isn’t a tool you would think a software engineering program would need or use at a first glance. Another interesting application was wifi in the engineering lounge (well before it existed anywhere else on campus or was popular); again, not something you’d think is useful until you are actually using it.

The humanities and soc-sci programs are definitely the most underfunded, and they can benefit from something like this the most. This has lead to very tight budgeting that does not leave room for new technologies or tools. Perhaps the reason you feel extra money isn’t useful is because you haven’t seen what it can get you. But it can wonderful things, it can be applied to improve things you didn’t even think were flawed. It can open up a world of possibilities you never even thought of. I’m not going to brainstorm uses, but I know that if the money is there, people WILL think of ways to use it to add value to their education.

Anyway, there’s my response, and if you still don’t like the idea, which is fine, I invite you to opt out, but don’t try to kill this when it can increase the quality of education for other students. I have already described that this is a plan to benefit McMaster’s future students. Not thinking enough about the future is kind of one of the major problems we have right now at Mac and this is one way to address this.

I don’t think we need an argument as to why we need to think about the university’s future. We talk about that enough.

Sorry this was long winded, but I wanted to address the above discussion with sufficiency.

I would also like to link to this page for more info:

http://mes.mcmaster.ca/services/maclab.html

I think that it’s important to distinguish between MACLAB and the idea for the endowment fund that Ash is proposing. Although MACLAB provided a large part of the inspiration for this idea, to me it is difficult to make any direct comparisons beyond this due to the differences in the scope of the two funds.
MACLAB was designed specifically with engineers in mind. Implementing an endowment fund on a university-wide basis is no easy task due to the sheer number of parties that need to be considered, but it is by no means impossible. The feedback received so far has brought forth legitimate concerns that do need to be addressed. However, the beauty of what Ash is proposing is that we have the opportunity to build something from the ground up that will provide the greatest benefit to McMaster students. We have the ability to find innovative ways to make this fund something that can be beneficial to anyone.
This idea won’t be developed in isolation. Rather, it will be continuously refined based on continuous feedback from anyone who is willing to provide it. We’ve seen throughout this campaign that Ash is eager from feedback and I have no doubts that this will continue as he moves forward in making this idea a reality.
Finally I just want to add that idea ties into Ash’s plans for improving relationships between the various faculty societies. What better way to accomplish this by getting everyone working together towards a common goal of creating an endowment fund to benefit as many people as possible?
Anyways, keep the feedback coming so we can continue to improve this idea!
Jim Morris
Engineering Physics and Management V

I would just like to say, I have known Ash since 2006 when I came here for Engineering Experience Weekend. He was my frosh leader at the time and gave such enthusiasm for Engineering and McMaster that I knew at that time this place was the right place for me to be. I met him again in frosh week and he remebered my name and has remembered it ever since. All the time that I have known of him he has been a very dedicated to his studies (when I went to thode I saw him there everyday) as well as to his first years. I believe that he is exactly what this University needs as a President as he is someone who is dedicated to ensuring that everyone has a great time here at University as well as ensuring that we are all treated properly. So to whoever reads this and is still unsure of who to vote for I hope that I have helped give some more insight to this wonderful presidential candidate.


Katie
Civil Engineering and Management
2011