or the University of Colorado Foundation, the past year has been one of defining moments. It was a time to celebrate a tremendous achievement and a time of necessary transformation. Each, in its own way, has helped us define our purpose and potential, and set our course for the future.

June 2003 brought the culmination of the billion-dollar Beyond Boundaries Campaign for Colorado. This seven-year capital campaign was our most ambitious to date, and with its successful completion, we became one of only eleven public institutions of higher education to complete a campaign of this magnitude. We thank you, our donors, for your unwavering support. In a difficult economic environment, you continue to recognize the importance of higher education at that time to our state and nation and, specifically, to place your trust and continued support in the excellence of the University of Colorado.

The chimes resounding from the clock tower at El Pomar Center at CU-Colorado Springs call students like Rebecca Mendelson to the work and study they love. Once they arrive at El Pomar Center, they are greeted by a multimedia lab, a TV production studio, and more than 180 computer terminals. The Center and the newly remodeled Kraemer Family Library within the Center were made possible by a partnership among El Pomar Foundation, the University of Colorado Foundation, the Colorado Legislature, and the University. Soon after its opening, Rebecca, a mechanical engineering major, found herself using the facilities on a daily basis. “I use El Pomar Center as a home base for my study groups,” said Rebecca. “It’s conducive for studying because it provides computers, a comfortable atmosphere, quiet places to study, as well as being centrally located on campus.”

Yet with this pinnacle of achievement came a need for reevaluation and change precipitated by the economic downturn of the last several years. With Foundation operations funded by several sources – the University of Colorado, through a development services agreement; short-term interest earned on current gift and endowment account balances; and management fees on the Foundation’s long-term investment pool – we were faced with difficult decisions when investment revenue dropped sharply. Our proposed budget for fiscal year 2004 indicated a 25 percent shortfall in operating funds, forcing us to reorganize and reduce our staff and expenses by a comparable amount.

As difficult as this process was, it has not affected our fund-raising mission nor our ability to manage funds effectively. By using our reduced resources prudently and being innovative in our ways of doing business, we have not only sustained our core operations but in some operational areas – such as information technology, gift processing and our annual giving program – we have seen significant improvements and efficiencies. We will continue to explore means to improve our internal processes and cost efficiencies. In the area of fund-raising, our principal emphasis is directed towards major gift fund-raising and the management and stewardship of your gifts.

Although we function as an independent entity from the University, we are, in fact, its close partner and ally. In this collaborative role, we celebrated the opening of the newest phase of Williams Village - Bear Creek apartments in August 2003, a student residential complex on the Boulder campus for non-freshmen made possible with a Foundation-backed $69 million bond issuance. We also facilitated the addition of a new building for the CU-Colorado Springs campus by purchasing, renovating, and later selling to the University a building that now provides much-needed academic space for the Beth-El College of Nursing and Health Sciences and other programs.

In yet another example of our collaboration with the University, the Foundation expanded its support for the Faculty Housing Assistance Program on all four campuses from $2 million to $7 million. The $5 million increase is the result of a unique partnership between the Foundation and the U of C Federal Credit Union in which the Foundation guarantees low-interest loans to faculty, thus providing a means of recruiting and retaining top faculty at CU and ensuring that our students are taught by outstanding educators.

In 2003-04, the Foundation will increase the level of funding it transfers annually to the University by eliminating the five percent fee that has historically been applied to gifts to support the operations of the Foundation in its fund-raising mission. In this past fiscal year we transferred more than $76 million to the University, representing more than 11 percent of our asset base.

As we move forward, we remain strong and aggressively committed to being a responsive partner with the University and a trusted steward for the thousands of donors who give their financial support to make a difference at CU.

We extend our sincere thanks to our volunteer leadership and all of you who know and support the University’s vision of sustaining a culture of excellence in higher education.

John E. DeLauro, M.D. Chair, Board of Trustees	Michael M. Byram President and CEO