The University of Arizona transferred $70 million from its endowment to direct control of the school. The move took place on Tuesday, the last day of the fiscal year.
On this day, the university’s cash balance in days is also calculated. This is the number of days the school can operate with the money available at that time.
At the same time, the UA issued $75 million in new bonds to build its new medical research building in Phoenix.
Caitlin Schmidt, editor and publisher of Tucson Spotlight, wrote an article about it and joined the show to talk about it.
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Full conversation
MARK BRODIE: Caitlin, good morning.
CAITLIN SCHMIDT: Hello.
MARK BRODIE: Why exactly did the U of A take control of this endowment money that came directly from donors?
CAITLIN SCHMIDT: So the university told me that it’s about efficiency and visibility. However, the letter the foundation sent to donors specifically states that the change will help the UA meet cash balance targets set by the Board of Regents and bond rating agencies.
MARK BRODIE: So it’s all about making sure that the university can continue to operate, and I would also imagine that there are some optics if they issue bonds, if their borrowing costs could go up, or if it looks like they don’t have enough cash on hand.
CAITLIN SCHMIDT: Yes, I mean, that could happen. So the university has said that these two things are not connected. The timing is certainly interesting considering how this all happened. But even if they’re not connected, this project is actually just an example of things that won’t get funded if the university doesn’t have enough cash to run operations, issue bonds, or improve its credit rating.
Your credit rating was improved from negative to positive in January. But the bond agency said that could change if the U of A’s situation changes. Back in June, CFO John Arnold reported to the Regents that their cash balance had improved from 78 to 84 days, but was still well below the Regents’ target of 140 days.
MARK BRODIE: How, how many days, I guess, does the university buy that $70 million in cash?
CAITLIN SCHMIDT: We were told it was about 10 days. So not, you know, I mean, it’s definitely not about hitting the number that it needs to hit, but it sounds like every little bit helps at this point.
MARK BRODIE: And what did the donors say about it? Is it like they are okay with the money they thought was going to one place actually going to another place?
CAITLIN SCHMIDT: You know, I mean, I’ve seen some conversations on social media from donors who either weren’t informed because their endowment wasn’t the specific type that was included in that summary, and I know that the Arizona Daily Star has heard from some donors who were included in that summary who weren’t happy about it and had asked for it and told the university that they wanted to opt out. There was an opt-out option, but again it was a letter. It’s summer, people are traveling, and if you haven’t received the letter and unsubscribed, you’re caught up in this bust.
MARK BRODIE: True, but it sounds like what you’re saying doesn’t represent the full complement of the university.
CAITLIN SCHMIDT: No, not at all. This is just the payout they received. So there is an annual disbursement of about 4%, which is distributed to each department or school that is supposed to use it according to the donor’s instructions. And in recent years, schools have had the opportunity to reinvest that money as needed to further increase capital. It is unclear whether they will be able to do this. The university told us this would be allowed if necessary, but did not respond to further questions about appropriate funding.
MARK BRODIE: OK. So, Caitlin, can you tell us about the building for which the university issued $75 million in bonds? It’s a medical building here in the Valley, right?
CAITLIN SCHMIDT: Yes, it is a medical building in Phoenix and is originally called the Medical Innovation Building. It was originally called the Center for Advanced Molecular and Immunological Therapies. That’s why last November the regents approved this $75 million bond to help finance the building. And then in February, the board nearly doubled the university’s $20 state research grant [million] to almost $40 million.
And the board documents said this was to stop construction on the project. As of last September, they hadn’t reported any donations for this project, so it sounds like they’re struggling to make ends meet.
MARK BRODIE: Yes, is it surprising that there were no gifts for this?
CAITLIN SCHMIDT: You know, it’s hard, it’s hard to say. This was a project by Robert C. Robbins that began in 2023.
MARK BRODIE: Former President of the U of A
CAITLIN SCHMIDT: Former president, yes. He was awarded a bonus tied to fundraising in 2023. Not the full bonus, so it didn’t reach the full amount. But he raised some capital for it. It’s just unclear how much of it was state funding or federal funding or donations.
MARK BRODIE: And as you just reported, as you just mentioned, the University of California says that the two, even though they cost $70 [million] and $75 million are not that far apart in value and the timing was fairly similar. Are these two not related?
CAITLIN SCHMIDT: Yes, they said they were not related. You know, they haven’t answered specific questions about this again, you know, I don’t, we’re not suggesting to anyone that they use these donor funds to fund this project, but it certainly helps secure a bond for this project if they can show that they’ve increased their cash balance in days. And whether it’s this project or another, improving that number just helps them continue to build or fund or fund whatever they’re trying to do to further their mission.
MARK BRODIE: So perhaps a more indirect relationship than a direct one.
CAITLIN SCHMIDT: Definitely.
MARK BRODIE: And does it look like the university will ultimately have the money to build the medical building?
CAITLIN SCHMIDT: I, you know, again, they don’t answer more questions than they answer. So it’s hard to say. They told me that they had secured financing to continue and complete construction by the summer. Again, if their credit improves and they get this bond, that’s enough, but they say they’ll reach their goal.
MARK BRODIE: Okay, we’ll have to see what happens. This is Caitlin Schmidt, editor and publisher of Tucson Spotlight. Caitlin, thank you as always, I appreciate it.
CAITLIN SCHMIDT: Thank you very much.
KJZZ’s The Show transcripts will be completed on time. This text has been edited for length and clarity and may not be in its final form. The definitive record of the KJZZ program is the audio recording.
https://www.kjzz.org/the-show/2026-07-02/university-of-arizona-transferred-70-million-in-endowment-money-under-its-direct-control
