Land development is necessary to convert trust land assets into financial assets for the benefit of the University's mission. The net revenues from the sale, lease, development, and other income generated from trust lands are deposited into the University's Land Grant Endowment Trust Fund (Fund). This Fund along with the University's trust land and natural resource assets comprise the Land Grant Trust. The Fund represents the University's original land grant, invested proceeds from the development of these resources and appreciation of invested funds. The Inflation-Proofing Fund represents reinvested earnings of the Land Grant Endowment Trust Fund and net proceeds of non-trust real property transactions designated for preservation of the long-term purchasing strength of the endowment. The Natural Resources Fund represents spendable funds designated by Regents' Policy to provide support for agriculture, forestry, fisheries, mineral, and other University programs.
The University of Alaska Foundation Trustees manage the Fund as an endowment fund, at the direction of the University of Alaska Board of Regents. The Fund currently totals approximately $134 million at December 31, 2016. It is managed under standard endowment accounting practices with 4.5% of the trailing five year average made available for expenditure on an annual basis. The current contribution of Fund earnings to University programs is modest ($5.8 million for FY17) in comparison to legislative appropriations ($325 million in FY17). The importance of this contribution will grow as the University receives additional federal and state entitlement land to complete its land grant and UA Land Management continues to successfully convert the University's natural resources, land, and real property assets into investible income.
Earnings from the Land Grant Endowment Trust Fund
The Board of Regents has adoped a policy for how the earnings from the Fund are to be used. Among other things, the earnings support the UA Scholars Program. This program offers a $12,000 scholarship to the top 10% of the graduates from Alaska high schools each year. It is the cornerstone of the University's effort to retain in the state and to educate Alaska's brightest graduating high school seniors. The program has been successful and currently has 1817 active participants. In FY18, the annual cost of this program was $3.6 million. Earnings from the Fund also help to finance an array of important initiatives and the day-to-day operations of UA Land Management.