Associated Student Government (ASG) approved a plan at Tuesday's student senate meeting to help student organizations work their way out of debt beginning in the 2008-09 academic year.
About 20 student organizations at Miami have accumulated more than $90,000 in debt over the past several years.
Student body president Jens Sutmöller promised at his state of the student body address in January that a plan to erase this debt would be in place by the end of the semester. According to Sutmöller, the debt relief plan is not intended to bail organizations out, but to assist them in raising themselves out of debt.
The way out, according to ASG treasurer Brendan Buholzer, is to encourage fundraising within student organizations. Those funds raised will then be matched by a payment from ASG.
"This is intended to be a lot more personal as opposed to funding committee where 90 organizations come in and we go through them in five minutes," Buholzer said. "We want to sit down with them and develop a fundraising plan and help them understand why they went into debt."
Buholzer authored the policy changes and explained that a newly created subcommittee of the funding committee will use a tiered system to determine the amount ASG pays out to student organizations whose accounts are in the red.
To encourage student groups to fundraise as much money as possible, organizations that raise more money are eligible to receive higher proportions of debt relief funding from ASG.
In the first tier of the program, student groups that fundraise up to $500 will receive a 100 percent match in funds from ASG. For example, if Group A raises $450, ASG will contribute $450 in debt relief.
The program's second tier is for organizations that raise between $500 and $2,100. ASG will match the first $500 and then contribute 120 percent of whatever amount the group fundraises above $500.
Any organization that raises more than $2,100 falls into the third tier, which offers an even higher rate of return. ASG will match the first $500, give 120 percent of the amount between $500 and $2,100, and then match any fundraising amounts above $2,100 at a rate of 130 percent.
Buholzer explained that inactive groups' accounts and unspent funds will provide the matching funds for ASG. According to Buholzer, some student organizations naturally dissipate as members graduate and no new members join the following year. Once a group has been inactive for two full years, ASG will seize the remaining assets from its accounts and use them as the matching funds.
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"To initially take on the large amount of debt we have now, the inactive accounts will be key," Buholzer said. "Looking at a long-term plan, it will no longer be heavy on inactive accounts, but we'll work to retrieve the funds of groups not spent."
Per the usual routine of student organization funding, Buholzer said ASG will require student groups to return any unspent funding, which will then be redirected into debt-relief.
Buholzer is confident that these two sources of debt relief funding will be sufficient to cover the costs of the matching program.
"We are estimating that there will be a very large amount of funds that will be available from the inactive accounts and then another generous amount that was unspent by student organizations," Buholzer said. "Overall, my sense is that we won't run out of money. If every organization were to completely fundraise themselves out of debt, we would need about $54,000, but we won't have organizations that are completely able to fundraise themselves out of debt."
Jonathan McNabb, vice president of management-elect, said the bill will help ASG better fulfill its responsibility to oversee the disbursement of hundreds of thousands of dollars to student organizations.
"This bill is about restoring the good faith the university has given us (ASG) and in the future requiring that this won't happen again," McNabb said. "It will take a lot of work to implement next year, but it will be worth the challenge."
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