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Junior/Community Colleges Breakout
Getting Better Every Day in Every Way Putting Your Foundation to Work For You
(Monday, June 15, 9:30 - 10:30 a.m.)

Lori Mallory:

NACDA would like me to announce that the Spouses' Hospitality Suite is located on the Voyager Lawn. It's at the north end of the building and sponsored by Outback Trophy Suites. They'd like you to inform your spouses to stop in and you can stop in, I'm sure.

Good morning. I'm Lori Mallory and I'm pleased to see all of you here. Some of you are new faces that did not attend the NATYCAA. The last two days, we've had the sessions for all of the two-year people in the NATYCAA. It was a very successful meeting and we'd like to continue this. We've eliminated the Tuesday session this year because a lot of people come on Friday and by the time Tuesday comes, they're either out of time or want to see other sessions. We think the two we have planned this morning are going to be excellent sessions. You can then be on your own and attend the NACDA sessions that appeal to you. We think that will be a better format.

I'm the athletics director at Johnson County Community College and I am a member of NACDA's Executive Committee. At this time, I'd like to welcome you to your Junior/Community College Breakout Session today which is entitled, "Putting Your Foundation To Work For You." We've lined up two excellent speakers, both who have a lot of familiarity with foundations and how they can work for you.

Our first speaker was a member of our NATYCAA group and has since gone on to return back to school. Vince Mumford is a current Holmes Scholar and is completing all of his requirements for a Doctoral Degree in Educational Leadership and Policy at the University of Delaware. He has more than 10 years of experience in higher education. He has had several varied professional experiences. From 1992 until 1997, he served on the staff at Baltimore City Community College where he was the director of intercollegiate athletics. He served as supervisor of intercollegiate athletics in the College of Health, Physical Education, Athletics and Recreation at the University of Delaware from 1990 to 1992 and served as an assistant basketball coach at the university from 1988 to 1990.

His research interests include leadership, management and organization, health, fitness and policy issues. His dissertation on Title IX compliance in the Maryland Junior College Athletic Conference explores gender equity issues in intercollegiate athletics. He has been very active in a number of local and professional organizations. He also serves on the editorial board of Athletic Management and as I said, he's a former member of NACDA's and NATYCCA's boards. Vince.

Vince Mumford:

Are there any Chicago Bulls' fans? First of all, if you've been following the games, you noticed that a lot of times you hear Michael Jordan speak about the moment. That came as a result of the philosophy of their coach, Phil Jackson. That philosophy reminds me a lot of getting better everyday. It reminded me of something I heard years ago from Coach Schembechler, "You're either getting better or you're getting worse." The first time I heard that, I reflected on that. That statement was very profound.

How many of you like fund raising? Let's see a show of hands. How many of you have had someone say to you, "We have enough money. You really don't have to do anymore fund raising if you don't want to." How many of you would stop? For many of us, we don't have enough money anymore. We used to have enough, but we don't anymore. Times have changed, especially with your cut backs and your budgets. There's a need for community colleges to do fund raising now.

There have been two trends I've seen lately. One of them is that schools that raise money seem to have success. Schools that don't do any fund raising seem to have a harder time attracting quality student-athletes. Whenever I come to seminars like this, I always look for successful fund raising. I always look for that best method of ways to raise money. Sometimes, I admit, it can be disheartening, when you hear the big time Division I schools talk about how they just completed their zillion dollar campaign or how they built their trillion dollar stadium. But, one thing I've learned is that success is no accident. It does leave clues and there are some strategies for successful fund raising that we, at the community college level, can take from these sessions. Some of the strategies I'll be talking about today involve education, simplicity, involvement, support, stewardship, tracking, recognition, fun and growth.

You have to educate yourself in fund raising. Just like sports, there are certain fundamentals, certain basics to fund raising. Do you have a game plan? Identifying prospects, doing your research, involving your prospects, cultivating them and asking them for their order and recognition. Do you know the difference between planned giving and capital campaigns, endowments, major gifts? Those are all of the things you need to educate yourself about. You also have to do your research. You have to develop a list of your top gift prospects. Where do you find these prospects? Who do you do business with? Who do you spend money with? Those are often times key people you want to look at when you make your list of top gift prospects. You have to sell yourself and your program. You have to talk about the great things happening in your athletics department at all times. If you don't, no one else will. You have to think win-win. You have to know what you bring to the table. You have to know what sponsors are looking for. How do you find the answers to these questions? You simply have to ask.

I've been talking to Coca-Cola for some time trying to get them involved in our program. I had to find out how we could benefit them. They had the market and had just about every college around us. I found out they had this new product they were looking to market. We fit that market profile, so they were happy to come in and do some business with us. That's how I approached them. You have to find something that people care about. People give to people. People also give to causes they care about. You have to identify your product. What is your product? Some people might say it's education. You may hear others saying it's entertainment, but that's for you to decide.

You have to keep it simple. We all know the many hats we wear and you just can't do it all. A lot of times, your fund raising operation may be a one-person operation. You have to realize that and remember your limitations. You also have to keep perspective. There's a big difference in what you may hear sometimes about what two-year schools are doing and what four-year schools are doing. In my situation, it only cost $1,200 tuition to send a kid to school. It costs less than $5,000 for a coach's salary. You have to keep that perspective.

You have to identify your strategies and goals. How are you going to raise the money? How much money do you need? These are things you have to identify. You have to make modifications when necessary. If I hear something, I have to take that back and base it on what I have at my institution. A lot of times, with our limited staff and resources, I combine things. I combined our annual giving with a special event and gave donors different gift levels in gifts. Oftentimes, I have to make modifications.

You have to involve your board because these people will serve as your resource people for your future fund raising activities. You have to select your team wisely and you have to select committed individuals, preferably from the disciplines of business, law and accounting, people that can add something to your board. At our college, the director of admissions single-handedly helped us raise more than half the money we got from our golf tournament. Why? Because it benefited him also. Obviously, he liked golf, but more than that, he got to network and meet new people to play golf with. He got better deals on his golf equipment, so it benefited him also.

You have to get everyone on the same page to determine the direction of your program, your structure and your guidelines. You have to ask them to make a commitment. Ask them to make a gift. There was a member of the college's Board of Trustees who was an athletics fan. Anytime we won a championship, he would provide us with a championship jacket. We didn't even have to ask. We used to meet from time to time to talk about athletics. He was a real fan. When his term expired on the Board of Trustees, I asked him if he ever gave and he said no. No one ever asked. The next day, I had a proposal to him and he did give. They key is that you have to ask. A lot of times, people will give if you would only ask. You have to make your board a part of your solicitation team. You always have to evaluate the process to see how you've done and how you can get better.

You have to have administrative support. The college administration should understand and endorse your fund raising efforts. You have to get on their agenda. I met regularly with the director of our foundation board. I also got on the president's calendar. Whenever I needed him to go out and ask for gifts or send letters to people whom made gifts, he was more than happy to help do that and to help recognize donors. It's important to find what I call a guardian angel. I can't stress the importance of this. Someone who can help you get through the red tape at the college, someone who champions your cause. There are some people who may butt heads on issues of fund raising, but if you have someone higher up to support you, it makes things a lot easier. You have to educate your internal audiences. You hear people say it takes money to make money so that may require a different line item in your budget so you can make more money down the road. You have to educate some people in that respect.

You also have to ask the administration to make gifts to show their support. Our president was always one of the first people to support financially different fund raising causes. He didn't have to do that, but an amazing thing happened when the president gave and people knew about it. You would see vice presidents give, show up for activities because it had a domino effect.

You have to develop a plan beforehand where the money will go. Will the money go to scholarships, operating expenses? Will it go to some reserve account? You have to develop that plan. That's the job of your foundation board, but you have to let them know the options. That's your job. You also have to tell donors how their gifts will be spent. They should know the plan for their money and you should stick to that plan. If you tell them you're raising the money for scholarships, spend that money on scholarships and let them know.

It's very important to keep track of your donors and you need to make a list. You want to try to move your donors through the fund raising process. If somebody gave last year, you want to try to get them to give a little bit more each year. That list is your most important resource. Obviously, if they've given to your department, they have some interest in it. That's a lot easier than going to attract new business. You have to track your mailings, your meetings and your responses. There's nothing worse than two people from the same organization asking a donor for money. A lot of times when you're a fund raiser, different factions on the campus will ask you to serve on their committee. I was at a breakfast meeting and heard someone say, "let's ask this particular person for $10,000. This person had the ability to give." But another person quickly said, "I've already talked to this person and they gave $200,000 to the college to another cause." You can see where you wouldn't want that to happen.

Invest in a good software program. A lot of times your development office on your campus will have those resources. Be patient. The fund raising process takes time and it may take some time before you realize that first major gift. It's important to recognize your donors. Again, you have to create a plan. Know how you're going to recognize your donors, especially your major donors. Know what they like in order to recognize them. Some may like glitter, some may not. McDonalds was a sponsor for our summer camp program. They provided all of the food and drinks. They wanted something simple in return, just a wall with the names of all of the campers on it to hang. That's all they wanted.

You have to be able to say thank you. It could be simple and inexpensive, but it has to be heartfelt. Plaques or a simple luncheon thank you will do.

You have to have fun. You have to keep the fun in fund raising. In order to do this, I would suggest appointing a fun committee. Their purpose would be to have the responsibility of insuring fun at your events. We did this at all of our events. Those people did things from scheduling the entertainment, identifying fun events, decorations and making it a festive atmosphere. Remember what gets rewarded, gets done. We tried to reward our biggest fund raisers with different trips. You can get these trips, weekend trips, relatively inexpensively. Sometimes if we asked, people would donate them. Our coaches had fun by giving our kids different places to travel. We went to places like Florida, Utah and Georgia. We were helped by people like Jim Harvey. Our coaches actually looked forward to these trips and they were energized to help fund raise for them and identify prospects for us. Do something to create lasting memories. One of our biggest fund raisers involved NBA players, NFL players and star college players, media personalities. We got more publicity from this event than anything. The mayor would come to the games and make presentations. It created lasting impressions on anybody involved with it.

Getting back to the getting better every day. How do you intend to grow? How do you get better each day? You have to sharpen the saw. Don't re-invent the wheel. There are ideas out there. You just have to beg, steal and borrow them. Keep up with your field. There are some outstanding publications and seminars going on in the field of fund raising. There are books out there. Talk to your development office and they may be able to answer some of your questions. Visit your library for books on fund raising. Call your friends. A lot of people in this room could serve as your resource people. I've talked to several people on ideas they've had and taken them back to my own campus. Join an organization like NATYCAA or NAADD. You oftentimes come to these things looking for one idea to take back to your campus. NAADD has a resource books that has literally hundreds of ideas for fund raising. Look at it and pick out something you might want to try. Use the Internet. Type in the word fund raising and you'll find thousands of ideas at your fingertips.

We call it, as you've often heard, friend raising. Most of our big gifts came from donors or friends who were identified by people directly related to the staff. We did what we called a fund raising hype. We combined our annual giving with a special event. We didn't have the time and resources to conduct an annual capital campaign.

Fund raising was a goal. It was a part of each staff member's evaluation process. We constantly thought fund raising and brought up many ideas because of that. We involved the top brass as much as we could. We put our president's picture on all of our brochures and asked him to put a statement inside the brochure. He had to be involved. He had as much at stake as we did. He always participated because of that. We would meet with different accountants and they would help us set up different accounts. Athletics became one of the biggest fund raisers on campus because of this. A computerized list is important to keep track of your donors. All major donors got a letter from our president. He enjoyed doing that and it's something he always did. We made it fun. We took trips all over the country and it gave our kids a unique perspective.

The best method for fund raising is there is no one best method, only the one that you select and there are many out there to choose from. The secret to successful fund raising is to learn the different strategies and the different fundamentals in fund raising and then just take action and begin fund raising.

Lori Mallory:

Our next speaker is Lu Merritt. This is the first time I've meet Lu. I know his bio is much more extensive than what he was able to jot down for me. He is the director of development for intercollegiate athletics at Virginia Tech. He is responsible for all aspects of fund raising for the athletics program at the university. He is a graduate of Virginia Tech. He was a letterman and captain of the tennis team. He currently serves on the Executive Committee of NAADD, which is a sub-group of NACDA, standing for the National Association of Athletic Development Directors.

Lu Merritt:

Good morning. I'm delighted to be here this morning. We've actually been here for a week. Our group, NAADD, started on Thursday and Friday. When I was asked to participate this morning, that gave me an opportunity to play and lay on the beach Saturday and Sunday. I'm delighted to be here and share with you some of the things we're doing at Virginia Tech, in hopes that I can give you some ideas and suggestions that you can take back with you. I think Vince said it very well, there are no secrets out there. There's nothing waiting to be discovered in terms of fund raising. Our business is people, identifying them, finding them, cultivating them and cultivating them well and consistently.

Let me begin by telling you a little bit about our school. You may not be familiar with Virginia Tech, but Virginia Polytechnic Institute and State University was founded in 1872 as a land grant university. Today, we're the largest university in Virginia, 25,000 students, studying in more than 200 degree programs, both undergraduate and graduate level. We have a student breakdown of 60 percent men and 40 percent women. We are currently conducting research, each year, $150 million. We had 17,000 applicants for this fall's freshman class for 4,500 slots. The average SAT score is 1,200 and the average grade point average is 3.5. I'm glad I went to school in the late 60s because I sure couldn't get in today. It's amazing to me how smart these young people are today. This year, we are requiring all of our incoming freshman to have computers. In the past, we normally require business disciplines, but this year they'll all be required to have a computer.

We're going to raise between $45 and $47 million this year. Of that total, we're going to raise $6 million for intercollegiate athletics. I should tell you that we're in the final weeks of a university campaign. It seems like you're either in a campaign, you're starting a campaign or ending up a campaign. They keep us pretty busy. We started in July 1992, a $250 million campaign for the university. It appears when we end this month, we're going to raise $325 million. That's just amazing to me. Our goal in intercollegiate athletics was $24 million. It looks like we're going to come in at $31 million.

We participate in the Big East Conference in football. We're in the Atlantic 10 Conference in all other sports. Very frankly, that's the goal of our athletic director, to get us all into one conference for all sports. Our fans are confused about who we're competing against and what's going on. The Big East athletics directors just completed their meetings this week and I haven't had a chance to talk to Jim Weaver, but I know it was going to be on the agenda. That's one thing we're looking for. We compete in 21 varsity sports, 11 for men and 10 for women. We're in full compliance with Title IX. We're very proud of that and all of our women's sports are fully funded.

There are a couple of points I'd like to share with you. I know many of you wear a lot of hats and I don't want to try to put other hats on your head. I'd like to share with you some opportunities where we see in fund raising and then I'll talk about what we do in athletics because we have some interesting ways to raise money there. In fact, we were on the program earlier this week.

The first one is planned giving. Before you pack up your bags and run out the door, I'm not going to talk about all of those planned giving things, but there are some wonderful opportunities out there. Historically, most public colleges and universities, including ours, did not invest substantial efforts or resources in the generation of private support because state appropriations were the primary source of funding. We've seen that drastically cut back in Virginia. The last couple of governors, in their minds, seemed to have more priorities and we're seeing our support from the state dropped. So, as a result, we've increased our effort in getting out to raise money.

Our foundation was created in 1948. The activity of the foundation appeared to be very limited. In fact, most of the growth in our development program and our foundation assets has taken place in the last 20 years. This means we've got a very young development program across the board. Generally speaking, planned giving takes several decades to realize its full potential because many of the large gifts do not come to the charitable organization until the end of the life of the donor. That's the case in our situation. We'd like to think that our best years are ahead of us.

In 1978, our foundation endowment was less than $5 million. Ten years later, in 1988, it had grown to more than $83 million and today, it's up to $340 million with a goal of one billion by the year 2013. Twenty-five universities across the country already have a billion dollars in endowment and that's just staggering. There's fierce competition out there today. A growing number of private and public charities are out for every dollar of private support that's there. There's more than 1.1 million registered exempt entities out there and more than 600,000 of them are 502 C3 organizations, such as we are. We're a public charity, we're not a private one.

The demographics are interesting. The U.S. population is getting older. I could tell that in our meetings this week with NAADD and NACMA, the kids seem so much younger. I think it's because we're getting older. The median age in 1994 in the U.S. population was 34 years old. Next year, the median age will be 36 and in 2035, it'll be almost 40 years. Baby boomers, those of us born between the years 1946 through 1964, now account for 30 percent of the U.S. population. The estimated $10 to $15 trillion in the inter-generational transfer of wealth between the years of 1990 and 2040 is well under way. Charitable gift planning is an important aspect of this transition for personal philanthropic, tax and financial reasons. Donors, especially, baby boomers, are becoming more analytical and aware of the options for providing charitable support and they're also requiring more analytical accountability in stewardship with their gifts.

Tax law changes have been very favorable for us as well. The Philanthropic Protection Act between 1995 and 1996, the Tax Payers Relief Act of 1997 and several others are all helping us and making it more advantageous for donors to give away their money. Trends are toward greater sophistication and increased expertise in the development program and we're doing this. We've hired our third attorney to help us handle the volume. We're increasing the number of fund raisers in the foundation by getting out and simply reaching for more people. There are a growing number of wealthy individuals. This is something that caught my eye. The wealthiest 10 percent of the U.S. population account for 92 percent of all of the charitable gifts. Eighty percent of the U.S. billionaires are first generation. They did not inherit their wealth. This holds true of most of our alumni and other benefactors. Our student body traditionally comes from families of moderate financial success.

Where is all of this personal wealth held? Publicly traded stock accounts for 26 percent of the wealth. It's relatively easy to give away. Closely held stocks are21 percent and this comes from small family-owned corporations. Some of your multi-billion dollar companies such as the M&M and Mars Candy Company, which is headquartered in Virginia. Retirement accounts account for 26 percent. It was amazing to me that these retirement accounts grow by $200 million every day. While you're down here, retirement accounts are growing. It's just amazing.

The largest amount of charitable gifts come from gifts of appreciated stock. We've certainly seen that in our campaign. The stock market has been going straight up. A lot of people acquired this stock when it had little or no basis in it and they really can't do anything with it other than give it away because they'd have to pay so much tax on it. We have really seen our donors step up and give us appreciated stock. Qualified pension plans and other assets which receive unfavorable tax treatment, let's give it away to a qualified foundation.

During our campaign, some of the planned gifts we've received, almost $4 million in charitable remainder trusts, more than $20 million in realized bequests and, here again, Vince made the point of getting out there and asking people to include your college or university or program in their will. If we'd have done this 40 or 50 years ago, you'd start to see this paying off. We've gotten our foot in the door now and although you hate to say, hurry up and die, people are going to die and it would be nice to have these folks include your school in your estate plan. We've got more than 150,000 living alumni. Just think, if each one of them left you a little bit, where it would be down the road. Another $7 million was received in our outright gifts through our planned giving office. We're currently managing about $25 million of life income gifts where the donor will make a pledge to you of assets and maybe you're paying them five, six or seven percent each year and then your foundation will realize that when they pass on.

One thing I would ask you to think about. Here again, the budget gets involved, but have an attorney on staff if that is workable. We have found that the expertise of having our own attorneys on staff offers a savings over outside council. Maintaining momentum of a major gift transaction, you've got folks on staff to handle that. Once someone indicated they would like to give us something, take an expert with you. It's obviously a big advantage.

We had a gentleman who was on his deathbed. We sent someone down to meet with him and talk with him and he made a $1 million non-grantor charitable annuity trust that will give us $93,500 a year for the next 20 years. We've got a new athletics director and he's just delighted to have that type of gift coming in. It's because we were able to take our planned gift attorney there, meet with this gentleman and his family to set up what he wanted to set up to avoid taxes.

The future of planned giving, not only at our university, but literally around the country seems promising in terms of increased alumni and benefactors entering a stage in their life where most planned and major gift donors can consider larger charitable commitments. We believe our benefactors are largely untapped at present and there is a high level of interest in supporting the university. The mass media, here again, they're helping us out. The major financial publications have also helped increase awareness of the opportunities available through these complex gifts. Virtually every major journal or newspaper has carried features about the benefits of planned gifts at some point over the last three years. This has helped educate the American public.

A second area that has really helped us is research. We've got three ladies who do a great job of researching and finding out where our alumni are and what they're doing. Let me tell you how we do that. You try to keep up with your alumni and our alumni office tries to keep up. Sometimes that's difficult. While you might be able to find them, you don't always know what they're doing and how much money they make, but it's amazing about what information you can tap into. We screen our alumni database against that of the Securities and Exchange Commission to identify alumni who are inside owners, officers, directors or share holders who own more than 10 percent of companies. We screen them against national real estate records to see who owns real estate over a certain amount. The level we've established is one-half million dollars. Somebody owns a home worth one-half million dollars, that's a good sign they've got some money.

We also screen against the D&B and identify alumni who are officers or directors in public or private companies. We screen against databases of federal campaign contributors. We also screen against individuals listed in Who's Who publications, as well as foundation officers. We utilize various geodemographic prospect screening surfaces which can provide net worth in income estimates. That's amazing, but that information is out there.

In researching prospects, both individual and corporate, we use a number of resources including Lexus, Nexus, Dow Jones News Retrieval Service, Dialogue, TRW Ready, CDA Invest Net, D&B and prospect on-line. It's all available to you. Some of these things cost money, but if you can identify a few alumni and stick the development staff on them, you can recruit them very quickly. We have numerous CD databases for researching people, companies and foundations, million dollar plus, foundation search.

How this works. We meet once a month and the research department prepares profiles and then we go over each profile. My boss will assign that individual to one of the collegiate development directors, whether it be engineering, arts and science, business or athletics. Then, we go out and conduct a field research. We visit with that donor to try and determine whether they have an interest in supporting the university.

It's important to find your alumni and determine if they can assist you. Many times, as Vince said, it's just a question of asking them. If you don't ask them, they're not going to drive by the campus and throw a bag of money into the door. We feel it will pay dividends for us. We know it does.

I'd like to talk about what we've done with intercollegiate athletics. We have an $18 million endowment in athletics. This year, we're going to raise about $6 million. That will break down to about $2.5 to $3 million for scholarships. That's the annual fund combined with those people who have pledged an endowment and they're making payments on that. To endow a scholarship at Virginia Tech is $75,000. We normally give them a five-year period to pay that. As they're making those payments to that endowment, combined with annual gifts we get, that makes up that $3 million. The other $3 million are gifts for one of our facilities or one of our individual sports. We are completing a new athletics building that will cost about $10.5 million and people are making pledges to that.

Our meat and potatoes is what we call our Hokie system. It's a name that came many years ago when they had a cheer contest in the late 1800s. One of the students came up with a cheer and we adopted the nickname the Hokies. Our rep system is about 450 volunteers who want to help us raise money in their particular community. We do a lot for these volunteers. We have seminars for them. We send them monthly mailings. I have four other members on my fund raising staff and we go out to the individual cities, Norfolk, northern Virginia, Bristol, Charlotte, each month and meet with our volunteers. The presidents of our local clubs and our volunteers are well informed about what's going on in athletics. If they have at least 20 active members, we give them an upgrade. Let's say their gift is $250 or $500, we will upgrade them to the next giving level and that is important for parking at football and basketball games and also for their seat location. If they're giving us $500 and we can upgrade them to a silver Hokie, that's important to them and it helps motivate them in helping us raise money.

Stay in touch with your donors. Reach out to them and give them information that will give them motivation and then give them rewards. We have a nice banquet in the fall where we give them a nice dinner, awards, soft goods, warm-ups, a lot of things for them to choose from. We have a rep seminar twice a year where we bring in coaches and different speakers, here again, designed to give them information and help them represent us out in the field.

We've just finished our spring coaches tour. We take our head football coach, head basketball coach for men and women and our athletics director. We go out and visit 36 cities in 42 days, kind of like the Ringling Brothers Barnum and Bailey Circus. We're taking the program out to our donors. We play golf in the afternoon, have a reception and dinner and then the coaches speak to our fans. Our head football coach gives us 10 to 12 dates, head basketball coach gives us 10 to 12 dates, the athletics director gave us 15 dates and the head women's coach gave us about 15 dates. Where we don't have the head football coach, we will have one of his assistants. We spoke about this program to the NAADD group earlier in the week and a lot of folks were surprised we could get this commitment from our coaches. We are very fortunate because they do that for us. We go to a lot of trouble to make them comfortable and make sure everything is organized.

The tape ended here and there was no further taping of this session.