MINUTES
THE BOARD OF DIRECTORS OF THE
KANSAS UNIVERSITY ALUMNI ASSOCIATION
FRIDAY, JANUARY 15, AND SATURDAY, JANUARY 16, 2016
ADAMS ALUMNI CENTER
Present:Richard E. Putnam, Chair
John W. Ballard III
Luke B. Bobo
Aaron R. Brinkman
Donald R. Brada
James E. Bredfeldt
Kevin E. Carroll (Friday only)
Marci K. Deuth
Debi Dennis Duckworth
Gregory E. Ek
John H. Jeter
Cory L. Lagerstrom (Friday only)
Jill Simpson Miller
Camille Bribiesca Nyberg, Immediate Past Chair
Cindy EmigPenzler
Lori Anderson Piening
Mark C. Randall
Ellen O. Remsing
Albert I. Shank Jr.
Scott R. Seyfarth, Chair-Elect
Jerry D. Skillett
Timothy T. Trump
Heath Peterson, President
Brad Eland, Vice President of Alumni Programs
Emily Ellison, Alumni Programs Coordinator for Operations
William S. Green, Senior Vice President for Information Systems
Bryan E. Greve, Senior Vice President for Hospitality Services
Teri Harris, Vice President of Membership
Heather Plante Hawkins, Executive Assistant to the President and Donor Relations Coordinator
Kelsey Hill, Alumni Programs Coordinator
Paige Pendarvis Hofer, Student Programs Coordinator
David Johnston, Vice President of Marketing and Internet Services
JaceyKrehbiel, Alumni Programs Coordinator
Calvin McConnell, Associate Development Director for the Alumni Association at KU Endowment
Michelle Miles Lang, Director of Alumni Programs
Joy Larson Maxwell, Director of Legacy Relations
Danny Lewis, Director of Alumni Programs
Jodi Nachtigal, Controller
Dwight S. Parman, Senior Vice President for Finance and Human Resources
Jennifer Jackson Sanner, Senior Vice President for Communications and Corporate Secretary
Ben Shepley, Director, Adams Alumni Center
Laura Stephens, Assistant Director of Hospitality Services
Angela RiffeyStorey, Vice President for Donor Relations
Dan Storey, Staff Photographer and Videographer
Stefanie Shackelford, Vice President of Alumni Records
Tegan Thornberry, Assistant Director of Membership
Betsy Winetroub, Director of Kansas City Programs
Susan Younger, Creative Director
Absent:Carrie W. Coulson
Missy Hodge McCarthy
Shelle Hook McCoy
Dave B. Roland
Danielle Lafferty Hoover, Assistant Director of Kansas Programs-Wichita
CALL TO ORDER:
Mr. Putnam called the meeting to order at 1:15 p.m. and asked for a motion to approve the minutes from the meeting held September 11-12, 2015. Dr. Jeter made the motion, seconded by Dr. Brada, and the Board unanimously approved the September minutes.
EXECUTIVE COMMITTEE REPORT:
Mr. Putnam briefly outlined the results of the Board’s self-evaluation. As in other recent surveys, the overall comments were positive, he said, with helpful suggestions regarding increased communication between Board meetings and the need to provide members earlier notice of committee agendas and other details. Mr. Peterson and the staff have responded and will continue to add improvements, including the addition of staff photos to accompany all written reports. Mr. Putnam said he welcomed additional conversation regarding the length, format and room setup for meetings.
Mr. Putnam and Mr. Peterson reported on staff additions and promotions:
• Calvin McConnell is the Association’s new development officer at KU Endowment. He succeeds Mrs. Storey, who in September moved to the Association as vice president of donor relations. Mr. McConnell previously worked for the KU Office of Admissions.
• Mr. Eland is now vice president of alumni programs, and Mr. Peterson thanked him for his leadership. He has overseen programs since Aug. 1, when Mr. Peterson became interim president.
• Mrs. Lang now directs academic programs, filling Mr. Eland’s former role. She has earned respect across campus, Mr. Peterson said, during her eight years as director of the Kansas Honors Program. In February, Mrs. Lang and Mr. Eland will start the search process for a KHP coordinator who can begin training in the summer as the staff and volunteers prepare for events during the 2016-’17 academic year.
• Mrs. Hawkins now coordinates donor relations in addition to her duties as executive assistant to the president. She has assisted in stewardship of Presidents Club donors in recent years, and her responsibilities will increase as the number of donors continues to grow and Mrs. Storey implements a more detailed stewardship program.
Mr. Putnam thanked members of the search committee for their thorough review of candidates last fall and their recommendation that Mr. Peterson become the Association’s president. He said the Association was fortunate to have Mr. Peterson and an experienced staff in place when campus protests and discussions of diversity and inclusion began the very week that Mr. Peterson was named president.
Mr. Putnam thanked Board members who shared their views during the campus discussions, explaining that Mr. Peterson reported alumni concerns to Chancellor Bernadette Gray-Little and campus leaders and offered the Association’s assistance. Teresa Clark, president of the KU Black Alumni Network, also wrote a letter of support to the Chancellor, which she shared with Mr. Peterson.
The Executive Committee also discussed the staff’s plans to update the Association’s 2012-2017 Business/Strategic Plan, which former president Kevin Corbett and former national chair Jay Howard had developed with the Board and staff. Mr. Peterson and senior staff members will meet January 18 to begin creating a new document, which will outline goals for the next three years. Mr. Carroll recommended that the staff create an annual “score card” for the Board to measure progress and refine goals if necessary.
Mr. Putnam also reported that the Executive Committee had discussed the best procedures for reviewing the Association’s employee handbook. The Audit Committee has periodically reviewed the handbook, and Dr. Bredfeldt had suggested that the Executive Committee also participate in the review process, especially regarding matters that do not involve financial issues, because the Executive Committee has the authority to act on the Board’s behalf between general meetings. Mr. Putnam said the Executive Committee hadagreed with Dr. Bredfeldt. Reviews of the handbook will begin with the Audit Committee, which will make recommendations to the Executive Committee for final consideration.
Mr. Putnam shared the latest developments regarding the Alumni Center’s future expansion. The two water tanks adjacent to the Alumni Center parking lot will remain in their current location because the City of Lawrence cannot afford the cost of moving them to the west side of Oread Avenue. With this option eliminated, Mr. Peterson developed a proposal for a new Task Force on Master Strategic Facility Planning to resume intensive study of the remaining options for expansion. He recommended that Mr. Carroll, who was the first director of the Alumni Center in 1983, chair the task force. Most recently, Mr. Carroll supervised the expansion of the Atlanta Athletic Club as its chief operating officer and general manager. The Executive Committee approved the formation of the group, and Mr. Putnam thanked Mr. Carroll for agreeing to lead the task force, which will include Board and staff members.
In response to a question from Dr. Jeter, Mr. Putnam affirmed that the Association has received a $2 million pledge for expanding the Alumni Center to provide additional student programs. Mr. Peterson added that another donor, who has designated a $20 million estate gift for the Association, also has endorsed the plans for expansion.
FINANCE COMMITTEE REPORT:
Mr. Ballard reviewed the January 14 Finance Committee meeting and thankedMr. Parman, Mrs. Nachtigal and other staff members for their outstanding work. Mr. Parman presented the financial statements as of and for the five-month period ending November 30, 2015, which reflect a modified cash-basis loss from operations, but the loss is smaller than predicted. The loss totaled $84,849, compared to a budgeted loss of $114,414 before capital expenditures, resulting in a positive budget variance of $29,565. A loss from operating activities is typical during the fall, Mr. Parman explained, because of the cyclical nature of the Association’s finances.
Mr. Parman also reported that unrestricted gifts had increased since the November 4 hiring of Mr. Peterson as president, and he expects that trend to continue. Fifteen new donors joined the Presidents Club in December.
The committee also reviewed the Association’s insurance coverage, which includes a new cyber security policy to protect against fraud or a breach of the alumni database. KU Endowment also carries cyber security insurance coverage to protect the database, which both organizations share, and Mr. Seyfarth recommended that each organization be added as additional insuredson the other’s policy.
Mr. Parman also reported that KU’s information technology department vigilantly monitors “phishing” attempts to trick organizations into releasing passwords, and the IT staff immediately notifies the campus of any widespread phishing schemes. Dr. Jeter commented that the culprits behind “phishing” are becoming more sophisticated, and he recommended that staff receive training in cyber security.
The Finance Committee also discussed KU Endowment investment policies and practices. James Clark, Endowment’s new treasurer and senior vice president for investments, will be invited with the Alumni Association’s Finance and Audit committees to review these policies at some point in the near future.
Regarding the financial statements, Mr. Brinkman asked about the reduced expenses for public relations, travel and printing. Mr. Parman replied that the savings in printing occurred largely because of the timing of membership campaigns, and the reductions in public relations and travel resulted from the use of new Key Performance Indicators, which monitor the progress of all alumni networks toward specific, measurable goals. The KPIs help staff manage expenses efficiently and focus spending on the larger, more critical geographic markets, Mr. Parman said.
FAR ABOVE CAMPAIGN UPDATE:
Jerome Davies, KU Endowment senior vice president for development, thanked Mr. Peterson and Mr. Parman for their report to Endowment’s executive committee regarding the Alumni Association programs that are supported by Endowment’s annual $500,000 grant. Mr. Peterson and Mr. Parman demonstrated to the committee members that “there can be no greater investment than in the relationships cultivated by the Alumni Association,” according to Mr. Davies.
Mr. Davies reported that since the Far Above campaign surpassed its $1.2 billion goal in December, fundraising has continued, and the total raised is now more than $1.5 billion. The Board applauded the news. He credited the Alumni Association for its support of the campaign, which was vital to its success, he said, adding that the Association’s five “brand pillars” provide an impressive summary of the Association’s work to advocate for KU, communicate to Jayhawks in all media, recruit students and volunteers, serve KU and fellow alumni, and unite all Jayhawks. Many gifts to the campaign resulted from the relationships that Alumni Association staff and volunteers have cultivated in recent years, Mr. Davies said.He shared a few campaign highlights:
• $1.2 billion of the $1.5 billion raised thus far is in cash or will be in hand within six years. Only $267 million is deferred through bequests.
• Until thecampaign ends on June 30, 2016, Endowment will continue to seekfunds to support student scholarships as well as faculty and staff.
• One-third of KU’s current faculty members are older than 65, so recruitment of new faculty will be a top priority for the University.
Mr. Ek asked about the ratio of endowed funds to spendable funds included in the $1.5 billion raised, and Mr. Davies replied that 60 percent of the gifts are endowments. He noted that, because of the many construction projects currently underway at the University, spendable funds are in great demand. Mr. Carroll commented on the tremendous backlog of deferred maintenance at KU and other Kansas Board of Regents universities, and asked how KU and Endowment leaders plan to prevent the eventual repair and maintenance costs required for new projects from adding to the backlog in the future. Mr. Davies explained that in 2012 the Regents established a policy requiring that all new buildings include endowed funds for future repairs and renovations. He cited the example of KU alumnus and former Kansas legislator Carl Krehbiel, who set aside money to maintain the Krehbiel Scholarship Hall as part of his gift to fund the project because he understood the state’s ongoing challenges regarding deferred maintenance.
Mr. Seyfarth inquired about the future of residence halls, especially with the growth of large private apartment developments near campus. Mr. Davies said the University would add residence halls to accommodate an anticipated growth in enrollment, especially among international students, and to replace outdated campus residential options, including Stouffer Place (which will be razed), Oliver Hall and Jayhawker Towers. In fact, KU’s Central District project will include a 675-unit apartment building. In early January, the University sold bonds to fund a $350 million project to include the apartments, a new student union to replace the Burge Union, parking garage and, most important, an Integrated Sciences Building to replace the obsolete research and teaching facilities in Malott Hall, KU’s longtime hub for the sciences, which was built in 1950. Mr. Davies explained that the Central District project is an innovative public-private partnership, known as “P-3,” which public universities around the nation are considering as state funding continues to decline. As part of the P-3, KU created the KU Campus Development Corporation, a nonprofit corporation organized as a Limited Liability Company, or LLC. The bonds were issued by the Wisconsin Public Finance Authority, and a private firm, Edgemoor Infrastructure and Real Estate LLC, will oversee the construction, operations and maintenance of the Central District property, which KU will lease over 30 years. Revenue from the parking and residential facilities and increased tuition from enrollment growth will fund the lease payments.
Mrs. Piening asked about the challenge of educating state legislators who mistakenly believe that private funds from the Far Above campaign can replace state appropriations for public universities. Mr. Davies said that KU Endowment has purposely avoided public fanfare regarding the campaign’s success, and the foundation maintains a low profile despite its ranking among the top public-university foundations nationally.
Mr. Ballard asked whether the University’s experience with the P-3 for the Central District had been positive thus far, and Mr. Davies replied that Chancellor Bernadette Gray-Little studied the concept for a year before deciding that the University should proceed; in fact, she concluded that KU would incur a greater risk if it did notpursue the P-3 opportunity. He further explained that Kansas statute currently requires these partnerships to be approved only by the Regents. KU leaders have secured Regents’ approval, and both KU and the Regents have kept the Legislature informed throughout the process. Even so, there is concern that some legislators might want to seek approval in the future or try to put limitations on the Central District project that would impede its progress in meeting the three-year deadline for completion (and the one-year deadline for the new apartments to open).
Mr. Ballard commented that in recent conversations with Doug Girod, KU Medical Center executive vice chancellor, Dr. Girod has emphasized that P-3s are an entrepreneurial necessity for the Medical Center and researchers to pursue advances in drug discovery and treatment.
AUDIT COMMITTEE REPORT:
Reporting on behalf of Mr. Ek, Mr. Parman said the Association filed its Internal Revenue Service Form 990 on November 15,after the Audit Committee’s final review of the document. In addition, the independent auditors’ report for fiscal year 2015, which the Board had accepted in September pending the completion of Agreed-Upon Procedures as part of KU Endowment’s audit, was finalized with no additional changes.
PROGRAMS AND SPECIAL EVENTS COMMITTEE REPORT:
Mr. Brinkman commended Mr. Eland and the alumni programs staff for their continued successful collaboration on major events, especially the Rock Chalk Ball last April in Kansas City and the Jayhawk Roundup October 3 in Wichita. The Roundup raised $62,000—20 percent more than in 2014. Mr. Brinkman thanked Mrs. Nyberg and her husband, Glenn, for chairing the Roundup and Mr. Ek for recruiting a record number of sponsors. He said Mrs. Hoover, who led staff efforts on the Roundup, had participated in the committee meeting via telephone from Wichita because her second child is expected to arrive any day.
Mr. Brinkman reported that after thoroughly researching various options, staff members have decided to use a mobile bidding system at this year’s Rock Chalk Ball on April 23 at the Overland Park Convention Center. The Association will encourage participants to download a mobile application that enables them to bid on auction items using their smart phones. The Association will provide advance instructions via email; during the event, staff members, Student Alumni Leadership Board volunteers and representatives of the app company will provide on-site assistance and additional tablets and smart phones for participants who need help with their bids. The app providers estimate that the number of bids will increase and the checkout process at the end of the night will be much more efficient. Mr. Seyfarthand Mr. Skillett attested that mobile auction bidding had dramatically increased proceeds from fundraising events in their communities.