Finance Board Report

April 28-29, 2017

The accompanying financial statements present financial results as of and for the nine months ending March 31, 2017. The statements reflect a modified cash-basis income from operations of $200,556 compared to a budgeted loss of $59,754 before capital expenditures – a positive budget variance of $260,309. Year-to-date capital expenditures of $6,594 compare favorably to year-to-date budgeted capital expenditures of $37,500.

Total net assets increased by $981,249 from June 30, 2016 due to the income from operations and unrealized gains on our long-term investments managed by the KU Endowment Association. The market value of Endowment’s long-term investment pool has increased by about 4.7% for the period July 1, 2015 to February 28, 2017, net of a year-to-date income distribution of roughly 3.5% per Endowment’s spending policy.

The overall positive operating budget variance of $260,309 reflects the following factors:

REVENUES [positive variance of $44,814]:

  • Membership dues are short of goal by $37k and but exceed last year by $5k. Caveat: Recall that we budget and report dues revenue on a cash basis for internal purposes, so a portion of this revenue will be deferred at year-end for external reporting purposes.
  • Sales and commissions are behind budget in Banquet Services ($29k) and Advertising ($21k), although in the case of Advertising, the positive results from Corporate Sponsorships should be considered in conjunction with overall sales.
  • Unrestricted contributions (principally Presidents Club) continue to exceed budget ($26k) and last year ($60k).
  • Corporate Sponsorships exceed both budget ($69k) and last year ($67k), due to new efforts initiated in Business Development.

EXPENSES [positive variance of $215,496]:

Expenses are under budget in many areas, with a few negative variances. Some budget differences are likely temporary and will likely partly or wholly reverse. Notably:

  • Professional fees reflect a negative variance of $19k. This variance includes $38k of an expected $65k for architectural and design fees associated with renovation and/or expansion of the Alumni Center, with $25k actually budgeted.
  • Postage was over budget $26k in part due to the highly successful Charlie Hustle t-shirt Member APPreciation promotion – some 6,000 t-shirts were shipped to members.
  • Public relations, auxiliary events, and travel have a combined positive budget variance of about $114k, due to continued staff efforts to control costs at events and reduced emphasis on visits to smaller out-of-state networks. March travel was less than budgeted because post-season basketball travel was to relatively economical venues (e.g. Tulsa and Kansas City).

FY18 BUDGET ASSUMPTIONS

One of the Strategic Plan linchpins is to enhance and build resources, creating future capacity to support programs and services. This is particularly critical given uncertainty with credit card royalties (contract renewal in 2020); University support of records, and license plate royalties. Our objective for the FY18 budget was to reallocate existing resources to and create new resources for areas of strategic priority, while simultaneously increasing the cash contribution to our bottom line from $50k to $150k. The proposed FY18 operating budget of $5.873 million reflects a 4.23% increase:

REVENUES:

  • Although our goal for overall Membership Dues shows an increase of only 1.19%, the challenge is greater than it appears on the surface because it includes (1) we are slightly behind budget for the year-to-date, (2) $20k of revenue earned from Future Jayhawks was eliminated as that program phases out - allowing allocation of additional resources to alumni memberships and Business Development, and (3) a continued decrease in Student Alumni Association dues as we transition to a situation where all KU undergraduates become members of the Student Alumni Association at no cost - a transformative change allowing us to better engage students and transition them to alumni.
  • Royalties were increased, due to guaranteed contractual payments and continued positive license plate revenues.
  • Overall Sales were increased, mainly due projected growth in Advertising and Corporate Sponsorships resulting from the additional resources proposed to be allocated to Business Development.
  • Although there has been no official word even for FY17, University Support of Records was decreased by an additional 5% over FY17’s forecast in consideration of the current legislative environment and continued risk of cuts to higher education funding. FY17 had been reduced 5% over FY16 for the same reasons.
  • Endowment Support has increased $15k as part of Endowment’s partnership in the aforementioned plan to transition all undergraduates to Student Alumni Association members.
  • Investment income increases are consistent with recent endowment gifts and a 1.5% inflation adjustment per KU Endowment’s “Constant Growth” distribution policy (benchmark is CPI-U).
  • Contributions increased overall:
  • Unrestricted fund-raising (e.g. Presidents Club) was modestly increased based on recent trends and changes in strategic priorities that include new revenue development.
  • Fund-raising event net revenues were projected to decrease based on recent results.
  • $53k was added for program restricted contributions associated with a proposed University-wide student and alumni mentoring platform further described below.

EXPENSES:

  • Salaries and Benefits include modest performance and market increases, although the overall expense is projected to increase slightly over 5% because (1) we will be adding one new FTE, (2) filling a vacant position; and (3) reallocating responsibilities to better focus on strategic priorities in Business Development, Students, and Digital Media.
  • Professional Fees and Freelance have increased. Although the $25k allocated in FY17 for the Strategic Facilities Planning Task Force was eliminated, FY18 includes a proposal to add an online platform for alumni and student mentoring with the potential to engage students, young alumni just starting in their careers, and more established alumni.
  • Public Relations/Hospitality in several areas continues to decrease based on current trends and continued emphasis on quality over quantity. Some amounts allocated for the Student Alumni Association in FY17 have been reallocated to the above student and alumni mentoring opportunity.
  • Printing, Postage, and Calendar/Annual Report reflect decreases associated with a recently rebid printing contract for Kansas Alumni, continued inclusion of our annual report within Kansas Alumni rather than as a separate printed piece, and certain other efficiencies.
  • Travel in several areas was decreased due to changes in strategic priorities.

Rock Chalk!

Jodi NachtigalDwight Parman

ControllerSenior Vice-President for Finance and Human Resources

Report to the Board of Directors

Information Systems and Alumni Records

April 2017

January, February and March Productivity

We recorded 24,700 biographical record changes including over 8,300 address updates, and completed four coding projects requested by different campus units.

Technical Projects

In a joint project with the KU Endowment Association, we contracted with an external vendor to compare components of our alumni records to the vendor’s extensive consumer database.

We are currently working on creating an email to some of the alumni the vendor shows with an updated mailing address to encourage them to verify the new data. From email data provided by the vendor we were also able to validate almost 1,800 new email addresses for current and former members. We expect to begin reviewing other subsets of the email data shortly.

Membership Projects

With the recent load of the May 2017 degree candidates from KU we are working on getting the gift memberships loaded onto these records. We also pulled a list of parent members for the candidates so the Membership staff can send out a parent gift life membership offer.

Future Alumni Records Projects

With the success of the membership biographical update solicitation last year, we will be working with the Membership staff to send out small batches of these mailings throughout the year. The low-key solicitation brought in a substantial number of annual memberships while prompting over 3,000 alumni to update their records, and we hope to replicate that success.

Stefanie ShackelfordBill Green

VP for Alumni and Membership RecordsSr. VP, Information Systems and Services

Alumni and Student Programs Board Report

Spring 2017

Greeting from the Hill! The programs department has had a very busy and productive winter yet again. We are excited to share our team’s progress and to welcome you all to this year’s Rock Chalk Ball!

Some important points for you all in advance of our meeting that cover the time since we were together in early February:

  • The Jayhawks’ run through March Madness was a highly effective tool to connect and unite alumni across the country. Nick Kallail and Danny Wood in particular deserve credit for generating record levels of activity on social media and at our watch sites. Things culminated with a high of 68 watch parties for the Elite 8 game against Oregon. Our dynamic networks duo has already rolled out “off-season” programming guides to ride this enthusiasm with events through the summer.
  • In Kansas City, we had a tremendous first win for our newly-created Career Networking Committee with a program title, “KU Builds KC: Smart Cities” with an all-star engineering panel. Nearly 100 KC-area Jayhawks registered for the event that was emceed by Clint Robinson, e’85, g’91, of Black and Veatch. We also charted a bus for SAA members to be able to attend the event and hear from and network with some of our best alumni. Kelsey Hill and Calvin McConnell both deserve a lot of credit for getting this event off the ground and we can’t wait to see what the group does next as we seek to do these on a quarterly basis.
  • Student programs is in the thick of a very busy and productive spring semester. In terms of events, we brought back food trucks for our last a new event titled Home Baseball Friday and again had record crowds and lines forming before the event even started. Kudos to Kiley Gilmore and her SALB team as we’ve learned that the buzz from doing something that can’t be done elsewhere on campus is a strategy that we will look to build upon in the future. Additionally, we had one of our most successful Networking Nights to date with a panel focused on careers in the sports industry. 95 students attended the event that featured 13 alumni speaking about how KU helped them to get where they are today.
  • Our annual Gold Medal Club and 50-year Reunion run by Michelle Lang was held during the first weekend of April and featured 123 Jayhawks returning to campus to collect their Gold Medal Club pin and connect with friends. Combining these two groups onto one has certainly proved to be a smart move in terms of resources used, but we will continue to monitor its status as class sizes increase and class affinity decreases.
  • Finally, Joy Maxwell has partnered with KU Admissions and the KU Provost’s office for a new venture in student recruitment. The week after the Rock Chalk Ball will see a coordinated effort to place “Rock Chalk Ready” yard signs in front of the homes of all incoming KU freshmen in KC, Lawrence, Topeka and Wichita. The hope is that this will create a strong visual presence in those locations to show who is headed to KU in the fall and get underclassmen thinking along those lines as well. The University of Alabama has had great success with a similar program that we hope to grow over time to reach as many incoming students as possible.

Thank you, as always, for your leadership in making KUAA such a strong organization that is such a positive resource for KU. Rock Chalk!

Brad Eland, Vice President of Alumni and Student Programs

Digital Media & Marketing Board Report

April 2017

Staff update

On March 15, Kara Rodriguez gave birth to a baby girl named Adrian Anna at Lawrence Memorial Hospital. This is the first child for Kara and her husband Cesar. While Kara is on leave until June, Debbi Johanning has stepped up to manage emails for membership, programs and KU units, receiving help on broadcast emails from our intern, Abby Stuke, a KU journalism senior in strategic communications who is graduating in May.

We are also moving forward with a position description for a digital media coordinator, adding one full-time staff member to our digital media team. The addition of this position will significantly enhance the Association’s digital footprint and expand our reach in support of the entire organization. We expect strong candidate interest in this opportunity.

Data integration

Our data integration leadership group has been meeting to advance several data-related projects, identifying our top priority as membership forms in iModules. We are working to fully utilize our online community platform, and our current 3-year agreement will expire at the end of June 2018, so we are simultaneously investigating online solutions to supplement or potentially replace iModules as due diligence. One provider we are evaluating is called Salesforce.

I will unfortunately miss the board meeting while I attend the Salesforce Higher Education Summit hosted by the University of Texas System. Salesforce is one of the most widely used CRM platforms, and their associated technologies would help us identify and leverage data insights associated with our communications and business practices. Salesforce could be used to supplement existing systems, providing integrated dashboard analytics, with the potential to replace certain systems down the road. The university may also have an interest in Saleforce, as a possible enterprise CRM solution.

We are also moving toward an agreement with PeopleGrove, an online mentorship platform, in collaboration with seven other KU units. The Alumni Association has taken the lead on negotiating an agreement that will benefit all of KU, leveraging our central alumni database to fuel the platform. We hope to have an agreement by summer, with buy-in from campus.

Student and alumni apps

App numbers continue to grow (downloads: 8,240 alumni, 1,484 student, 61 JHE), but student engagement growth slowed throughout the year. The student app is being redeveloped for summer. Meantime, marketing for the alumni app will ramp up for commencement, including an animated video tutorial.

–David Johnston

Communications Report

May 2017

Jayhawks for Higher Education

We have urged Jayhawks for Higher Education to contact their legislators during April and encourage their support for stable higher education funding during final budget negotiations, which will begin May 1, when the Legislature reconvenes for the wrap-up session. Kelly Reynolds, KU director of state relations, predicts that lawmakers will remain in Topeka until early June or later because so much work remains to be done. One encouraging note Sen. Vicki Schmidt’s work with KU and K-State on a proposal to restore equity to higher education funding by fiscal year 2019 and eliminate the deeper cuts that KU and K-State suffered this year.

Sen. Schmidt, a KU pharmacy graduate in Topeka, is one of 24 KU alumni in the Jayhawk Caucus. Over the summer, we hope to connect with the seven senators and 17 representatives to create a mentor program linking them with students from the districts and alumni volunteers. You will hear more about this at the Board meetings next week and in the fall.

Kansas Alumni magazine

Now that our printing contract is final, we can focus on our editorial plans for future magazines. Of course, we’re eager to share KU’s most important story: the selection of a new chancellor. After we report the news in digital media, we will feature a larger, more detailed profile of KU’s new leader in the cover story of Issue 4, which will go to press in early July.

Student Alumni Association

Summer is prime time for planning, and one of our biggest challenges will be to create a communications strategy for the expanded Student Alumni Association. In fall 2017, all undergraduates will receive free four-year SAA memberships, but students will need to activate their memberships and download the app to receive their benefits. The Communications, Marketing and Records Committee will brainstorm about the SAA campaign during a conference call April 18, and we will build on those ideas with our staff team to create our plan.

Other priorities and projects

KU’s leadership transition also will influence many other aspects of our communications. If the Regents choose a leader from outside KU, our team must help explain the Association’s vital role in strengthening the University—and demonstrate our organization’s value in helping the new chancellor connect with alumni and ultimately achieve his or her goals. If the Regents choose an internal candidate, our strategy shifts slightly, but we still will need to affirm the Association’s critical importance and highlight the specific ways in which we advocate for KU, communicate in all media, recruit students and volunteers, serve KU alumni and students, and unite all Jayhawks.

We also will create promotions for the summer membership campaign, the Fred Ellsworth Medallion celebration, Homecoming and the Jayhawk Roundup.