These minutes reflect
discussion and debate at a meeting of a committee of the
Minutes
Senate Committee on Finance and Planning
Tuesday, December 20, 2005
2:00 – 4:30
238A Morrill Hall
Present:
Fred Morrison (chair), Arthur Erdman, Thomas Klein, Joseph
Konstan, Michael Korth, Judith Martin, Kathryn Olson, Justin Revenaugh, Alfred
Sullivan, Kate VandenBosch
Absent:
Calvin Alexander, Christina Bachmeier, Rose Blixt,
Charles Campbell, Daniel Feeney, Steve Fitzgerald, Dan Hennen, Lincoln Kallsen,
Ian McMillan, Kathleen O'Brien, Richard Pfutzenreuter, Karen Seashore, Michael
Sertich, Charles Speaks, Thomas Stinson, Susan Van Voorhis, Michael Volna,
Warren Warwick
Guests:
Associate Vice President Gerald Fischer (
[In these minutes: (1) financing the mission: strategies for private support; (2) financing
the mission: leveraging assets; (3)
earmarking federal funds]
1. Financing
the
Due to the necessary absence of the secretary, the chair
of the Committee is providing these abbreviated minutes.
Gerald
Fischer, president of the
It was noted that members of the next generation of major donors to
the University are interested in targeted gifts that will “make a difference”
not only to the university, but also to the community and the world. Part of gift solicitation is listening to the
desires of the donors.
The Committee
also discussed the issue of fund raising for a new stadium. These are targeted gifts that are not
detracting from the University’s efforts to raise money for academic
purposes. Indeed, the stadium
fund-raising has enabled the University to promote the idea of parallel gifts
to the academic programs from these donors.
Mr. Maturi, the director of athletics has been particularly helpful in
promoting the need for academic giving to these donors.
2. Financing
the mission: Leveraging Assets
Vice
President Muscoplat then presented the third of the reports to the
Regents. This emphasizes leveraging
assets for enhanced returns. The current
major emphasis is on the possibility of realizing greater revenue from the
UMORE (or Rosemount) site of the University.
A University task force has been working on this project for over a
year. A copy of the presentation is also
attached to these minutes.
The
University is now in the process of retaining a consultant to help define the
nature of the development that will take place.
The University's primary criterion for development is that any
development must also provide research opportunities. These can be in a variety of fields; beyond
traditional agricultural emphasis of the experiment station. For example, research could be conducted in
construction materials (of interest to architecture and engineering),
transportation issues (of interest to public policy), or to schools for the new
residents (of interest to education scholars).
The list can be expanded.
The Committee
provided some suggestions to Vice President Muscoplat.
3. Earmarking
of Federal Funds.
Mr.
Engelen, the Director of Federal Relations for the University, discussed the
issue of “earmarking” of federal funds.
The University receives about $310 million each year in competitive
federal grants (through organizations such as NSF, NIH, and some other federal
agencies). It also receives about $12.7
million in direct grants authorized by Congress. The “earmarked” grants flow largely to units
in fields in which competitive grant funding is not available.
While
most members of the Committee would prefer to see funding through the
competitive, peer-reviewed processes, the Committee recognized that earmarked
grants are increasingly a fact of life in
The
members of the Committee concurred that requests for such grants should be
coordinated through the President’s office, which would establish
priorities. Access to this funding is a
University resource, which should follow University priorities. Separate requests to members of Congress by
campus or collegiate units or by individual faculty members can be damaging
both to the University’s overall goals and to the chance of success of the
individual project. The University must
present a consistent set of goals to the federal decision-makers.
Respectfully
submitted,
Fred L.
Morrison,
Chair
* * *
PowerPoint Slides, 1. Financing
the
Regents’
September Work Session:
•
Highest growth rate among the U’s major revenue streams.
•
; we now need to
take it to the next level.
•
The U has a collaborative, visionary plan – Big Bold Best – to
accomplish this.
Question: Why do donors make private gifts to a public
university?
Answer: To make a positive difference in the quality
of the institution…to change the world…to give back…to fund initiatives that go
beyond the limits of its core operating budget.
Historical Information:
1985-88,
Minnesota Campaign: Focus: 100 endowed
faculty positions. Result: 111 added.
1989-96,
Mini-Campaigns: Focus: New facilities -- Weisman, Ted Mann Concert Hall Mariucci
Arena, renovated William Arena & Sports Pavilion.
1997-03,
Campaign
Result: All goals exceeded.
2004-Now,
Mini-Campaigns: Focus: Scholarships, fellowships, new
facilities -- On-campus sports stadium,
translational research, Carlson School addition, Bell Museum, Equine Health,
Weisman addition.
From
17 to 390 endowed chairs.
--14% of U’s tenure-track faculty receive support
from private gifts.
--Attract top students, compete for research
grants, transform student lives & careers.
Growth
in scholarships and fellowships.
--$100+M raised in last 2 years.
--Endowment exceeds $279M.
--20% increase in no. of students receiving
support.
Millions
raised for research.
--Helping U find cures, solve profound problems
facing children, families and society.
National Ranking, Gifts and Grants from Private
Sector, 1995-2005
Public & private 11
11 16 18
18 21
16 14 15
15 n/a
Public only 3 4
6 6 6
9 6 4
7 5 n/a
Combined University Endowment, National Ranking,
1995-2005
Public & private 22
24 24
24 24 24
25 25 25
25 25
Public universities 5
5 5 5
5 5 6
6 6 6
6
National Trends:
1. Multimillion-dollar
gifts from donors seeking to change the world – a huge opportunity!
--Donors not motivated by
needs as much as by opportunities!
--Interdisciplinary
programs great opportunity for leadership gifts.
--Growing interest in
seeing more immediate impact.
2. Donors
want to see results, accountability.
--Increasingly, donors
want to know what the measurable outcomes will be before making a sizeable
gift.
3. Sources
of support will change:
--Alumni support critical
to successful campaigns.
--Corporate funding will
grow at much slower rate than in past.
4. Demand
increasing for good, experienced fund raisers.
Largest 10 gifts to universities
--Totaled $757M or average of $76M each.
--7 went to private schools; 3 to publics.
--8 from alumni of those institutions.
--Why did these alumni give?
--Passion for, connection
to the institution
--Desire to have an
impact on the world
--Desire to give back
--Donors:
Duke alumni, volunteers, campaign leaders and parents of Duke students.
--$130M given in 2004 by Peter and Ginny Nicholas
of Duke University in last campaign.
--More than $70M goes to
Duke’s
--Reason for giving.
--“To expand the school’s
influence in undertaking critical research, training future leaders, and
informing the debate about issues that range from global warming to the quality
of our air and water.” -- Peter
Nicholas.
--$100 million gift to
--Donor:
--Reason for giving:
--“The days I spent here
laid the foundation for my career and taught me lessons I will never
forget.” -- Stephen Ross
--“This donation will
animate every part of the business school's aspirations and plans….It will help
our students; it will help students not even born yet.” -- President Mary Sue Coleman
Moving U Development to the Next Level:
--“Big, Bold, Best”
--Strategic plan for development involving every
college and campus.
--Vision
--“Be the best of the best
in university development, supporting the U as one of the top 3 universities in
the world.”
1. Focus
on transformational & major gifts.
--Need large pool of
alumni, friends with affinity, capacity to give, transform the U.
--85% of our gifts came
from 1% of our donors during last campaign.
--Only had 1 donor giving
$25 million+ in last campaign.
2. A
compelling case
--Aligns U’s vision,
strengths, priorities with donors’ dreams, passions & goals.
--Options going forward
--Interdisciplinary
focus?
--Targeted,
focused on specific needs?
--Broad-based
appeals?
--Combination
of the above?
3. Leadership
commitment and focus
--Integration of private
support into U’s long-range planning.
--U leaders committed to
building strong relationships with alumni, donors.
--Volunteer leaders
meaningfully engaged in life of U & fund-raising.
4. A
top-quality development operation
--Ability to attract,
retain top professional talent.
--Effective coordination
in decentralized culture.
--Strong central
services.
--Budget appropriate for
the potential.
--Cost
to raise $1 at the UofM has averaged only 9.4 cents annually for past decade.
--ROI: $7-$15 raised for each $1 invested in
development
Questions for Today:
1. What
will be the role of private support in future funding of the U?
2. Will private support continue to fund
the “margin of excellence” or are there ways it can contribute to the U’s core
funding?
3. What
are critical success factors in raising higher levels of private funding?
4. Are
we positioned for success?
* * *
PowerPoint slides, 2. Financing
the mission: Leveraging Assets
Revisiting the Context from
September 9 Regents Meeting: We must
align our financial and strategic investment strategies to support the goal of
becoming one of the top three public research universities in the world, with similar high aspirations for our
coordinate campuses and state-wide centers according each one’s unique
signature and aspirations;
State
Support: $614 million in FY06, 14% of state support is restricted by statute
(state specials), increases and decreases in state support are influenced by
the economy, competing pressures on the state, and political decision-making. The University will continue to require a
long-term, enduring partnership with the state to be successful. New and enhanced revenue streams must
supplement, not supplant state support.
UMore
means:
UMore
can be:
Students
Research
Place
Public
Engaged
Place
Largest
undeveloped University-owned acreage contiguous to any major
Relative
Size
7,686
Acres
12
Square Miles
By
Comparison;
Golden
Valley 10.5 sm
Good
neighbors want to know, the Metro Council wants to know? What is the future of
Impact
pressures on
--Residential and commercial expansion desires
--
--
--Rosemount sewage interceptor
--City of
--
--Air cargo transport Location
--Aggregate/gravel 3,000 trucks!
--Gopher Ordnance Works
--Ongoing research projects
--Pressure from current tenants
History of Gopher Ordnance Works: In 1942, US Military appropriated land, US
Military started Gopher Ordnance and produced smokeless gunpowder, Operated
only 9 months; stopped 1945, Employed 12,000 workers, 12,000 acres in origin, 1947
[4,687A] & 1948 [3,320A] transferred to the University for $1, 7,686 acres
remain owned by University of Minnesota today.
UMore Park Planning Efforts by President Robert
Bruininks: UMore Park Executive
Committee formed June ‘04, Guiding principles established, Report to President
Bruininks and to the Board of Regents in September 2005, Executive Director
appointment: Larry Laukka, Regents’ presentation November 10, 2005.
Executive Committee Enacted June 04: Charles Muscoplat, Gerald Fischer, Thomas
Fisher, Steven Goldstein, Robert Jones, Larry Laukka, Kathleen O’Brien, Richard
Pfutzenreuter, Alfred Sullivan; ex officio, Dewey Thorbeck, Philip Larsen, Ken
Larson; Met 16 times between June 2004
and August 2005
UMore: Guiding Principles: Foremost to advance University’s fundamental
academic mission, To respect the needs of local, regional and state governments,
To maintain oversight over future uses of UMore Park, To ensure that
development is conducted with fairness and integrity, To improve the financial
health of the University.
Board of Regents and UMore: Key Policy Issues: How can the U maximize academic and financial
value to support the research, education and engagement mission of the
University? What is the appropriate
management strategy for the property – now and for the future – to realize the
goal of becoming among the top three public research universities? How to respect the goals for UMore while
respecting the goals of local, regional, and state jurisdictions? Can any of the approaches to the
Why Plan NOW?
UMore: Overview:
7,686 acres: Rosemount Research
and
UMore Park: Current Research: College of Architecture and Landscape
Architecture, College of Biological Sciences, College of Natural Resources,
College of Agricultural, Food and Environmental Sciences, College of Veterinary
Medicine. Approximately 35-45 faculty
from these colleges, along with their research assistants, are engaged in
research activities in the following areas:
Animal and livestock research, crop research, environmental research,
veterinary medicine and medical research, architectural research, extension and
outreach, stormwater, renewable energy, and land-use planning
UMore: Key Internal University Constituents: University officers and administrators, Administrative
units (finance, real estate, facilities, capital planning, OGC, University
relations, etc.), Board of Regents, Other University departments: police,
storage, firing range, Deans and senior academic administrators, Faculty,
students and staff, Alumni and donors
UMore: Key Constituents: UMore Park staff, Citizen advisory council, Master
gardeners, Tenants, Stakeholder groups: Agricultural
commodity groups, governmental agencies, equestrian, anti-sprawl, environmental
activist groups, NGOs, press, cities, townships, state and federal government
policy makers, etc.
UMore: Key UMore Constituents: State, local and regional government
constituents, High elected officials, Met Council--Urban services, Dakota
County--Regional parks/Roads and services, Rosemount--Land-use/zoning/Sewer and
water/Schools, Empire Township
Taking Stock of UMore: Where are we at the Midpoint
of this Presentation? Land for research
and land rentals, Land for miscellaneous leasing or portions of UMore are
currently underutilized, undervalued or simply unused, Change
is happening now 360 degrees around UMore Park; The University of Minnesota is
in strategic change mode.
External factors may be changing or restricting our
degrees of freedom. Will delay result
in restrictions on our options?
The Future of UMore: A people place, A renewable energy and
environment place, A healthy foods healthy lives place, A place for discovery
and learning, A place of community and regional value, A national model of
development, A place contributing to the financial health of the University. NOT FOR
Planning for the Future of UMore? Enhance the University’s legacy and enrich
the greater community. A Once-Ever
What will UMore Become?
Strategic Action Steps: Inventory the UMore Assets, Examine the
strategic forces shaping, and those likely to shape the future of this asset, Academic
needs inventory – needs to be top 3, Financial needs and risks inventory, Market
forces study, Government interests and pressures, Political realities, Social
issues and social opportunities, Regional Economic Development
RFP for UMore Planning: 17, 2006:
We expect a pool of world-class respondents who can help establish a
vision, help us define our program of uses, and help us evaluate the economics
of any potential plan, Selection anticipated in early 2006, Return to the Board
of Regents with proposals for a strategy and seeking approvals in the coming
months.
Strategic Planning Objectives: Assist the University with developing a
high-level vision for UMore Park, Refine and define a program of uses for the
land, Develop a timeline for achieving the vision, Develop a "financial
pro forma" for the property.
What will UMore Become? Will promote research and academic values, Will
be an opportunity for a community, Will ensure education and lifelong learning,
Will provide for service and engagement, Will adopt emerging technologies, Will
add value, both academic and financial, Will be for the PUBLIC GOOD. Not merely financial, nor merely
academic. It is an integration
that creates value – and that value will multiply for our sons and our
daughters, and their sons and their daughters and all who follow. Financial gains are to be preserved and
reinvested in perpetual endowments for furthering the academic mission of the
Let’s do UMore, not because it is easy, but because
it is hard. UMore requires staying
power, as every step along the way will be challenging, arduous and yet
rewarding. If you think it is hard now,
hopefully it will be only that easy.
Well worth it! It is our duty!