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Subj: Alumni Association Leadership Update: February 2005 Refer to: Central Region Letter 03-05; February 18,
2005 **** Overseas travel delayed me in forwarding this Leadership Update from George Watt ’73, President of the Alumni Association, to you. Here is George’s message verbatim: “February 2005 This edition of Leadership Update is meant to be a mid-point report on the Alumni Association and the Foundation operations thus far in FY05. However, I would be remiss if I didn’t mention the calendar year that just ended: 2004, what a year! The Brigade of Midshipmen can take great pride in a national champion lightweight crew; a varsity lacrosse team going to the final four and finishing second in the nation; winning the Ethics Bowl; an undefeated sprint football team; three Rhodes Scholars and a Marshall Scholar; and, lest we forget, a varsity football team that won its second consecutive Commander-in-Chief trophy, won the Emerald Bowl, claimed 10 wins for the first time in 100 years, finished in the top 25 in both national polls and culminating in head football coach Paul Johnson receiving the Bobby Dodd Coach of the Year Award.
On our side of the wall, we surpassed our original Leaders to Serve the Nation Campaign goal of $175 million and for the first time in the history of the Alumni Association we were able to boast 50,000 members on the rolls. In a recent email to alumni leadership you were notified of the recipients of the 2005 Distinguished Graduate Award. In a ceremony to be held at the Naval Academy on April 15th, four Naval Academy alumni will be honored: Captain Slade Cutter ’35, USN (Ret.); Rear Admiral Robert H. Wertheim ’46, USN (Ret.); Admiral Ronald J. Hays ’50, USN (Ret.); and Mr. H. Ross Perot ’53. The planning for the 2005 DGA event is in high gear and you will soon learn more about this year’s formal medal ceremony in Alumni Hall.
These are exciting times to be associated with the U.S. Naval Academy. See the January-February Shipmate or visit our Web site at www.usna.com to stay current on all the good news. I thank you all for your support through 2004 and your continued support into 2005 and beyond. Without our volunteer leadership such success would not be possible. Campaign and Fundraising Update 2004 was also a good year for the Naval Academy Foundation. As of 31 December we have just over $212 million in documented commitments to the Leaders to Serve the Nation campaign against our ultimate fund-raising goal of $225 million. In calendar year 2004 we realized $28.2 million in total gift receipts, of which $7.3 million were in the form of unrestricted gifts. Considering there was no extraordinary gift in 2004 (as there was in the summer of 2003), these results reflect a very successful year and indicate we are well on our way toward our FY05 objectives and our overall campaign goals. However, with just eleven months remaining in the comprehensive campaign, we have a few important challenges and objectives. As always, we must maintain our focus on unrestricted giving, which provides the lifeblood of the Alumni Association and Foundation as well as important flexibility to the Superintendent. Beyond that, we will finish the job at Navy-Marine Corps Memorial Stadium (including the Bilderback / Moore Navy Lacrosse Hall of Fame). This requires a total of nearly $4 million in net, new commitments. Additionally, we will seek significant gifts for our Athletic Excellence initiative in order to regain the necessary capability and capacity to provide strategic support for all aspects of the physical mission at the Naval Academy. Finally, we have an objective to significantly increase alumni giving participation, and to thereby demonstrate the Extended Brigade’s growing commitment to providing sustaining support to the margin of excellence at USNA. We enter the final year of the comprehensive campaign with confidence, while mindful of the remaining challenges and ever grateful to the thousands of alumni, parents and friends whose philanthropy makes our successes possible. Treasury Report
Financially, we close calendar year 2004 in very good shape – in fact, our revenue and expense performance at the halfway point of the fiscal year is stronger than we have seen in the past at this time. Although November and December are always our best months in gift receipts, this past December was especially gratifying. Total gift receipts in December 2004 were up 45 percent over December 2003 – $6.6 million vs. $4.6 million – and unrestricted receipts were up 15 percent over the same month in 2003 – $1.8 million vs. $1.56 million. In fact, we took in more in gift receipts in December 2004 than our predecessor organizations did in an entire year back in the days before the amalgamation! Investment performance picked up as well during the last quarter of calendar 2004 to finish the year up 8 7/8 percent. When taken together, we are well positioned to complete the fiscal operating budget year in balance, without dipping into our reserves.
As previously reported in the November and December board meetings, we received an unqualified opinion on our audit performed by KPMG for fiscal year 2004. In audit speak, an unqualified opinion is as good as it gets. The treasury team, led by CFO/Treasurer Hank Sanford and our comptroller, Gerrie Farmer, did a magnificent job completing audit work with no material weaknesses noted in controls. It shouldn’t be a surprise to anyone who follows national financial developments to hear that the audit practice has become more challenging and demanding in the past three years. While the Sarbanes-Oxley Act applies only to publicly traded companies, its effects have spilled over to non-profits in a big way. To give you an idea of how much has changed: Four years ago our audit would involve two to three auditors on board for 10-12 working days, completing the process in over the span of a month. This year we started in July with a pre-audit visit for a week plus, followed by a team of four auditors on site for three plus weeks in September, and then a wrap up period of two 3to three weeks. The report was made to the Joint Finance and Audit Committee in November and the two Boards in December. For a small company like ours, this requires a lot of “work months” of intense scrutiny and interaction – not to mention the toll it takes in human capital. We’re not complaining, just advising you on the increased breadth and depth of the audit process in 2004 (and beyond). A formal, hard copy annual report for FY04 is now with the publisher and should be ready for distribution by mid-February.
Membership Drive
At the fall meeting of the Council of Class Presidents, BOT membership committee chairman Dan Lear ’68 asked each class president to name a class membership chairman. Each of the classes in the zone of 1979 and senior were then challenged to attain a goal of 75 percent members. This challenge to classes is a new one and will demand focused efforts by the respective class leadership to achieve their individual goals. Allowing that, it is an essential step as part of our three year Navy-Marine Corps Membership Drive toward our goal of 60,000 members. Ms. Bobbi Collins, Director of Business Operations, is now supervising membership operations and the membership drive and will be working closely with me, COO Terry Murray ’68 and Dan Lear as we work to grow membership and membership services.
We now have 33 businesses signed up as part of our corporate membership program, which has added more than 200 associate members to our rolls. The corporate membership program is in its second year and has had a strong renewal rate. The Board of Trustees formally approved the program as a permanent membership category at the fall meeting.
With an increase in membership comes a corresponding need to provide relevant, value added and responsive services (and service) to the membership at large. In a subsequent edition of Leadership Update and in my next semi-annual report to the Board of Trustees, we will provide a comprehensive view and update on the many services available to our dues-paying members. For now, we remain focused on increasing membership at the Alumni Association while also growing its reputation for providing value-added services to the members. Our ultimate objective is to grow in relevance – strategic relevance to the Naval Academy and to our members.
Facilities Update
The physical plant and spaces of the Alumni Association and Foundation are undergoing a major electrical and communications upgrade that will modernize and enhance capabilities across the organization. Historic Ogle Hall is being brought up to electrical code and the alarm systems and wiring are being upgraded. In the next several months an ancient boiler system will be converted to an electric furnace, roof and gutters will be replaced, and the wood flooring will be refinished. A long-range plan for Ogle Hall will be executed as we move into the next fiscal year and beyond.
Under the executive leadership of Tim Kobosko ’80, the Alumni Association and Foundation will soon be implementing a new, integrated telephone system designed to dramatically improve our service to our alumni and constituents. Currently, there are separate phone systems for our three sub-organizations – the Alumni Association, the Foundation development shop and the Athletic and Scholarship Programs division. Our current systems don’t permit calls to be transferred among the systems, creating barriers that can be frustrating to the person on the other end of the phone. With the new, integrated system we hope to eliminate technology barriers, create enhanced access to our staff and better service to our alumni, parents and friends. The new telephone system will provide direct dial phone numbers for all Alumni Association and Foundation employees, making it easier to contact members of the staff directly.
After the new telephone system is implemented (our current plan is for late February) there will be a transition period during which all current phone numbers will automatically transfer calls to the new phone numbers, a process that will be invisible to the caller. In addition, the Alumni Association and Foundation will continue to use existing main numbers throughout the transition.
A key to a successful, smooth transition to the new telephone system is communication, and Skid Heyworth and the comms team have plans in place to get the word out quickly through a variety of sources, including Shipmate, the web site, e-mails and through training sessions with our employees. Although we intend to move with alacrity, we are more interested in getting this one right – and communication is the critical success factor.
2005 – 2006: Our focus areas
On January 1st of this year, we marked the fifth anniversary of a new synergistic model. Much has been accomplished since “the amalgamation” and regardless of whether you measure success financially, or in fundraising, or in membership growth or in strategic alignment and relevance to the Naval Academy, one gets to the conclusion that our model and our plan are correct. However, the senior leadership team remains focused on the future and on improving our performance in all aspects of the mission.
In 2005, as you have probably already surmised, we will focus on the home stretch of the Comprehensive Campaign. Additionally, we intend to continue to grow and nurture the Extended Brigade. This over-arching initiative will require growth in membership, growth in participation of members, more effective outreach initiatives and increased partnership among the Alumni Association, the Foundation, chapters, classes and clubs. We will work to strengthen the strategic alignment of this coalition of partners to the Naval Academy.
We need to get better at keeping you – our volunteer leaders – and all of our alumni informed so that you can be advocates for today’s Academy and today’s Brigade in the communities in which you live and serve. We will be doing this through our traditional venue, Shipmate, and we will also be using the Web, email, and other technology that we are exploring.
While Shipmate was our most visible communications effort in 2004 with a major re-design, the entire communications organization has been re-structured in order to better coordinate issues across our enterprise and the Academy. We continue to work with our counterparts at the Naval Academy to identify the important issues facing the Brigade and Academy leadership so that we can better tell their respective stories. Our 2005 focus will be on the Web to ensure it is better supporting our communications’ efforts. Additionally, Shipmate operations (to include advertising and production costs) will receive a great deal of our attention now that the bugs of the new design are getting further worked out.
One area of focus that will stay as relentless as ever is that on our financial operations. We will remain diligent on expense control, as we have done for the last four fiscal years, so that we can be the excellent stewards you expect us to be of the funds that are donated for our use. I remain as optimistic as I have ever been that FY05 will be another good financial year for your Alumni Association and Foundation.
In addition to the efforts to achieve our near term and tactical objectives, 2005 will also find the Executive Committee of the Foundation Board of Directors actively engaged in a strategic planning effort to define the priorities for private support in the immediate post-Campaign period, and to chart the Foundation’s course for the future. There will be life after the campaign and many more opportunities to support emerging and strategic needs at the Naval Academy. We must assure we have the right infrastructure in place and that we are “built to last.”
Thank You!
I’ll close the same way I opened by expressing what a great year we are experiencing and thanking each of you for your tremendous support.
I would also ask each of you to re-dedicate your volunteer efforts (time, talents and resources) to the collective mission of the Alumni Association and the Foundation. At the end of the day, we’re all here for one reason and for one reason only: to provide moral, mental and physical (including fiscal) support to the United States Naval Academy. We do that through our members, through our alumni, through our midshipman parents and through the many friends we’ve recruited to our cause. Please let me know what you require from me and our staff to make you more effective as volunteer leaders.
Thanks again for all you’ve done and for all you will continue to do. I look forward to seeing many of you either during my travels around the country or here in Annapolis.
Go Navy!
George
G.P.Watt, Jr. ‘73 President and Chief Executive Officer”
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