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Subj: Alumni Association Leadership Update; July 2005 Refer to: Central Region Letter 14-05; July 27, 2005 **** George Watt ’73, the Alumni Association President, has issued another Leadership Update. It is forwarded below verbatim for your information.
”Since we last met in the spring, we’ve experienced some exciting and emotional times at the Naval Academy Alumni Association and Foundation. As most of you know, we have recently lost three of our most distinguished graduates. Rear Admiral Ron Marryott ’57 was a great friend and mentor. His leadership and dedication positioned this organization well for the successes we are realizing today. Captain Slade Cutter ’35 was a legendary World War II submarine hero and was credited with sinking 23 Japanese ships during that time. He later returned to the Academy as the athletic director and played an integral role in the construction of Navy-Marine Corps Memorial Stadium. Vice Admiral Jim Stockdale ’47 was a Medal of Honor recipient, a Viet Nam prisoner of war (POW), naval aviator and test pilot, academic, and American hero.
Jim Stockdale was recognized with the Alumni Association’s Distinguished Graduate Award in 2001. In 2004, Ron was recognized as a DGA – a program he was instrumental in establishing – and Slade was honored this past April. I am appreciative of the wisdom of the volunteers who serve on the Distinguished Graduate Award selection committee and for giving us the opportunity to honor these great individuals at the Naval Academy while they were still with us. How fitting that all three chose the Naval Academy as their final resting place.
And now it is my pleasure to report some exciting results and progress. This latest edition of Leadership Update will provide you with a brief snapshot of what’s been keeping us busy since my semi-annual report of last spring (http://usna.com/About/BOT/2005/May/PresidentsReport.htm). Specifically, you will receive an update on:
Treasury
We are currently closing the books on fiscal year 2005 (1 July 04 – 30 June 05). Over the next few weeks the Treasury team will be making the final entries before presenting our financial statements to our new auditors – McGladrey & Pullen, LLP. The auditors will be on board in September and they will make their report to the Joint Finance and Audit Committee and the respective Boards in November and December. Until then, all the financial facts and figures presented here and in all other communications and documents should be considered estimates and subject to change. In other words, although not precisely accurate, they are certainly directionally correct.
In fiscal year 2005, through the combined efforts of the senior leadership team, our staff and volunteer guidance and oversight, the Alumni Association and Foundation’s financial performance and condition continues to be strong. As a result, the consolidated assets of our two organizations will be about $166 million at year end and our net assets will have increased from $124 million to $128 million in fiscal year 2005. Total revenue will exceed $28 million and our most important mission metric – support to the Naval Academy – will be about $17.5 million, including more than $1.1 million in unrestricted support.
For the fifth consecutive fiscal year, we will show a modest operating budget surplus – in fact, this year it may exceed $300K. This can be attributed to operating expenses, including salaries and benefits, coming in under approved targets while on the revenue side, we exceeded our targets in unrestricted contributions, investment income and revenue from all programs (SACC, travel programs and Ogle Hall events). These budget surpluses, while modest, are important indicators of sound management practice and controls, organizational resiliency and our increased financial prowess. They boost our unrestricted net asset base (reserves) and may be called on to help us weather future financial and economic downturns that are inevitable in the not-for-profit business. Surpluses and additions to the reserves are always welcome, but never guaranteed. And although we are most pleased with this year’s results and our five-year track record, we all must remain mindful of the uncertainties that lie ahead as we transition from a campaign-oriented operating model to one of sustaining philanthropic efforts into the future. In my view, we are well positioned to do so.
As we stated at the May board meetings, the Joint Investment Committee has embarked on an evaluation and search for an investment firm to act as our chief investment officer. A sub-committee, chaired by Bill Moore ’61 and comprised of Tom Brasco ’75 and Peter Grieve ’77, is working through the process to do the due diligence required to present candidate firms to the full committee in November. This sub-committee is being assisted by Alumni Association and Foundation staff members Hank Sanford SBU ’73, chief financial officer; Mike Mundt ’83, director of investments; and Bob Roberts ’94, staff accountant.
We have sent out more than 45 requests of qualification to firms that have either been referred to us by Alumni and friends or are known by the professionals on our committees as leaders in the management of institutional funds. Over the summer and fall, the sub-committee and staff will evaluate the initial qualification statements, follow up with a detailed request for proposal to a selected group of firms and present a slate of qualified finalists to the full committee in November for selection.
The process put together by Bill Moore and his committee is a good one. This open process includes deep due diligence to ensure we get the very best firm to invest and manage our core portfolio of nearly $100 million.
Fundraising & Campaign Update
The original $175 million goal for the Leaders to Serve the Nation Campaign is now a milestone long since achieved. With less than six months remaining in the Campaign, we have raised more than $221 million toward the revised goal of $225 million. In calendar year 2004 alone, nearly 16,000 Alumni, parents, friends, corporations and organizations contributed almost $30 million in gift receipts to benefit the Naval Academy, the Brigade of Midshipmen and the Alumni Association and Foundation.
As mentioned previously, we slightly over-achieved in FY05 in unrestricted gift receipts. We took in $7.2 million against our target of $6.8 million. Total contributions in FY05 were $ 21.6 million compared to $ 41.1 million in FY04. As a reminder, the previous fiscal year included a one time extraordinary gift of $10 million from one alumnus.
Recent gifts and commitments include:
On the subject of the Navy-Marine Corps Memorial Stadium, we will re-dedicate the memorial during the Navy-Air Force football game on Saturday, 8 October. Total commitments made to this project now slightly exceed $41 million (more than $11 million of that is in outstanding pledges). If every individual completes his or her pledge commitment on time and if every class involved in the stadium reaches its respective public goal, then we will finish the construction and we will pay off our debt. This has been a remarkable effort so far, and is demonstrative of what happens when we form effective partnerships and realize the full potential of synergy.
As the end of the Campaign draws near, it is important that all of us work together to help all of our supporters (alumni, parents, friends) understand the enormity of ensuring that strong private gift support continues into the post-Campaign era. We must continue to engage and educate everyone on the import and impact of making a gift, whether to the Annual Fund or a restricted project (and, preferably both!), each and every year. It is private gift support that provides the margin of excellence in meeting select, strategic priorities at the Naval Academy. For the members of the Naval Academy Foundation Board of Directors, we will continue our strategic, post-campaign planning work and report further progress at the 14 October meeting.
Alumni Services and Operations
As we work with a sub-set of the Board of Trustees to review “Plan 2010” later this summer, we remain focused on all of our growth objectives, especially growing our membership ranks and growing in our value-added services to our members. Our ultimate objective is to, “grow and nurture the Extended Brigade,” and thereby create a large cadre of informed advocates for the Naval Academy.
Membership Upon the graduation of the Class of 2005, and as the Brigade reforms in August, current membership is approximately 49,686. We expect to be well over 50,000 members when the Class of 2007 is activated this fall. This number is made up of more than 45,000 life members; 2,400 associate members (parents, corporations, friends); and 989 provisional life members (Class of 2006). It does not include the growing ranks of joint members (spouses). Dan Lear, chairman of the standing membership committee, and our membership department are working on an executable plan to reach our interim goal of 60,000 members. We believe we have a target- rich environment, as there are still more than 9,800 of our 51,700 living graduates who have either never been members or have allowed their membership to lapse.
As a point of interest, all but 5 of the 1220 incoming plebes in ’09 signed up as Life Members on Induction Day, and more than half of their parents are enrolled in a four year membership plan. All major reunion classes (1940-1975) and many additional classes have signed on to run serious membership campaigns in support of our other goal of a minimum of 75% membership in all classes. Using email, direct mail and letters written and signed by class presidents, this “shipmate to shipmate” approach has helped us get more than 260 new Life Members since the start of 2005.
Corporate membership continues its strong growth, with 37 companies now involved. Our corporate members are involved in many events and activities; choosing to sponsor events during commissioning week and I-Day, which provides them a unique opportunity while also contributing to our bottom line.
Career Programs The Alumni Association continues to offer top-notch career transition programs and services for all Naval Academy Alumni.
The Service Academy Career Conferences (SACC) continue to grow, particularly the Washington, D.C., SACC. This year, more than 100 recruiting companies and 600 candidates attended the D.C. event – a 100% increase since 1999, with upwards of 50 job offers tendered at the conference itself. In order to accommodate these growing numbers, D.C. SACC in 2006 will be held at the Marriott Crystal Gateway Hotel.
The online Joint Service Academy Jobs Electronically (JSAJE) has evolved and the number and variety of jobs posted, as well as the number of Alumni using the service, continues to increase. The Joint Service Alumni Resume Database System (JSARDS) is in beta testing and is expected to be launched in the near future.
Welcome Aboard 2009! More than 12,400 applicants competed for 1,220 Naval Academy appointments to the Class of 2009. I had the opportunity to meet some of the members of the class, and many of their parents, and to congratulate and thank them for their commitment to service. 69 members of the class (5.6%) are sons and daughters of Naval Academy Alumni. Additionally, the Athletic and Scholarship Programs division and Trustees of the Foundation sponsored a total of 84 outstanding candidates to prep schools across the country:
As we learn more about the Class of 2009, we will update you in an upcoming issue of Shipmate and on www.usna.com.
What’s Next I have already mentioned on-going efforts in “over the horizon” planning underway with the Foundation Board of Directors. Additionally, we intend to convene a special, ad-hoc team in late summer/early fall to do a comprehensive review of Plan 2010 and its relevance to the strategic direction of the Alumni Association. A select group of the Foundation Trustees is wrapping up a thorough, nearly one year strategic review for the Athletic - Scholarship Programs division of the Foundation. Perhaps most important, the Superintendent is hosting several all-day sessions throughout the summer with his leadership team, including three of us, in updating the Naval Academy Strategic Plan. Finally, Chief Operating Officer Terry Murray assures that we don’t lose sight of what we need to do on a daily, weekly, monthly and quarterly basis here through the Annual Operating Plan for FY 06. This is a long way of saying that no one – staff, volunteer leadership, or the key executive team – is resting on the laurels of past success. As a former Superintendent was fond of saying, “Excellence is a moving target.” So, we continue to evaluate all aspects of the organization, and its relevance to all of our constituents, in assuring that we continue to seek excellence in all we do.
An important piece of our strategy is our enterprise communications capability. And, Leadership Update is just one means of providing to you, our volunteer leadership, necessary and meaningful specific information. I would appreciate your feedback on the effectiveness of Leadership Update as well as your thoughts on topics that would be of interest to you.
We have much to look forward to in the coming months – football season, reunions and the successful conclusion of the most comprehensive and ambitious fund-raising campaign in Naval Academy history. I look forward to seeing you in Annapolis soon. And, as always, feel free to drop me a line with any questions or concerns you may have. I always appreciate your valued input, but I especially appreciate your dedicated leadership and commitment to our cause. Thank you again for your continued support.
Go Navy!
George
George P. Watt, Jr. ’73 President and Chief Executive Officer” |
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*** Central Region: |