Oshry talks and notes that PK was invited to test feasability of $15 million capital and endowment campaign for high school and creation of endowment.
Conducted:
27 confidential interviews
16 parents or alumnni
9 current or former board members
11 suggested by someone else in study
1 recommended to make lead gift in campaign
70% had positive view of district
School board does not make decisions that are always popular
78% rate project as high or reasonably high
67% think capital and endowment plan is the right plan
74% think campaign is best way to raise money
5 people think it is not and should share cost via tax
81% advocated proceeding with campaign
Caution about proceeding because there was confusion of where funds would go- pay down debt or endowment
Some people only interested in capital
Some only interested in endowment
Possibility of $15 million
67% felt 15 million attainable
People did not have answer to "who" would come up with the money.
Higher degree of confidence by those who have done major gift giving before
Did not uncover first hand evidence of top ten gifts they were looking for
1/3 felt they could find $3 million gift
When asked for who six of the 30 named $50,000 was largest gift identified
Some did not indicate if they would give money...needed more info
24 of 30 were not interviewed
37 people suggested named people with 11 people suggested multiple time
interviewed 12 of the 37. 9 of 12 indicated they would take a leadership role in fundraising
85% said they would serve in some capacity.
89% said they would be willing to give something
These were good results
Board is untested in its ability to lead a campaign
Recommendations:
1st is to proceed with campaign with $6 million capital and endowment as goal.
Campaign would move community to be positively influence (cultural change)
Address structure to do campaign-small task force to define scope of responsiblity...mlfe/mt lebanon endowment
School district must define its scope of campaign
Enlist steering committee- focus on campaign chair, participating in expanded case for support, prospect cultivation, etc
Update expand existing policies with regards to endowment
Plan and implement a targeted awareness program.
Form a planned giving program (Estate planning with school district in mind)
Staffing and budget for the campaign...currently no staff and no budget for campaign
March 2015 finished with implementation and possibly finished with first fundraising efforts...long after second bond
Questions from Board:
Dale thanks Oshry and says he appreciates the blueprint given to the Board. Asks if the 27 interviews were statistically significant. Oshry says that it is. They are NOT looking for a sample of the community but instead for a sample that represents the right portion of the community. Asks about how arrived at $6 million while recognizing only one gift of any substance. Oshry says two ways, looking at what was heard or not heard when people had the $15 number in front of them. Good to hear about support in community. Need to establish a culture of philantropy in Mt. Lebanon and the culure would grow. Has Oshry seen that culutre grow in other of his jobs...Oshry says National Rehabilitation Hosptial in DC was case study given to say that it can be done. Started at $3 million, then moved to $5 million, then more.
Need to do major gift first to get the smaller gifts later...not the other way around.
Cappucci- Concern with spending money on staffing before money comes in. Do you have a record of how successful you have been...how close have you come to the amount that is expected to be raised. Oshry says campaigns reach or exceed the goal with 87% of the cases. The ones that fail, fail badly. Often the engagement is either redefined or scoped changed. Budget proposed is 14% budget. Within industry standards. With relatively modest goal with no experience the 14% is at the high/safe range of what should be expected. Cappucci says money would not come in for several years. Years 2 and 3 would expect major committments. But other gifts wouldnt be until 2019 and 2020. When we set up to do report it was to offset the bonds. Now that he says this can no longer be the goal, should we shift the focus/campaign. He says no.
Kubit-Thanks for the report. Were there indications on what donors were doing for the endowment...arts, sports, etc? A lot of people said arts and athletics, their favorite program saved by the endowment.
Remely- Likes the report. Doesn't see anything for the small donation for the small family that wants to buy a brick. Establish a endowment is important. It may be the endowment or lack of endowment but monies to capital campaign will be more important to the campaign because it saves interest. Asks Oshry if he will meet the goal and come in on budget. Oshry says yes. Can't pay down bond. Not a lot of options if money is not raised for second bond for high school.
Posti- Asks about the DC Hospital. Asks if naming rights came up at all. It was not a major focus of this study.
Dan asks question about money not coming in for 6 or 7 years....if in first year and a half they have to pay him the $800,000 how does that happen. Consultants are not paid on how much is raised, they are paid on time...in 30 months will you have paid for yourself. Will the district be upside down on this? Yes, we will be in the negative. Good, insightful question by Dan and the answer is worrisome. Dan's question at the end about whether the district will need to pay money and be out of pocket while all this fundraising goes on is a good one. Basically the district will need to find the almost $900,000 to pay PK to do the fundraising and that has to be budgeted for....and I don't believe that includes a school staff person to direct fundraising.
That was very nice of someone to contribute a written summary ! Please convey thanks and appreciation.
ReplyDeleteI thought the original feasability basis was to be $30 million - when, how and why was the figure reduced to $15 million ?
Bill Lewis
I unfortunately can't open the report for some reason. I am interested in how PK would be paid?
ReplyDeleteIs their fee on a contingeny basis (% of dollars actually collected), a one time fee basis, etc. Are there additional incenives if the meet and exceed the goal?
Their fee is not contingent on anything. We will owe them close to $900,000 based on their estimated time and materials (travel and such) after the first 18 months (at least that is what I recall).
ReplyDeleteThey made is clear that they ARE NOT paid on a percentage collected.
1:05, which report can you not open?
ReplyDeleteElaine
1:27, you are correct.
ReplyDeleteEven though P/K did say it's 14%, the percentage is based on the amount of giving expected.
Obviously, if the giving is less, the percentage is higher; if the giving is more the percentage is lower.
If you recall during P/K's original presentation to the board, Mr. Oshry said the fundraising fees would be between 5% and 7%.
His original estimate doubled the the high figure because the estimated gifting went from $30MM and $15MM down to $6MM.
2:15...
ReplyDeleteI call that Jan Klein math.
It happens when you expect project reimbursement to be 15% but then it gets halved with an explanation that has to do with student enrollment projections...which has nothing to do with reimbursement...
I thought this type of math had been patented by MTLSD. Sorry to see it has spread to Texas.
At least here we have a good explanation...you raise half of what you asked for, our fee is fixed...so your costs are double the original percentage.
If the numbers have now dropped, it leaves the door open to potentially change the fee structure. Nothing wrong with asking them to sharpen their pencil. It's called negotiation.
ReplyDeleteHow much do they want the job....
You're right on the money, 2:33 PM !
ReplyDeleteIt'll be interesting to see if this takes off or not. $800,000 or $900,000 budget for the next 18 months will not be easy for this board to find...especially when they need to fit the second round of bonds neatly in there.
ReplyDeleteI don't want anyone to take my comment as gloating. I hope nobody here feels like gloating. It would have been great if they found that one or two people that could have funded the whole second bond.
Yes, it would have let the board and their bad decisions off the hook, but it would have tremendously benefited the taxpayer.
Now the board has to decide if they want to take the 13% risk of "failing badly" as PK said in the meeting. By failing badly that would mean paying out the $800,000 fees to PK, hiring staff for the campaign, and then not raising more than $50-100k. While only a 13% risk, it is not a usual occurrence to risk taxpayer money on a bet like this. It's like standing on 19 in blackjack when the dealer has a 7 showing. Decent shot to win, but when the dealer throws over that 4, boy do you throw up a little in your mouth!
If I was on the board, I honestly don't know which way I would vote on this.
Don't forget that $900,000 grievance. We should be hearing something about that soon. I am not gloating. I wish the Board showed a little more respect to the community. We wouldn't be in the mess that we are in.
ReplyDeleteElaine
Oh my dear, fundraising schmumraising! I say we just write a sit-com called “Lost in Lebo”. There’s plenty of material just listening to the podcasts and rebroadcasts starring (most of) our elected officials! I can see it now, an episode on the feckless construction project that nobody wanted followed by a fistfight over deer culling. The sponsors will just go crazy – it doesn’t get much better then this. Or how about a reality TV show?? We could pay for the Taj Mahal and Municipal bonds 10 times over! Franklin could even get his turf!
ReplyDeleteWe have all learned that it costs as much to conduct a smaller campaign that it does to conduct a larger campaign. Is that really a surprise considering we have never organized a campaign like this before?
ReplyDeleteBefore you make up your mind what the answer really is please ask yourself, is the District really better off with $6,000,000 of freely donated gifts, less expenses, than it is with no donations?
Seriously, Josie - you need to call him !
ReplyDeleteTo answer Ewing's question, yes. We would be better off putting aside this stupid idea. And it's not just 6 million less expenses. For about the third time--this whole idea was concocted to prevent the SB from borrowing even more money. Yet according to PK, nobody's really biting. Big shock. Investors don't intentionally back loser ideas. You think some wealthy person wants their name associated with the high school project? Haha, hell the Sb could have given me two free movie passes or a restaurant gift card and I could have given them the same answer as PK. Does it always have to be amateur hour?
ReplyDeleteThis whole thing is a waste of time and does NOT accomplish the stated goal. All the cheerleaders for this obviously have zero financial sense.
John, is $6,000,000 guaranteed? If so, why do we need PK to collect it? I seem to remember being told that the study would give us the tools to be able to do fundraising, regardless of the color of the traffic light, but I guess I have that wrong.
ReplyDeleteElaine
Elaine,
ReplyDeleteThe Study was to determine the amount of money we could successfully raise. That amount was determined to be $6,000,000. The campaign now needs to be planned and the final details put in place before Lead Donors are solicited for pledges.
Mr. Oshry evenly split the amounts between Capital Contributions and Endowment for 1) the purpose of his Report and 2) because he found interest among Donors in both components. Now the Board needs to fine tune the final Campaign Plans in order to properly solicit donations.
Remember, 74% of the Donors interviewed think a campaign is the best way to raise money and 67% think a Capital and Endowment campaign is the right plan.
Our 40th high school reunion is in a few weeks. The committee has been working very hard planning a wonderful weekend. One of the activities still up in the air is a tour of the high school. I gave the committee a heads up as to what transpired last night and to expect to be asked for a donation. I have to share a comment:
ReplyDelete"I don't mind if they ask for a donation.
I will just tell them that I have already donated my time, my blood,
my youth and my innocence to that place, not to mention a portion of
my hearing and much of my sanity from all the construction that took
place during the three years that we were there."
I don't think there will be much support from the class of '72. We're still pretty cranky to have gone through all that mess only to know that the building is being torn down. We're the only class to have been there from start to finish.
Elaine
I added a new poll. Please take a second and vote.
ReplyDeleteElaine
It looks like John Ewing already voted.
ReplyDeleteEwing, you're wrong. Plain and simple. The study was NOT to determine how much could be raised. The study was a feasability study on whether or not a capital campaign could raise 30...er, 15 million dollars. The consultant, obviously wanting to retain a contract worth almost a million bucks, came back with "uh, yeah, so the affluent people we interviewed won't do 15 million. But we're pretty sure we could do, like, um, 6...or something". That's is NOT what the study was supposed to yield.
ReplyDeleteWhat's your deal with trying to spin this? Are you getting a cut?
I don't blame John here for being positive. It not a terrible thing to have someone tell you that they think you could raise $6 million in private money that would then not come out of residents' pockets in the form of future taxes.
ReplyDeleteWas the initial target missed? Absolutely. But having an endowment, no matter how big, is better than not. It is a new model to help fund public education and has been successfully deployed in other public school districts in Pennsylvania.
Oh, lord help me. You missed the point. The study was not supposed to be a fishing expedition. It was supposed to answer whether or not 30 or 15 million could be raised.
ReplyDeleteSecond, if the SB is now open to private money funding a public school, sounds like a charter school is coming. Good. Now let's see Posti and company lay off a quarter of the teachers so we can support a private institution. Good job, school board. You've finally landed on something the community might actually support.