Presentation on theme: "A Foundation for the Kingdom A New Beginning CHI PHI FRATERNITY ALPHA DELTA Chapter PENNSYLVANIA STATE UNIVERSITY A New Beginning."— Presentation transcript:
A Foundation for the Kingdom A New Beginning CHI PHI FRATERNITY ALPHA DELTA Chapter PENNSYLVANIA STATE UNIVERSITY A New Beginning
Memories The Current Situation Survey and Findings The New Vision The Plan Call to Action Overview
Memories CHI PHI-- What are your memories?... I believe in the future of Chi Phi Fraternity. Brotherhood? Good Times? Learning? Leadership? Lifetime Friendships? All of the Above?
The Memories How do we ensure that future young men have the same opportunities?
There has been a paradigm shift on campus –Students have more options than ever for off-campus living and extracurricular activities –Students have many other ways to communicate; texting, IMs, email, FaceBook, etc. –Its the Me generation. Brotherhood does not readily resonate with many young men –Students expectations today, right or wrong, are different than ours. –There are more poorly managed fraternities than ever before, however PSU President, Dr. Spanier has made a commitment to rejuvenate Greek life because…… The Current Situation A Mans word is his bond.
……Fraternities still offer a unique and maturing experience to learn leadership and create life-long friendships! The Current Situation... I believe in the future of Chi Phi Fraternity.
The condition of our house has significantly deteriorated over the last 25 years.* –Alumni have not spent the money required to adequately maintain the house nor keep up with technology, security and safety standards –Actives have not treated the house with the respect it deserves….and demands –The poor condition of the house has ultimately bred some sub-par brothers which is adversely impacting recruitment These problems have been compounding for many years. Recent events are simply a manifestation of deep rooted problems. * Details of house requirements shown at the end of this presentation The Current Situation
Our Competition is moving ahead: –Dorms and dorm dining are better than ever –New apartments have all the latest amenities –Beta Theta Pi – Raised over $6,000,000; one donors individual gift exceeded $3,200,000 –Sigma Chi – Raised over $2,000,000* –Phi Sigma Kappa – Raised over $950,000* * To date The Current Situation... The hand of Brotherhood is always extended.
Truth, Honesty, and Personal Integrity are the foundations… The Current Situation CHI PHI at PSU is now at a crossroads. –House is in bad physical shape –Financials are weak –Too few actives –Quality of many of the actives is marginal –Alumni Participation--historically weak –New sprinkler ordinance required the house to be shut down if not brought into compliance by September 2008 –We have decided to shut the house down and are exploring our options Key Positive –Alumni Involvement is now at an all-time high. Presently, there are 25+ alumni members actively involved in the leadership to renovate and rebuild our fraternity
The bottom line is that we cannot attract the quality of brother we want with the present shape of our house. So what are our options? –Shut the House Down and Sell the Property This would end an 84-year heritage for over 950 alums and deprive future PSU men from continuing the Alpha Delta tradition A Mans word is his bond. The Current Situation
... I believe in the future of Chi Phi Fraternity. So what are our options? –Do a Little Raise $300,000-$600,000- enough money to install a sprinkler system, and one or two other major infrastructure renovations Allow us to limp along--possibly survive, not thrive Require us to develop another fund raising campaign 5-7 years from now to sustain our weak position in the market –Do it the Right Way! Define a new strategy for CHI-PHI Raise the money for a complete renovation Create an ongoing maintenance fund Re-colonize while enacting new rules for protecting our investment
Background: 49 Chi Phi alumni surveyed regarding best options regarding future Range in Graduation years: 1937 to 1999, Mean & Median Graduation Year = 1974 Finding Summary: * 77% believed best option was to renovate the existing chapter house with emphasis on substantial interior/exterior renovations, safety issues (such as meeting code) & aesthetics * 21% believed the best option was to establish a maintenance endowment fund to guarantee the preservation of the chapter/house in the future * 2% believed we should raze the current chapter house and build a new one at our current location * 0% believed buying a chapter house at a new location was the best option Survey & Findings
Truth, Honesty, and Personal Integrity are the foundations… The New Vision A Stronger Alumni Organization –More volunteers, less work per volunteer A Solid and Sustainable Financial Plan Raise the capital required for all major improvements and ongoing maintenance A Brand New, Stronger Chapter –Built from a small nucleus of existing actives Protect our Investment –Live-in House Parent and on-going maintenance plan
A Strong & Effective Alumni Organization –Develop & implement more effective house/alumni association –Spread workload, task specific positions & term limits –Improve active/alumni relations as alumni will do their part –Outsource certain functions –House parent Implement & maintain quarterly association meetings –Post agendas & track performance on web site Increase alumni engagement & pride in Chi Phi –Alpha Delta Data, improve web site & annual outings The Plan... I believe in the future of Chi Phi Fraternity.
The Plan We will NOT move ahead with the rebuild of the house, until every box below is filled in!
A Solid and Sustainable Financial Plan -Enabling fire code compliance mandated by the borough -Allowing for refurbishment to bring Chi Phi on par with neighboring fraternities with prudent leverage -Providing a self-sustaining maintenance fund to assure long-term maintenance and upkeep The Plan Truth, Honesty, and Personal Integrity are the foundations…
Raise the capital required for all major improvements and ongoing maintenance -$2,250,000 is needed -Work prioritized to minimize cost duplication -Cash-out refinance proceeds coupled with alumni donations over 3 years enable house to be fully renovated with prudent debt burden -Fund of ~$500,000 established to initially service debt during new brotherhood ramp-up and provide for on-going maintenance and repairs The Plan... The hand of Brotherhood is always extended.
The 3-Year Financial Plan Cash out Refinance Proceeds coupled with $2.25M in Alumni donations Gut & Renovation Plan –Shut House Summer 2008 –Reoccupy newly renovated home in Fall 2010 (Sooner if funds allow) –Ramp to full occupancy by 2011 (can support cash flows at 20 actives minimum) Priority 1 - $950K - Major systems to address while walls are open for sprinkler installation - Includes safety & security items and cosmetic repairs Priority 2 - $250K - Floors, roof repairs, re-pointing, club room refurbishment Priority 3 - $500K -Bathrooms in basement -Open up tube room -Commercial grade tile -Window replacement & associated cosmetic repairs -Woodwork refurbishment -Skim coat & paint Priority 4 – $550K - Common Computers in Library - Library upgrades - Computer Server - Maintenance Fund The Plan... The hand of Brotherhood is always extended.
Giving Pyramid Targeted Need for Pledges Payable Over 3-year Period LevelPledge Amount# of Pledges The Order of the Chakett Society $500,000+ 1 The Scarlet & Blue Society $250,000 2 The Distinguished Alumni Society $100,000 3 The Leadership Society $50,000 2 The Kingdom Society $25,00010 The Alpha Delta Society $10,00020 Order of the Alumni Society $5,00030 Order of the Brotherhood $3,00060 Chi Phi Supporter $1,00070 Total Pledged - $2,250,000Total Pledges – 198 (20% Participation) The Financials A Mans word is his bond.
A Brand New, Stronger Chapter –Rebuild the Active Brotherhood and Culture Renovation timeline helps assure exit of existing members Evaluate remaining underclassmen, if applicable, and perform membership reapplication –Over 50% of current members do not meet minimum expectations –Reapplication process in Fall 2009 –Rebuild membership from core group who meet or surpass expectations Develop best practice rush (new member recruitment) program –Partner with Chi Phi National & PSU Greek Life Office –Minimum requirements to qualify as Rush Chairman –Recruiting events will be dry/semi dry –Alumni Recruiting & New Member Program Chairs engagement The Plan... The hand of Brotherhood is always extended.
Rebuild the Active Brotherhood and Culture –Raise standards & expectations of the actives and the chapter Obtain Universitys Standard of Excellence designation for fraternal organizations Continue with Brotherhood Board Increase philanthropy and campus leadership Maintain house GPA above 3.0 Clearly defined goals & expectations and consistent accountability –Implement effective & reasonable control of actives House parent Weekly inspections for damage & cleaning Open house parties and combines banned permanently All other social functions restricted to lower level Enforce house-wide smoking ban Brothers will have daily duties even with a new pledge class The Plan... I believe in the future of Chi Phi Fraternity.
Protect our Investment -Live-in house parent provides guardian oversight and implements Housing Association and University requirements and guidelines in exchange for Room & Board. -Self-sustaining maintenance fund provides for long term care of house while minimizing alumni fatigue resulting from ongoing requests for donations to support band-aid approaches. The Plan Truth, Honesty, and Personal Integrity are the foundations…
…I believe in the future of the Chi Phi Fraternity. When I put forth my best effort and combine that with the strength of my Brothers, we can achieve victory. Call to Action... The hand of Brotherhood is always extended.
Never in the long life of (Alpha Delta) Chi Phi has the chapter been so close to being shut down permanently. We are that point….right now! We are all from different eras and have our own unique memories of our times at 360 E. Hamilton…..but we share one common bond…….. ……..we are Chi Phi brothers The easy way out is to do nothing…..live with the memories and the friends we made We dont believe this is what most alumni want, rather, we believe they want to assure the future of Chi Phi at PSU And we believe we CAN accomplish this if we pull together NOW ! Call to Action A Mans word is his bond.
SUMMARY The plan as developed by an active and dedicated group of alumni during the last 18 months is: –Raise $2,250,000 –Fill in Alumni Organization Chart –Temporarily shut the house down for renovations –Re-colonize –Protect our investment with a live-in house parent –Enact new rules for the actives These are radical steps----but they are needed Other PSU fraternities have successfully taken these steps to sustain their future…..there is no reason we cant succeed too ! Call to Action Truth, Honesty, and Personal Integrity are the foundations…
How will we accomplish this ? Through YOUR financial and volunteer support All of us are at different stages of our lives and have different financial situations. Many of us are in a position to donate $1,000 to $10,000 over 3 years Some of us could donate $25,000 to $75,000 And a few of our brothers could fund a substantial part of this renovation on their own with a million dollar donation Many of us could donate some time by volunteering as a member of the Alpha Delta Chapter Housing Association The bottom line is everyone can give something. We need YOUR support to reach our goal. Call to Action... I believe in the future of Chi Phi Fraternity.
How will this work ? First year donations will be kept in a special account and will be returned (at your request) if we do not reach $2,250,000 in pledges and/or alumni organization chart is not completed Because of this, and the goal to open the newly renovated house by fall 2010, we need to receive everyones commitment as soon as possible! Once the pledge goal is met, we will proceed with executing the plan If we do not reach our goal, then most likely the house will be sold……...and the Alpha Delta Chapter of Chi Phi will reach the end of an era. Call to Action... The hand of Brotherhood is always extended.
Giving Pyramid Targeted Need for Pledges Payable Over 3-year Period LevelPledge Amount# of Pledges The Order of the Chakett Society $500,000 1 The Scarlet & Blue Society $250,000 2 The Distinguished Alumni Society $100,000 3 The Leadership Society $50,000 2 The Kingdom Society $25,00010 The Alpha Delta Society $10,00020 Order of the Alumni Society $5,00030 Order of the Brotherhood $3,00060 Chi Phi Supporter $1,00070 Total Pledged - $2,250,000Total Pledges – 198 (20% Participation) The Financials A Mans word is his bond.
Alpha Delta Chapter House Naming Opportunities –House $500,000 + (1) –Large Clubroom $250,000 + (1) –Small Clubroom $250,000 + (1) –Library $100,000 + (1) –Bar/Party Room $100,000 + (1) –Veranda $100,000 + (1) –Chapter Room $ 50,000 + (1) –House Father Living Suite $ 50,000 + (1) –Individual Rooms $ 25,000+ (10) –Custom Bricks for Fire Place/Walkway Large $10,000+ (20) Medium $5,000+ (30) Small $3,000+ (60) –Campaign Plaque$1,000 & other donors + (70) Call to Action Truth, Honesty, and Personal Integrity are the foundations…
Some current Chi Phi Alumni already Invested are……. Call to Action... I believe in the future of Chi Phi Fraternity. John Pursley1941 James Jones1952 Richard McCartney1952 Richard Headlee1955 Alan Larson1960 Andrew Schultz1960 C. Henry Barner1961 Duane Junker1963 Richard Krouse1963 Richard Flynn1967 Thomas Thomas Jr.1967 Frank Cook Jr.1972 Arthur Hoecker Jr.1972 David Brockway1977 William Marsh Jr.1977 Ed Spangler1977 Robert DiBella1977 John Meyer1978 Daniel Vogel1984 Martin Shoup1985 Gordon Brown1987 Robert Martin1987 D. Scott Hallman1987 Mr. Douglas Muhl1987 Gary Bradford1988 James Curcio1988 Mr. Walter Kuhns1988 Jon Hopkins1989 Paul Cinquegrane1990 Thomas Kennington1990 Rich Konzmann1990 Michael Antonietti1990 Jeffrey Swartz1990 Eric Cerniglia1991 Jeffrey Mercando1992 Mr. Eric Oberfield1992 Jonathan Knipe1993 Vance Moss1994 Vince Moss1994 Chad Levant1995 Spencer Matusky2002 Matthew Kriebel2004 Ryan Buff2005 Brandon Paull2006 Eric Balboni2006 Adam Hiner2007 Nick Kurjiaka2007 Matthew Schulman2007 Jacob Chernansky2008 Justin Olsen2008 Joseph Franck2008 Jon Krause2008 Bryan Gleaves2009 Taner Gokce2009 Jolin Heins2009 Kevin Rosenbaum2009 Matt Gannon2009 Timothy Wikert2009 Zachary DeWalt2009 Jeff Paules2010 Sean Causgrove2010
Join Your Brothers… Help us preserve the memories and lay a new Foundation for the Kingdom We Need Your Help!
Addendum The following slides outline some of the house requirements in more detail
First Priorities: –Sprinkler System –Steam Heat Feeds/Returns –Overflow Plumbing for Bathrooms –Upgraded Electrical –Ceiling and Wall Repairs –Replacing Wood Doors with Metal –Upgrade bathroom fixtures –Commercial Grade Carpeting The Kingdoms Needs
Second Priorities: –Replace/Refinish Hard Wood Floors –Refinish Circular Stairway –Repair Slate Roofing –Repointing –Replace French Doors – Club Room/Basement –Replace Club Room Fixtures –Replace Club Room Furniture, Carpets & Curtains The Kingdoms Needs
Third Priorities: –Skim Coat & Paint All Hallways –Refinish Baseboard & Landing Woodwork –Replace Hallway Lighting –Commercial Grade Tile Hallways –Interior Repointing & Foundation Repairs –Addition of Mens Bathroom –Window Replacements The Kingdoms Needs
Fourth Priorities: –Library Upgrades –Maintenance Endowment Fund The Kingdoms Needs
Truth, Honesty, and Personal Integrity are the foundations… Chi Phi Business Plan Form a Pennsylvania limited liability company Chi Phi Residential, LLC (CPR, LLC) to own, operate and maintain the income asset Offer Member ownership interests only to Alpha Delta Alumni CPR operations shall be governed by the Member-approved LLC Operating Agreement Member ownership tax treatment to be governed according to the Pennsylvania Limited Liability Company Act (19__) Members percentage ownership is in direct proportion to their equity investment Members exposure to liability is limited to each Members percentage ownership interest in the LLC LLC may be managed by either an Owner-Member known as Managing Member or by a non-owner known as Manager The Managing Member may consist of more than one Member
The Officers of the LLC may be composed of the existing individuals on the ADCHA organizational chart in their same roles The LLC officers and various committees shall develop and implement task specific positions and assignments The Managing Member shall out-source certain regular maintenance functions (gardening) and preventative maintenance programs, such HVAC Conduct job search to employ a House Parent to oversee on-site management (comparable to an on-site Resident Manager in the multi-family environment) Regular LLC Member meetings held on-site, and/or by video/tele- conferencing Managing Member shall provide quarterly Financial & Operating Statements (via ADCHA website) Chi Phi Business Plan... I believe in the future of Chi Phi Fraternity.
Capitalize house re-build -Raise estimated $2,250,000 house rebuild budget -Refinance any existing debt after completion of construction -Establish trust fund for start-up expenses (including debt service as may be applicable) Create self-perpetuating trust fund for ongoing Operations & Maintenance (O & M) -Establish income generating trust fund for O&M Chi Phi Business Plan Truth, Honesty, and Personal Integrity are the foundations…
Advantages of Limited Liability Companies (LLCs) as real estate investment vehicles LLCs are generally treated as partnerships for federal income tax purposes LLC Members exposure to risk is generally limited to actual investment in the LLC (compared to partnerships in which partner liability may be unlimited) Pass-through taxation avoids double tax on profits (compared to corporations where income is taxed at entity level – corporate net income tax – and also taxed at individual level upon distribution to shareholders) Chi Phi Business Plan... The hand of Brotherhood is always extended.
Chi Phi Business Plan... The hand of Brotherhood is always extended. Advantages of LLC contd Flexibility of Partnership without S-Corp restrictions LLC Members receive Member Shares (no stock or classes of shares) No limit to number of Members A Member may consist of individuals, corporations, partnerships, LLCs, or any legal entity (domestic or foreign) LLC liquidation is generally treated as a partnership (no tax effect) LLC Formation and annual upkeep are simple and inexpensive and may be performed by Managing Member Meetings may be by conference call and by quorum LLC causes preparation of annual K-1s for each Member
Disadvantages of LLCs Members who are compensated must be paid by guaranteed payments which are subject to self employment tax Pennsylvania law controls Pennsylvania LLCs without consideration to other States LLC laws Pennsylvania LLCs are subject to capital stock tax and must file a PA Corporate Tax Report (RCT-101) (compared to partnerships not so covered) For LLCs treated as partnerships under federal tax law, if 50% or more of the capital and profit interests are sold or exchanged within a 12-month period the LLC terminates under federal tax law Chi Phi Business Plan Truth, Honesty, and Personal Integrity are the foundations…
Tax Filing Requirements LLCs may be Single-Member or Multi-Member Multi-Member LLCs may choose tax treatment as partnership or corporation for federal income tax purposes (Schedule C or E – Schedule for individuals) Pennsylvania LLCs (no matter how taxed) are subject to capital stock tax and must file Corporate tax Report (RCT-101) Chi Phi Business Plan... The hand of Brotherhood is always extended.