Case for Support

History

The Zeta Theta Chapter House is owned by all Zeta Theta alumni and actives. The house is paid for and its value is estimated at $380,000 (based on SEV). It is maintained through rental proceeds. The House Corp. operating budget for 2002/3 is $60,000 which is funded by rent ($4,700/semester). Rent is divided by the number of students living at the house during the semester. The active brotherhood also contributes $40/month/man (about $1400 month) to a long-term Endowment fund currently reserved for the eventual replacement of the Chapter House (current value is $75,000).

Facts About the House:

  • skeletal structure is 70 + years old
  • dining area and addition are 40 + years old
  • roof has sheltered close to 1,000 brothers during the past 40 years.

As a non-profit entity, the House Corporation is expected to apply all revenues generated to the purpose of the organization – perpetuating the Zeta Theta Chapter of Sigma Chi. As you can imagine, this has not been a problem. The age and use of the Chapter House provide no shortage of opportunities for expenditures on maintenance, repair, and renovation. The challenge has been to spread limited funds over a seemingly unlimited list of needs.

Repairs and renovations are funded exclusively from the Operating Fund. To deal with some urgent issues, a bank loan of $75,000 was obtained in 1999 to allow the most critical projects to proceed. Combined with funding from current income, the following projects have been completed since then:

  • Windows throughout main house
  • Electrical Upgrade in Addition
  • Kitchen Remodeling
  • Exterior Renovation
  • Exterior Doors
  • Repave Driveway and Parking Lot
  • Foyer Staircase Railing
  • OQ Bathroom

Wherever possible, these projects were completed with labor supplied by active (and occasionally alumni) members of the chapter. This helps stretch the available funding. The OQ Bathroom was just completely remodeled. The actives, with help and direction from House Corp. officers, stripped the walls and floor to the bare studs, instead of cosmetic fixes. Going forward, projects will be completed in this same manner so as to insure quality and longevity.

Despite the effort thus far, the age of the house and the needs of today’s undergrads require significant additional investment in order to provide a safe and appealing environment for our undergraduate Brothers. Although House Corporation is in good financial health, the amount of work required, and the associated costs, exceeds the means of House Corp. and the active chapter.

During the last three years, House Corp. performed a study of long-term options (move to campus, rebuild, etc.) and decided that it was in the best interest of the Chapter to remain at 704 E. Main and make improvements and upgrades as needed. A fundraising committee was organized to formulate a detailed strategy and action plan.

Fundraising Committee

A core group of alumni have been spearheading this initiative. Fundraising activities are integrated with the agenda of House Corporation. Several fundraising committee members are, or have been, officers of the house corporation. The individuals who have put a lot of time and thought into our goals & objectives are:

Lorenzo Barone ’94
Bruce Brown ’74
Paul Cloutier ’92 (Co-Chairman)
John Predmore ’79
Mike Strole ’01
Alex Bogoevich ’95
Jason Catlett ’98
Ken Kayser ’73
Andy Radomski ’98 (Co-Chairman)
Kyle Royston ’02

Several alumni have been very helpful in guiding this group and provided significant inspiration and assistance during the last 5 years:

Len Allgaier ’65
Dick Donnelly ’66
Ernie Schaefer ’68
Jerry Collins ’67
Ron LaRose ’67
Paul Walters ’66

Alumni Input

During the last few years, the fundraising committee has conducted various one-on-one interviews with alumni from several eras. On June 19, 2002, a formal information session was held in metro-Detroit with 40 alumni that represented class years ranging from 1966 through 1996. The purpose of the meeting was to discuss the current status of the house and what our options are going forward, specifically in the areas of refurbishing and fundraising.

Key Messages Heard & Survey Feedback

    1. Enthusiastic support for the cause
    2. Would prefer structured and possibly professionally administered campaign (thereby increasing the level of success)…do it right, do it once
    3. Spread the campaign over three years
    4. Offer a monthly credit card deduction
    5. Coordinate the campaign with the 40th Anniversary celebration
    6. Recruit class representatives to help contact fellow classmates
    7. Hold additional information sessions in other major cities where alumni reside
    8. We should set our per alumni target pledge at $3,000 (over 3 years) for senior alumni

Our Strategic Vision

Based on the needs of the Chapter House and our interest in being more proactive, and through the input from alumni, actives, Kettering University, and Sigma Chi International, we have formulated a vision that includes the following objectives:

  • A safe & secure environment – updated to present-day building codes
  • A commitment to the integrity of the house
  • An aesthetically appealing interior & exterior
  • Execute a successful fundraising activity and build an endowment fund
  • Support and foster the Sigma Chi experience for undergrads
  • Be a leader on the Campus of Kettering in the area of scholarship support and chapter house safety, maintenance and operations

Target Projects & Estimated Costs

Campaign Goal: $500,000

  • $300,000 for projects
  • $200,000 for endowments (Scholarship and on-going maintenance and upgrades)

    Projects & Estimated Costs

  • Architectural & Engineering Fees – $10,000
  • Fire Escape – $10,000 (replace wood w/ steel)
  • Air Conditioning – High Velocity Flex Tube System to preserve architectural character – $40,000
  • Install Separate 2nd Electrical Service for Computer/Network “clean power” in every room – $15,000 (main house)
  • Dining Area – $90,000
    • Raise to foundation, excavate and install drain tile
    • Lay-up new Masonry ½ story end walls
    • Frame 2″ x 6″ end walls at 2-story elevation
    • Install open truss roof with skylights for natural lighting
    • Skywalk from Main house to Addition 2nd floor (under consideration)
  • Addition – $90,000
    • Remove roof, Install new Roof Trusses at 1/1 pitch
    • Install AC Air Handler in New Attic Space
    • Replace T-10 Plywood Siding w/Concrete Stucco Style
    • Additional Electrical Upgrades
    • Replace Insulation to current building code
    • Complete Computer/Network “clean power”
  • Safety Initiatives
    • Sprinkler System (Fire Suppression) – $40,000
    • Hardwired Smoke Detection & Fire Alarm System – $10,000
  • Annual Maintenance Expenses: $10-20,000
    • Screens & Windows
    • Plumbing
    • Chimney & Gutters
    • Carpet & Flooring
    • Painting
    • Driveway
    • Boiler
    • Dishwasher & Major Appliances

Considerations

  1. Tax ConsiderationsThe Theta Theta Chapter of U of M studied this issue in depth during their recent campaign. A House Corporation is classified as an “exempt organization” under the IRS code. The “exempt” terminology is somewhat misleading. The organization is treated as a social club (IRS Code 501.c.7). This means that income from sources other than membership dues can be taxed and contributions are not tax deductible. Alumni who wish to make a tax-deductible donation to Zeta Theta have two options: the Sigma Chi Zeta Theta – Kettering Memorial Scholarship (see below) or the Sigma Chi International Foundation, both of which are pure exempt entities (IRS code 501.c.3). Unfortunately, gifts to these organizations do not benefit the House Corp. projects fund.

    Another important issue is that of gift tax. Gifts to membership organizations similar to House Corporation are treated as gifts to all members. A large gift is treated as if made pro rata to each of the members. Thus, in considering the $10,000 limit, a gift would be divided by at least the number of active members using the house. Since the funds will be used immediately for renovations and upgrades, they are considered gifts of present interests and would not have to be reported for gift tax purposes.

  2. Sigma Chi Zeta Theta – Kettering Memorial ScholarshipIn addition to the Chapter House, there are other considerations related to raising funds for Zeta Theta. In an effort to actively promote education and recognize Brothers who have entered Chapter Eternal, this scholarship was established in 2000 and the endowment currently stands at $20,000. The university administers it and the selection committee is made up of Zeta Theta alumni and a representative from Kettering and the Chapter. Awards are made to A & B section undergrads once a year and as the endowment builds, will be expanded to include two incoming male freshman. Gifts are tax deductible and are eligible for the Employee Gift Match Program, just like donations made to Kettering University. For more information about this initiative, please visit the Chapter website, www.sigmachigmi.com.

    The Fundraising Committee is hopeful that Alumni who support the campaign will consider donating to both the House Corp. projects fund and the Scholarship.

  3. BenchmarkingIn preparation for our fundraiser, we evaluated 3 data points to ensure that our expectations were in check with what others had achieved.

    Sigma Chi Theta Theta – U of M – 3 yr Pledge Drive

    • 1,027 alumni
    • 302 pledges
    • $1,250,000 pledged
    • 13 pledges of $20,000 and more
    • 5 – $100,000
    • 2 – $50,000
    • 3 – $25,000
    • 3 – $20,000
    • Average Pledge (w/ 13 high pledges): $4,100
    • Average Pledge (w/ out high pledges): $1,800
    • Classes from the ’70’s were small and not well represented

    Sigma Chi Delta Delta – Purdue

    Recent Campaign – Mortgage Pay-off

    • 1,300 alumni
    • 350 pledges (27%)
    • $300,000 pledged
    • 1 brother contributed $170,000 (had agreed ahead of time to match what was raised)
    • Average Pledge (w/ out 170k pledge): $372
    • Contributors knew about the “match” program, which influence lower pledges
    • Leveraged email for communication/solicitation
    • Leveraged 125th anniversary activity and contact info to update database

    1987 Campaign

    • 1,100 alumni
    • 400 pledges (estimated)
    • $900,000 pledged
    • 1 – $100k
    • 4 – $25k
    • 10 – $10k
      – Lesson learned: poor collection of ’87 campaign.
      Only $650k collected.

    Phi Gamma Iota Chapter of KetteringKettering participated in an emergency fundraiser that was spearheaded by prominent Phi Gamma Iota alumni. The Chapter’s charter was pulled for various violations and the house was in need of desperate repair. Alumni coordinated an informal fundraiser and raised close to $100,000 in less than six months.

  4. Professional Fundraiser AssistancePaul Cloutier interviewed the individual who served as administrator for Theta Theta’s $1.25 M campaign. Her main focus was the coordination of the mailings, invitations and arrangements associated with cocktail parties and dinners sponsored by local alumni of various cities. Five to six events were held and these events served as information sessions and pledge drives. The invitation process was totally manual, including handwritten address labels. She was highly recommended to Zeta Theta and the process adds a formal and personal element. Her retainer fee for the 18-month Theta Theta project was $40,000.

    The Zeta Theta fundraising committee evaluated her proposal to support ZT’s campaign ($40,000) and decided that an equally effective campaign could be executed by leveraging the web and volunteer support from active alumni. Paul Cloutier and his wife, Stacy, will coordinate the next two information events. Invitations will be done electronically and will reduce printing and postage fees. If we are able to raise sufficient funds to support an administrator and the fees can be negotiated down (or an alternative resource is found), we will reconsider this opportunity.

    We also evaluated the use of large professional organizations that manage fundraising campaigns. Both Delta Delta and Theta Theta used an organization to conduct feasibility studies, survey interest, and to solicit donors. This was deemed too costly and too impersonal for their efforts and the resource was substituted with active alumni. During the Zeta Theta alumni information and input session, it was suggested that we use representatives from each class year to serve as a “class agent” to facilitate communication and gain support from fellow pledge brothers/class mates. Paul Cloutier has obtained several documents and considerable input from Delta Delta and Theta Theta brothers, and this material has been leveraged to generate our business model and strategy.

  5. Leveraging the WebWe have contracted with Logical Solutions to develop and host a web site that will be used to communicate to alumni, solicit pledges, and accept donations online via credit cards. Logical Solutions is a professional and successful web marketing organization owned by a Zeta Theta alumnus who has done similar projects for other organizations, including the Red Cross of Rochester, New York. The development fees were heavily discounted and it was determined that this approach was superior to a site developed and maintained by the Chapter.

    This web site will serve as the main portal to share information about the campaign and to solicit pledges. Information that will be maintained includes:

    • A presentation from House Corp. President, Ken Kayser
    • A presentation from House Corp. Treasurer, Bruce Brown
      • Income Statement
      • Operating Budget
    • A detail business plan for the Capital Campaign
    • Information about the Sigma Chi Zeta Theta-Kettering Scholarship
    • Photos of past projects, upgrades, and future projects
    • Q & A Board
    • Status of the campaign – “success meter”

Campaign Gift Sources (for both the House Projects and the Scholarship)

It is the intent of this committee to reach out to all possible sources for support. The following list identifies our opportunities and priorities. We feel that once the campaign has momentum, we can reach further down the chain for support. The undergrads will be expected to conduct fundraising events each year that support the Chapter House Endowment.

  • Chapter Alumni
  • Corporate/Private gifts arranged through Alumni
  • Corporate Gift Matching – (scholarship only)
  • Kettering and Kettering Faculty
  • Families of Actives

Campaign Cost Estimate – $23,000 *(does not include administrator)

We estimate that it will cost close to $25,000 to conduct an effective campaign. Some of these costs may be avoided through a partnership we have formed with Kettering University. Our arrangement includes the support of staff, print shop, and postage to conduct a few of the mailings. These mailings must also support the Sigma Chi-Kettering Memorial Scholarship endowment.

If the campaign is successful in the early stages and senior alumni support the funding of a professional campaign administrator, we will consider adding one 2 or 3 months into the program.

  • June 2002 Information Session – Completed – $2,000
  • Future Information Sessions – Buffalo, Cleveland, Detroit, Flint, Chicago – $5,000
  • Fundraising Website – $5,000
  • Printed Campaign Material/Invites for Sessions – $2,000
  • Postage & Telephone – Pledge Calls/Conference Calls (meetings) – $1,250
  • Promotional materials for the 40th Anniversary Party – $1,500
  • Gifts, Bricks or plaques to recognize donors – $5,000
  • *Professional Administrator – $20-30,000 (under review…deemed too costly)

Fundraising Program Plan & Goal Assessment

The following gift table identifies what the potential likelihood of success is based on the evaluation of known alumni (does not include lost and inactive), class participation and giving range. We have based our estimates on feedback from alumni, from Kettering regarding general alumni participation, and on data from other Sigma Chi chapters in the area. We also estimate that 25 to 33% of gifts will be allocated towards the Sigma Chi-Kettering Memorial Scholarship. With that estimate in mind, and given a target participation amount of 50% overall, we can achieve our goals over a three year time period. Corporate gift matching for the Scholarship can provide a significant boost to our campaign. Alumni will be contacted by various means: mail, e-mail, and one-on-one. We will use class agents for the ’80’s and ’90’s, and a more personal, one-on-one approach for ’60’s and ’70’s.

Class Years Qty Alumni Participation Target % Split Total of 3 Yr Pledge Totals Era Average Pledge
60’s 94 60 64% 10 $10,000 $100,000
50 $5,000 $250,000
$350,000 $5,833
70’s 276 150 54% 15 $5,000 $75,000
25 $3,000 $75,000
110 $1,500 $165,000
$315,000 $1,100
80’s 200 100 50% 20 $1,500 $30,000
80 $750 $60,000
$90,000 $900
90’s+ 250+ 150 60% 75 $600 $45,000
75 $300 $22,500
$67,500 $450
820 460 56% $822,500

 

Next Steps & Short Term Goals (Fall 2002)

Our immediate plan of attack is summarized below. These steps are intended to build the proper foundation and momentum required to meet our goals. The three most important next steps are: 1) secure seed donations, 2) launch the website, and 3) recruit alumni to help “rush” classmates to support the campaign and the 40th anniversary celebration.

  • Finalize Business Plan
  • Communicate Strategy to Alum Who Have Expressed Interest in Participating
  • Initial Appeal – Secure Seed Money to Initiate Campaign
  • Chapter Database Cleansing – Ongoing
  • Launch Fundraising Web Site – Nov. 9, 2002 – Zetathetafundraiser.com
  • Assemble volunteer kits
  • Recruit Alumni to Host/Coordinate Information Sessions – Ongoing
  • Recruit Alumni to serve as “class agents” – Ongoing
  • Conduct a Sigma Chi-Kettering Scholarship mail campaign through Kettering
  • Schedule Information Sessions in major cities (Zeta Theta Alumni population)
  • Schedule the 40th Anniversary Function – November, 2003 – Ongoing
  • Initiate Architectural & Engineering Plans

Timing

  1. Winter 2003
    • Promote 40th and Fundraising Campaign
    • Three-Point Article
    • Email Campaign
    • Phone Call Campaign
    • Class Agent Activity
    • Conduct Two Information Sessions (like Townsend event)
  2. Spring & Summer 2003
    • Three-Point Article
    • Email Campaign
    • Sigma Chi-Kettering Scholarship mail campaign
    • Phone Call Campaign – 40th Anniversary
    • Class Agent Activity
    • Conduct Two Information Sessions
    • Review Goals – Affirm Attainment
  3. Fall 2003
    • Class Agent Activity
    • 40th Anniversary Celebration
    • Activity at House to demonstrate need
    • Secure commitment from additional alumni