What is the
Endowment Fund?
The Endowment Fund of the Phi Kappa Psi Fraternity was formed
"to aid, encourage, promote and contribute to the education
and scholastic attainments" of Phi Psis across the nation.
Eight Trustees exercise stewardship over the Fund.
The Endowment Fund, organized in 1914, is a 501(c)(3) nonprofit,
public educational foundation. As such, the Endowment Fund is
the only charitable arm of Phi Kappa Psi entitling donors to a
full tax deduction within the limits set by the Internal Revenue
Code.
The Endowment Fund provides funds for the Fraternity through a
variety of programs and services which directly affect
undergraduates and their chapters, and the level of alumni
involvement, The primary responsibilities of the Endowment Fund
are threefold:
*The education
of undergraduates in the traditions of the Phi Kappa Psi
Fraternity whose ideals and principles provide a
guiding force for life.
*Leadership
training among undergraduates for their personal growth and
development, for continuity in chapter management and for the
continued strength of our Fraternity and society in general.
*Encouragement
of academic achievement among our undergraduates through
recognition of academic excellence, scholarships and maintaining
the proper environment for academic excellence in chapters.
How are my gifts
invested?
The investment policy of the Endowment Fund is to produce a
reasonable annual income, coupled with capital appreciation, while
conservatively maintaining safety. To achieve these objectives,
the Fund is managed as a widely diversified, balanced fund.
The Trustees are committed to maintaining the integrity of the
Endowment Fund. The corpus will never be invaded; only the income
generated will be used for scholarships, educational programs and
loans.
What are Chapter
Scholarship Funds?
Chapter Scholarship Funds (CSFs) are separate, directed funds
within the Endowment Fund, the use of which benefits a particular
chapter. The Texas Beta Chapter set up the Bill Collins
Scholarship Fund in 2000 for just this purpose. These
Funds are created and grow with directed gifts from individual
alumni, house corporations, parents or friends.
Each year, the Trustees of the Endowment Fund typically make 5
percent of each CSF available for scholarships and grants to the
members of those chapters that have CSFs established.
In contributing to this fund you should make the donation check
payable to The Endowment Fund and it should be sent to the
Fraternity Headquarters (501 Lockerbie Square, Indianapolis,
Indiana 46202). The memo section on the check must indicate that
the gift is for the Bill Collins Scholarship Fund and the Texas
Beta Chapter. The Endowment Fund will acknowledge each gift for
tax purposes and provide the house corporation with periodic
status reports.
What is the
Current Status of the Bill Collins Fund?
As of November 2002 the balance in the dedicated account reserved
for use with the Texas Beta chapter stands at approximately
$109,000 dollars. This amount provides for an annual scholarship
award of almost $5,000 for use with the undergraduates of Texas
Beta. In addition these monies are helping in the construction of
the computer lab associated with the new chapter house.
To read up on the use of the Endowment Fund in our "100
Bricks/100 Brothers" Housing campaign you can Click
Here.
| Fiscal
Year 2001: Endowment Fund Annual Report |
Amidst
a year of tragedy and turmoil, Phi Kappa Psi members and
friends were able to help the Endowment Fund weather what
could have been a very disappointing year. Many fraternity
foundations and other charitable agencies had a very
difficult year, due to a tightening economy and the
understandable change in the focus of many contributors to
disaster relief efforts. Despite these influences, the
Endowment Fund weathered the storm with income of just over
$2 million and real growth of just under $650,000.
The Board of Trustees
In 2000, the Board of Trustees was increased from eight to
ten members and all ten served with distinction during the
2001 fiscal year. Continuing in the leadership positions
were Chairman, Wayne W. Wilson, Michigan Beta '59, Vice
Chairman, Jerry Nelson, California Epsilon '48 and
Secretary-Treasurer, John F. Buck, Indiana Beta '75. Our
other trustees are Don V. Fites, Indiana Epsilon '53, James
E. Hagler, Tennessee Epsilon '98 (Tennessee Delta '58),
Henry B. Marvin, California Delta '56, Dr. D. Bruce McMahan,
California Delta '57, Matthew C. Michelsen, Rhode Island
Beta '91, A. Scott Noble, Texas Alpha '81, and Richard E.
Ong, Oregon Beta '55. Each trustee gives a great deal of
time and travel and makes a significant financial commitment
to help the Endowment.
GROWTH
At the close of the report year, December 31, 2001, the
Endowment Fund's assets had grown by over 7% from the year
before to $9,502.598. The graph below documents the growth
of the Fund in the last decade. The figures have been
adjusted to remove Heritage Hall, furnishings and equipment.
INCOME
Annual Campaign - The Endowment's annual campaign
seeks to raise funds each year for unrestricted purposes and
for our restricted chapter scholarship funds. Gifts come
from our annual campaign mailings, chapter and area alumni
events, and from our Web site. Each gift is a vote of
confidence in our ability to help our undergraduates
succeed.
The Annual Campaign ending December 31, 2001 resulted in a
total of 892 unrestricted gifts totaling $91,058, compared
to last year's 1,374 gifts totaling $100,377. This year's
average gift was $102.08, up significantly from last year's
average of $73.05. We are thankful to all those who invested
in the Endowment, despite an uncertain economy and the
terrible tragedies that affected the country.
Chapter Scholarship Funds (CSF) - There were 1,205
gifts made to chapter scholarship funds during the fiscal
year. These gifts totaled just under $420,000 and helped
raise the total of our restricted funds to just over $5
million. That equates to $250,000 available for
chapter-based scholarships during the next academic year. We
know of no other fraternity foundation that can offer this
level of support to help chapters recruit scholars and
reward leaders - even those of fraternities many times our
size.
Top 20 Chapter Funds - See how your chapter ranks!
#1 California Epsilon $899,397
#2 Ohio Delta $535,043
#3 Michigan Beta $428,327
#4 Washington Alpha $293,946
#5 Ohio Beta $246,896
#6 Minnesota Beta $181,457
#7 Nebraska Alpha $115,994
#8 California Delta $111,309
#9 Texas Beta $106,568
#10 Indiana Alpha $103,51
#11 Indiana Delta $98,132
#12 Indiana Beta $88,926
#13 Maryland Alpha $88,337
#14 Missouri Alpha $85,131
#15 Oregon Alpha $84,833
#16 Virginia Beta $82,398
#17 Ohio Epsilon $81,132
#18 Oregon Beta $77,008
#19 California Lambda $76,423
#20 Illinois Delta $75,811
*These totals include all funds from which the chapter
benefits, including Chapter Scholarship Funds, memorial
scholarship funds and donor-named scholarship funds and may
not reflect earnings or awards paid out.
Bridge Builders - This was the inaugural year of the
Bridge Builders annual gift program. Bridge Builders make a
commitment to support each year's annual campaign with a
gift of $250 or more. Gifts to the Fraternity Loyalty Fund
and to Chapter Scholarship Funds qualify. We enjoyed great
success with this new program for 2001, welcoming 337
charter members with total gifts of over $650,000. In
recognition of their loyalty, each Bridge Builder has his
name engraved on a plaque on the Donor Wall of Honor at
Heritage Hall.
Other Gifts and Grants - Gifts received outside the
Annual Campaign totaled just over $400,000. Included in this
amount was a gift to help underwrite grants to improve
educational technology in our chapters (see Grants to
Chapters, below) and a grant from the Summerfield Foundation
in New York City. Created from the estate of Solon E.
Summerfield, Kansas Alpha 1899, the Summerfield Foundation
has provided for Endowment Fund scholarships for over half a
century.
Summerfield Society - The Summerfield Society honors
those who have included the Endowment in their estates. This
year, we received several estate gifts totaling just over
$500,000. We continue to be grateful to Brothers Frederick
D. Bornman, New Hampshire Alpha '18 and Ernest H. Garbe, New
York Gamma '40, whose gifts continued to help us in 2001.
Investments - The Endowment Fund continued its
conservative investment strategy to protect against losses
in the volatile market. The majority of the corpus stayed
invested in fixed income securities. Equities were heavy in
covered calls and options. This strategy has worked well for
us for the past several years, though the percentages
invested in each change as needed. The primary focus will
remain on protecting the corpus, while providing an income
level sufficient for the funds to grow steadily over time.
As of December 31, 2001 the portfolio consisted of a fixed
income fund (about 56%), an equities fund (about 34%), loans
to chapter house corporations (about 7%) and shares in an
arbitrage fund (about 3%) received as a gift. Monthly
reports are provided by each fund manager, comparing our
returns to a number of market indices. The Trustee
Investment Committee reviews performance, monitors market
conditions and makes recommendations at each meeting.
Loans available to chapter house corporations through the
Chapter Scholarship Fund (CSF) program is helping to provide
safe reserves for the support of chapter housing. This year
that mission was put to the test as five chapters applied
for loans totaling about $600,000. In at least two cases,
the chapters might not have survived without their CSF
reserves that allowed them to make critical improvements to
their properties.
These loans are made at market conditions, with appropriate
collateral, but the real benefit is that the interest and
principle repaid are placed right back in the chapter's CSF,
so that when the note is paid off, the money is there to
borrow again! Additionally, even while the money is loaned,
chapters continue to receive scholarships equal to 5% of the
balance each year (including that amount invested in the
loan).
EXPENSES
The Mission of the Endowment Fund is to foster the
development of leaders and promote academic excellence in
higher education. This year we fulfilled this mission in
three primary ways:
- by
providing grants for programs supporting leadership,
scholarship and service;
- through
national and chapter scholarships and awards to
outstanding Phi Psi students and;
- via
periodic grants to chapters to help them improve the
educational and technological resources in their houses.
Overall, program
services (grants, scholarships, etc.) totaled just over
$816,000 - our largest amount ever!
National and Chapter Scholarships - During the past
fiscal year, the Endowment Fund awarded national and
chapter-based scholarships totaling over $200,000. That's an
increase of $40,000, over last year's award levels.
Current CSF policies make available an amount equal to 5% of
the principal to chapters each year for scholarships and
grants. This ensures growth in the CSFs, which are designed
to be permanent - helping each chapter for its lifetime.
Alumni volunteers from each chapter set the criteria and
process for the awarding of moneys from their account. Their
recommendations are forwarded to the Trustees of the
Endowment Fund for final approval and payment of
scholarships.
Grants to Chapters - Due to the generosity of two
donors, Endowment Fund Trustees D. Bruce McMahan, California
Delta '57 and Jerry Nelson, California Epsilon '48, the
Endowment Fund was able to underwrite a further $366,000 in
grants to chapters for the improvement of technology in
their houses. Over the last three years, this program has
underwritten a total of over $1.5 million to over half of
Phi Psi's chapters, helping them to add in-house networks,
computer hardware and software, create computer labs and
libraries and set up high-speed connections to university
networks and the Internet.
The significance of this support over the last three years
cannot be under-emphasized. These grants have helped keep
our chapter houses competitive with college residence halls
and have provided our members with comparable educational
resources. This improves recruitment and retention, fills
beds and increases the support of parents and the college.
No other fraternity foundation that we know of has supported
undergraduate chapters with anywhere near this level of
investment!
Grants to the Fraternity - The Endowment Fund makes
annual grants to the Phi Kappa Psi Fraternity for programs
that support scholarship and leadership. During 2001, the
Fraternity put to good use roughly $250,000 in grants to
programs which promote scholarship and education, leadership
development and philanthropy, including:
- The
Presidents Leadership Academy (PLA), which brings more
than 60 GPs to Indianapolis for a weekend of leadership
training and the development of personal leadership
skills.
- The
Leadership Experience, which provides a similar program
at the chapter level.
- Funding
for a portion of the expenses of the Educational
Leadership Consultant program. These young Phi Psis are
trained to provide leadership and management consultant
services for our chapters.
- Funding
for workshops and retreats for chapter advisors and
house corporation presidents, providing them ideas and
skills to work more effectively with our undergraduates.
- Scholarships
to the North-American Interfraternity Conference's
Undergraduate Interfraternity Institute (UIFI), an
award-winning leadership program for men and women who
are chapter or Greek system leaders.
Administrative
-Thomas C. Pennington, Texas Alpha '80, serves the Endowment
Fund as its Director of Development. This year, we added a
second full-time employee to our team - Traci Christler, a
member of Alpha Phi, took over as our Administrative
Assistant in February and has done a great job. In,
addition, the Endowment Fund contracts services, such as
accounting and payroll, from the Phi Kappa Psi Fraternity
and other agencies and individuals. General and
administrative expenses totaled approximately $235,000,
about 2.5% of total assets.
Fundraising costs were just over $150,000, about 1.6%
of total assets. Because 2002 is the Sesquicentennial year,
staff and trustees have traveled a bit more to meet with
alumni and promote support for our 150th Anniversary. Thus,
these costs are up slightly from 2000. If you are interested
to help organize or sponsor an event in your area, please
call us! We enjoy helping alumni get together to hear more
about how the Endowment Fund is helping our members.
This year also marked the first issue of Envision, a
publication designed to make Endowment Fund investors and
friends more aware of the goals and successes of the Fund
and the many organizations that benefit from its grants and
the work of its volunteers. We hope the publication will
become an annual event and thank everyone who responded with
comments, ideas and support!
SUMMARY
2001 didn't match our 2000 giving year (our best year ever),
but in a very difficult environment, we held our own. We
also were able to make some important investments in the
organization, based on the successes of 2000:
- We
increased national and chapter scholarships by almost
20%.
- We
provided loans totaling almost $600,000, enabling
several chapter houses to do necessary improvements and
renovations to their properties.
- We made
progress in formalizing annual gift clubs and
recognition and will continue refining that program this
year.
- We added a
staff member to help improve donor services and support
for chapter and alumni group fundraising.
- We made a
significant investment in a future web site and services
for the organization.
- We
provided an additional $366,000+ to help chapters
improve chapter house technology.
Thank you to all
of you who made an investment in the Endowment Fund this
year. Whether to your chapter fund or to unrestricted use to
help all Phi Psis, your money is safe here and helps more
and more men each year to take maximum advantage of the
opportunities offered by joining Phi Kappa Psi. We'll
continue to do our best to be responsive to your questions
and requests and to expand on the services and information
available to you. Please don't hesitate to contact us if we
can be of any assistance! |
|
Phi
Kappa Psi Fraternity
