Brother <<Last Name>>,
DKE Finances: the Good, the Bad, and the Ugly
This is my third email in three weeks about the current state of our chapter and I hope I haven’t lost you all yet. Two weeks ago, I sent an email about current projects that are underway at 13 South Avenue (see here) and last week I followed that up with an email that discusses some of our needs going forward (see here). As you can see, we have been dedicating a lot of time, energy, and resources over the past few years in hopes of preserving the long-term viability of our chapter as an on campus Greek institution and our chapter lodge as a desirable on campus student residence. While DKE can claim many successes over that time period, there is still much to be done. To continue that success, we need continued commitment from Cornell, our undergraduates, and our alumni who value the preservation of DKE at Cornell. That commitment comes in many forms… but today I plan to focus on the financial needs of the chapter, now and into the future.
Before proceeding about the financial needs of the house, I want to take a moment to call attention to the strength of the current active brotherhood on campus. Even though we are a chapter with over 150 years of history, re-starting a chapter was no easy feat. Now, about 5 years into our return to campus, the undergrads have established a strong brotherhood. After re-starting the chapter under alumni guidance, they have fully moved to a point of self-governance and are successfully managing their financials, rush, rituals, and the relationships with Cornell and DKE International. There will be more to share about this as the semester proceeds.
As I mentioned in my previous emails, our chapter has spent a lot of time and resources over the last decade investing in meeting Cornell residence requirements for health and safety, as well as improving the outside of the house both structurally and aesthetically. We are now turning our focus to making sure the livability of the house itself is improved so that we can compete with other residential spaces for students. To put it bluntly, we need to spend money to make money. So, what does that mean?
First the good news…
The DKE Group Housing Fund (the organizational accounts managed by Cornell with input from our actives and Alumni) has completely paid for all completed projects totaling around $1.5 million in costs over the past eight years with a small amount of money left over for future projects. The Group Housing Fund also includes our gift account where our Giving Day contributions are held. All loans incurred over that time have been repaid and the growth of the active brotherhood ensures a sizeable annual contribution to the house’s facility reserve account. We maintain an excellent relationship between the Cornell Facilities staff, our Alumni volunteers, and our undergraduate House Manager, ensuring that the dollars flowing in and out of those accounts are spent smartly. The Delta Chi Association, our 501(c)(3)-designated alumni organization, continues to bring in revenues from a number of sources including yearly dues payments from many of you, remaining contributions from our Building Our Legacy Capital Campaign that’s completing its fifth and final year, and additional pledged contributions from engaged alumni who have expressed a willingness to make financial commitments to the organization in future years.
Now the not so good news…
After our latest set of projects, both the DKE Group Housing Fund and the Delta Chi Association have very small amounts of money available for discretionary spending at this time. The Cornell accounts will have somewhere between $10,000 and $25,000 after the current projects are done. There are some variable costs associated with these projects that we cannot fully account for until the projects are completed. The Delta Chi Association is down to about $10,000 in our bank account as the 15-member Board of Directors recently authorized more than $100,000 of DXA dollars to help finance the house projects currently underway.
And finally, the really not good news…
A final headwind in our face is the Cornell requirement that we have the full anticipated cost of a project in hand and locked down in the construction office before contracts can be signed and projects executed. To put it simply, that means we need to have all the money anticipated for a project already in our accounts. Fundraising after we get the bids would delay the project and likely lead to an increased cost. For example, to do a project that is anticipated to be $150,000, we need to raise and have the $150,000 in hand plus some additional funds to cover us if the bid is higher. So, we really need at least $170,000 on hand for a $150,000 project. If we don’t have the additional money available and we delay the project then we run the risk that it could cost even more. Unfortunately, the cost of completing house projects is skyrocketing year after year with no discernable end in sight. There are many reasons for this. Cornell and Ithaca College continue to embark on a number of large construction projects which monopolize the limited number of construction professionals available in the Tompkins County area. Our status as a Cornell-owned property requires us to utilize union labor and follow specific processes to contract for services. In addition, rising costs of building materials, construction labor, and issues with global supply chains that we have all become aware of over the past year or two make estimating project costs and timelines much more difficult.