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The west side of the house is currently being painted and renovated.

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.

Rebuilding our cash reserves quickly is key to completing the many projects we hope to accomplish at an acceptable cost to the chapter.

So how do we successfully achieve our goals despite these headwinds? By better understanding how much money we’ll have available to us in the coming years and making sure that we are making the best decisions possible about how to spend that money. Here are a couple of strategies that we are considering:

First, the more brothers we have in the house, the more money we can count on to flow into the
house’s facility reserve account each year. A larger brotherhood means more sustained revenue for house improvements. Small investments and thoughtful engagement on supporting rush efforts can have a large impact of house financials in the future.

Second, investigating how we can safely borrow money to pay for projects that limits financial risk to DKE but allows us to pay for essential projects now before construction inflation makes those projects even more expensive. For instance, DKE is the beneficiary of two endowment funds (from Jordan Lamb ’39 and Eugene Patterson ’39) that provide us with regular distributions that we can use to maintain the house. We are looking into opportunities to borrow money from the larger Lamb fund to pay for projects now. Loans would be repaid in future years with contributions from undergraduates and alumni alike.

Third, find DKE alumni willing to share their expertise in architecture, engineering, etc. to help us make the best possible decisions about where we need to invest large amounts of money versus where we can get by with smaller less expensive projects that keep the house viable. If you have any of those skills and would like to contribute, please let me know. I’d love to chat with you.

Fourth, better understand how much revenue we can expect from alumni donations in the coming years so that we can properly balance what we believe we can spend and how much money we could potentially borrow. In recent years we’ve had many brothers generously donate to our Building our Legacy Capital Campaign. We’ve had a great response to our March Giving Day campaigns that have set records for Greek participation. We’ve increased the numbers of dues paying alumni year over year and hope to continue that trend. So, for example, instead of sending $75 for dues, send $250. If you’ve sent $250 in the past, consider sending $500 or $1000. If we can count on receiving similar contributions on an annual basis and, where possible, increase the number and size of those contributions going forward, we can make better informed, proactive decisions about how to invest dollars into the house.

So, what’s next you ask?

Great question! As I mentioned before, the projects that are currently underway are draining our
existing financial resources. There won’t be much money to spend on house projects over the next year. We know and accept that. So, we plan to dedicate much of the next year on no-cost projects like engaging our potential donor base (you!) to solidify your financial commitment to DKE, identifying low cost/ value added projects that will enhance the livability of the house in the near term, and better wrapping our heads around the size and scope of larger projects that will be needed in the years to come (such as the electrical distribution system upgrades that I mentioned last week). At the end of the day, we are trying to find the best possible financial strategy to properly balance money being spent in the short term, with money being saved for the long term.

Despite our need to accumulate financial resources both with Cornell and at the Delta Chi Association we can’t simply stop spending dollars right now. We are riding a wave of positive momentum with Cornell, engaged alumni, and active brothers that is important to maintain. Therefore, we are working closely with our undergraduate leaders to identify a few small project goals that can make the house more attractive to current and future DKEs and kickstart the next era of investment in the livability of the DKE house. More on that next week in what I hope will be the last of this series of communications that I’m flooding your inboxes with this month.

Once again, please let me know by responding to this email if you have any questions or concerns. I’d love to chat with anyone that is interested in how all of this will play out. Thanks again for your patience with me, and with your passion for the future of DKE at Cornell.

The planter outside the Living Room has been rebuilt.

In the bonds,

Mike Furman ‘79
furmanme@gmail.com
267-825-1233

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