Auburn
University Senate Minutes
9 May 2000
Absent: D. Devries, R. Middleton,
C. Mullen, D. Lustig, M. El-Halwagi, R. Perritt, R. Wylie, B. Hames, W.
Brawner, R. Henderson, R. Kenworthy, S. Fuller, R. Bartlett, L. Slaten, T. Brower,
J. Bannon, H. Maraman, C. Buchanan, J. Neidigh, J. Ferguson, W. Alderman, J.
Henton, P. Benson, K. Robinson, G. Mullen, D. Sollie
Absent (Substitute): R. Muntifering (L.
Frobish), R. Miller (T. McAdams), M. West (J. Osborne), C. Brunner (C. Hendrix)
The meeting
was called to order at 3:10 p.m.
The
minutes for the previous meeting were approved as posted. They can be found on the Senate web page at https://auburn.edu/administration/governance/senate/schedule.html.
Announcements:
A. Provost William Walker
Dr.
Muse is preparing to leave the country on an Alumni trip. He would like to bring the Senators up to
date on Legislative activities. The
legislature has 3 more meetings, 2 meetings this week and 1 meeting next
week. The Education Trust Fund is still
not completed. They are still
squabbling over special appropriations.
However, it appears to be in relatively good shape as far as AU is
concerned. The 5.4% increase still
looks good. This should allow for a 5%
increase in salaries, a 3% increase in operation and maintenance, $1 million
dollars more to deferred maintenance, and some funds for a few extra
things.
House
bill 204 (teacher pay raise) is still a problem. The purpose of this bill is to raise teacher salaries to the
national average. The claim is that
this will take 41% of any increase in the Education Trust Fund revenue. But with benefits it will actually take 60%,
and when everything is included, it will probably take 80%. The House passed this bill overwhelmingly;
it is now being held up in the Senate.
The
legislature passed and the Governor signed a bill excluding Higher Education
from the law requiring criminal background checks.
The
AU trustee bill is out of committee.
Changes have been made to the bill and it will now go to the
Senate. If major changes have been
made, the bill will have to go to a compromise committee and then to the
Secretary of State. Since this is an amendment
to the Constitution, it will not require a signature by the Governor.
The
Promotion and Tenure process is now complete.
The deadline for P&T will be moved up by a couple of months due to
the change to the Semester system. Dr.
Walker recommends that faculty should be getting their dossiers ready now for
the next cycle. There will be a meeting
of the P&T committee with faculty on May 25 at 2:30 P.M. in 239 Broun
Hall. He encourages faculty to attend
and ask any questions that they may have.
The
Budget Advisory committee finished its work today and will send recommendations
to the President.
The
search for the VP for Student Affairs is still progressing. Over 60 applications have been
received. The hope is to have prospects
on campus within the next few weeks.
The
search for the Dean of Architecture, Design and Construction is about to be
completed. The final candidate is in
town today. We hope to have this search
completed within the next several weeks.
Steve
Knowlton (Physics): He was concerned
about the proposed changes in the main library. Were these recommended changes?
Will the changes be discussed at a future Senate meeting? How will these changes affect the
availability of reference librarians?
Dean
Stella Bentley: The word of the library
changes has gotten out rather prematurely since the written report from the
task force was just received yesterday afternoon. The task force has been working since last Fall. The availability of information has changed
over the years. With more information
being available electronically, the foot traffic in the library has dropped
from 30,000 to 12,000, and circulations have also decreased. The library faculty cannot man desks and
provide other reference assistance.
With 4 desks being manned 96 hours a week, faculty cannot be teaching as
much as they should or be providing outreach assistance. She believes that the changes will actually
make reference assistance better because it will be being done by faculty and
not by students and staff. If
information sources can be consolidated it should allow faculty to do what they
need to do. The change should allow
library faculty more time to work with faculty. She invites faculty to come to the library and speak with the
library faculty and the Dean to provide input on how best to serve the AU
campus.
Rhonald
Jenkins (Aerospace Engineering): Dr. Walker, when you said the P&T process
was complete, did you mean the appeals process?
Provost
Walker: Yes. The letters were mailed a
few days ago.
David
Sutton (Communication): Will the new deadlines for P&T be published?
Provost
Walker: Yes, he would like faculty input into the timing of the process.
Jim
Bradley (Biological Sciences, Chair-Elect): As a follow-up to Dean Bentley’s
comments, will there only be a single reference librarian available at
particular times?
Dean
Bentley: No, this hasn’t been
decided. There may be double or triple
staffing during certain times depending on the demand. Different disciplines will be represented
when needed.
Connor
Bailey (Ag Econ & Rural Soc): He
had details on the substitute legislation concerning the selection of Board of
Trustee members and he could provide that information if the Senators wanted to
hear it. But his question concerned SB478,
a bill in the legislature that would alter how we handle some contracts at
AU. He was concerned about contracts
occurring that were really not in our best interest.
Don
Large: Almost every other higher
education unit has proposed this legislature; it has wide support. It is not intended to bypass competitive bid
laws which require that anything over $7500 go out for public bid. There are some problems, however, with the
existing law because of limitations to a 3-year contract. The bill, if passed, will allow for AU, in
cases concerning non-state funds that are for revenue generators, (not in-state
or non-revenue generators) to go out and negotiate for longer than 3 year
contracts. Examples where this would
be beneficial include the transit authority.
If the company could have been given a longer contract, they could have
amortized over 5 to 7 years which would have given everyone, including the
students, a better break in price.
Other examples that would benefit from longer contracts include campus
dining and health services.
Jo
Heath (Math): She had a question for
Conner Bailey concerning the substitute legislation for the Board of Trustee
selection. She wanted to know what the
substitute legislation was.
Conner
Bailey (Ag Economics & Rural Sociology): The substitute for HB326 includes:
6-year terms
Maximum age of 69 at time of
appointment
2-term limit
Governor is ex-officio member
State Superintendent of
Education will be retained until a vacancy occurs, then will be replaced by
an At-large member appointed
by the Auburn Alumni
3 At-large members will be added
(from continental US)
The
Governor will nominate the remaining members (other than Alumni Association
appointed member) from a list of nominations provided by the Nominations
committee. The Nominations committee
will be made up of:
President Pro-Tempore of the
Board of Trustees
One additional Board member
President, AU Alumni Association
One additional Alumni Board
member
One person selected by the
Governor
Chair of AU Faculty Senate,
ex-officio, non-voting member
Herb
Rotfeld (Marketing & Transportation): He had a question about bus
safety. He had noticed that drivers
were telling students to cross in front of the bus. This is extremely dangerous.
He doesn’t know whom to call to tell the drivers to stop doing
this.
Provost
Walker: He felt that this, along with
other safety issues, needed to be addressed especially in light of the tragic
accident that occurred recently.
Howard
Thomas (Textile Engineering): He felt that Chief Nevin should be encouraged to
enforce the laws on campus. This
includes speeding violations and weapons violations, the latter especially
considering the recent shooting on campus.
Bruce
Gladden: He reminded the faculty that
there would be an AAUP forum concerning the merger of Journalism and
Communications on May 11 at 4:00 P.M. in 206 Tichenor Hall. He also reminded the Senators that there
would be an open forum on the new Biological Safety Manual on May 24, 2000 at
3:30 P.M. at the AUHCC. Faculty could
pick up information on the Biological Safety Manual forum at the rear of the
auditorium.
B. Senate Chair: Dr. Bruce Gladden
Rules
committee update – Three new ad hoc committees have been formed.
1. Outreach Scholarship Assessment Committee –
this committee is asked to investigate the assessment of Outreach
scholarship. More specifically, the
committee is asked to review the Flynt Report on Outreach Scholarship and
suggest how the recommendations of that report might be integrated into the
Handbook and into Promotion and Tenure policy at AU. Members are: Charlie
Hendrix (Chair), Robert Montjoy, Beth Guertal, Lee Stribling, and Jean Weese.
2. Professional Improvement Leave – This
committee is charged to: a) investigate Auburn’s current Professional
Improvement Leave policy; b) suggest how the current policy can be brought into
closer alignment with our benchmark institutions; c) “semesterize” the policy,
and; d) investigate methods whereby participation in professional improvement
leave can be dramatically increased.
Members are: Jim Bradley
(Chair), Barbara Ash, Jacob Dane, Alex Dunlop, and Chris Newland.
3. Committee on Doctoral Study for Nursing
Faculty – this committee is asked to investigate the possibility of renewable
contracts for Nursing Faculty to allow doctoral study that is not on the
“tenure clock” for those faculty. More
broadly, the committee is asked to study the possible implications of such a
policy and to suggest other solutions to the shortage of Nursing faculty with
terminal degrees, the high turnover rate of Nursing faculty, and the difficulty
of such faculty in achieving tenure and promotion. Members are: Greg Pettit
(Chair), Tim Dykstal, Jo Heath, Charlotte Skelton, and Steve Williams.
Committee
Reports:
A. Faculty Salaries committee: Dr. Larry Gerber (History)
The
Committee members include: Larry
Gerber, Don Large, G. Lowther, Bill Walker, Dennis Devries, P. Michael
Robinson, Cindy Brunner, and Renee Middleton.
One
past item he would like to bring up again was the option of whether 9-month
faculty could receive paychecks over a 12-month period. When the faculty were asked last year there
was considerable interest in this, over 100 faculty asked for this option. The Salaries committee has determined that
it is technically feasible, however, it would not be practical at this point in
time because of the Semester transition.
It would be feasible for this option to occur in Fall of 2001. Implementation of the option may require
that other 9-month faculty receive 9 full paychecks instead of 8 full paychecks
and 2, ½ paychecks.
The
Salaries committee has been working with questions of equity and fairness. The goal at this time is to achieve faculty
salaries of 100% of the regional average by rank. They have been struggling with what this means in terms of detail
for years. Should there be parameters
which would prevent faculty members from falling below some minimum? The committee went about trying to set up
some floor, below which no individual faculty member would fall. The Martin Formula tries to adjust for
discipline, rank, and years in rank.
There has been much discussion about just how good the Martin Formula
is. Mary Baker has been working with
the Salaries committee in seeing if they could validate the Martin
Formula. The committee is hoping in the
future to either report confirmation or refinement of the Martin Formula.
The
floor was established at 80%. There is
no scientific reason for this; no other University uses this. It was established previously due to
practical considerations and based on how much money was available. In the past, ½% of the salary base was
available for equity adjustments. Now,
achieving a goal of no less than 80% would require much less money than ½% of
the salary base.
Whereas
it is the stated policy of Auburn University to bring salaries up to the
regional average for each faculty rank; and
Whereas
it is understood that in moving to achieve this goal, there may be considerable
variation in salary levels among members of the faculty – with some faculty
receiving salaries well above regional average and others receiving salaries
that fall below regional average – but that it is reasonable to establish a
minimum level of compensation below which the salary of no faculty member
performing his or her duties adequately should fall; therefore,
Be
it resolved that it should be the policy of Auburn University that no individual
faculty member receive a salary of less than 80% of regional average (adjusted
for discipline, rank, time in rank, and total years of service at Auburn or
elsewhere) unless that person’s supervisor can provide the provost with a
satisfactory explanation as to why that individual’s salary should fall below
this minimum standard.
Bruce
Gladden opened the discussion to the Senators concerning the Resolution.
Alex
Dunlop (English): Was there any attempt
by the Salaries Committee to define “satisfactory explanation”.
Larry
Gerber: No. The discussion was whether the faculty member should be able to
see the reason in writing. The
committee chose to leave this to the discretion of the chair/head. By this point in time, if yearly activity reports
and meetings have been being conducted, there should not be any mystery as to
why.
Alex
Dunlop (English): He questioned the
order of the wording in the resolution.
Thought the wording implied that the less than 80% of regional average
was before any adjustments.
Larry
Gerber: The wording was meant to imply
that no faculty member would end up with less than 80% of the regional average
after adjustments.
James
Novak (Agriculture Economics & Rural Sociology): Dr. Novak proposed a friendly amendment that would adjust
12-month faculty salaries to 9 month for calculations.
Larry
Gerber: This is already done.
Jim
Hansen (History): How much money does
this mean? Can it happen with this
year’s budget? What will it mean to
some averages, will it exacerbate some differences between Departments and
College/Schools?
Larry
Gerber: 80% is a practical amount. The committee already determined the cost
based on the Martin Formula and the cost would be slightly less than $400,000
if everyone at Auburn were brought up to 80%.
It would have cost much more if it had been done three or four years
ago. It is feasible now. As far as variations between units on
campus, he thinks there will be a slight tendency to lessen the variation. However, the committee has not done these
calculations.
Lee
Colquitt (Finance): What percent of the
faculty will be affected by this?
Larry
Gerber: Less than 10%.
Bruce
Gladden (Chair) called for a voice vote on the Resolution. It passed without dissent.
Bruce
Gladden introduced Andy Redman as the Senate liaison with the SGA. This position was created to enhance
communication between the Senate and the SGA and to improve the relationship
between faculty and students.
Andy
Redman: He is the Senate Liaison with
the SGA this year. He realized last
year that the communication between the SGA and the Senate was nonexistent, so
he created the position to better the relationship between the organizations. If any faculty member has questions or
concerns, they can ask him or attend the SGA meetings on Monday at 7:00 at Foy
Union.
B. Faculty Grievance: Dr. Gary Mullen (Entomology and Plant Pathology)
The
committee has been meeting since July 1999 and is composed of Gary Mullen as
Chair, Robert Drakeford, James M. Gravois, Nancy M. Hartsfield, and John G.
Heilman. In the faculty handbook, there
is a provision for periodic review of the grievance procedure. It is indicated that it should be a
bi-annual review. Last June, Jo Heath
appointed this ad hoc Committee. During their interactions, they also received input and concerns
from all over campus. Some of these
have been minor concerns and were handled very easily. Others were more significant concerns. A meeting was held with the members of the
Faculty Grievance Committee, the past and present chairs, the past and present
chairs of the Hearing Committee, faculty members who could have filed
grievances but did not, administrators that have been involved in grievance
cases, members of the AAUP, the Provost, and other community members. This study committee felt that there were
15 important things to discuss.
Dr.
Mullen did address the number of grievance cases that are filed. One needs to appreciate the difficulty of identifying
the number of cases because of the confidentiality that surrounds this
process. Because of that, we do not
have access to the number of cases, the nature of the cases, or the outcome of
the cases. The Committee did feel that
there were a substantial number of cases filed. The Committee is recommending that the chair of the Faculty
Grievance Committee each year provide a summary report about the number of
cases and a description of each case.
There
is also concern about the time commitment involved with the grievance
process. There are recommendations that
are provided concerning time frame.
From those concerns came a recommendation for alternative options besides
the grievance process. On page 12,
there is a report from the subcommittee who contacted a wide range of other
universities and institutions. The
Committee is recommending that Auburn University establish an
Ombudsperson. This person is an
official of the university who is to investigate activities that may infringe
on the right of faculty. A Mediator is
also suggested. This person is to
negotiate between the parties involved.
Recommendation
number five involves the inconsistencies with procedures. This whole process is not a legal
proceeding. It does not involve due
process. It is intended to be an
uncharged hearing by one’s peers to render a resolution of conflict without
resorting to a legal process. This
Committee is recommending is that there should be a committee formed by the
Senate to explore this process. It
should involve individuals with experience and they should draw up procedural
guidelines for these hearings. The
Faculty Handbook would mention that there are guidelines in existence, but they
would not be a part of the handbook.
There
was some concern about members of the grievance committee being appropriately
elected. The Committee feels that they
should remind the Deans that these members are to be elected and not appointed.
There
are also concerns about confidentiality, but these are hard to track because of
the confidential nature of the process.
There are concerns that too many of these reports have gone from the
Hearing Committee to the President, but are not supported at that level. This has caused a lack of confidence in the
process. It is also very difficult to
track. Often there is more than one
recommendation. One part may be
supported while another is not, so it is not just a yes or no decision. The Committee recommends that there should
be some report made by the President explaining why he did or did not support
each case. These are not just concerns
with the present administration; these concerns have been present for many
years.
Lastly,
there is concern that the President uses different criteria than that of the
Hearing Committee. All of the evidence
is presented to the Hearing Committee.
The President does not hear all these lengthy proceedings, so it is not
surprising that he may have a different view without hearing all sides of a
case. There is a recommendation that
states that the President or the Provost should review all tapes before making
a final decision if he cannot initially support the recommendations of the
Hearing Committee.
Faculty Grievance ad hoc
committee report - Gary Mullen
Questions:
Thad
Roppel (Electrical and Computer Engineering):
Do you have a sense of the scale of the problem (referring to the number
of faculty grievances filed each year)?
Gary
Mullen: No records have been kept. There have not been dozens or hundreds of
cases. Only a small number of reported
cases are sent to the Hearing Committee from the Grievance Committee. If you count the ones that have gone through
the full process, there probably have been between 6 and 12 cases per
year. If you count the ones that were
not followed through, the number would be higher. From here on out, we will have a report that will provide those
specific numbers.
Glen
Howze (Ag Economics & Rural Sociology):
Dr. Howze is not a voting member.
Concerning your recommendation to have a committee set up procedure
guidelines, if such a committee makes guidelines, it would become more of a
legal process. He feels that it should
be considered very carefully before making any change.
Gary
Mullen: The Committee has discussed
this and they are not suggesting that the grievance procedure become like “due
process”. That would be up to the
special committee as to what would be appropriate guidelines. There are some things that the Chair would
have done differently if he could have anticipated the problem. They may be very generic guidelines, and the
committee should be made up of previous
members of the Hearing Committee.
Steve
Knowlton (Physics): What is the
magnitude of the problem of overturns of decisions by the President?
Gary
Mullen: He can only speak for the year
he was on this committee since there are no records. He has heard terms like “a number” and “more than half” when
referring to overturns, but he has no hard numbers. He does know overturns have happened enough that Chairs have
refused to serve again on the committee.
It has been raised often enough that it needs to be addressed.
Bruce
Gladden (Chair): There will be no
action on this item today. The
information will go to the Rules committee, then the Steering committee and
then back to the Senate for action later.
C. Guidelines for Academic Program Review –
Summary of Recommendations: Dr. Mike
Watkins
This
is not a voting topic today. The Program
review committee has begun to evaluate the process of program review. The feeling was that the process needed to
be rational and that programs needed to be evaluated both in terms of
quantitative guidelines as well as qualitative guidelines. This meant that outside experts would be
needed in the review process. The
committee has begun to look at what Drew Clark’s committee drafted last
year. Last year, the focus of the
committee was to look at the programs that did not meet viability standards.
The
guidelines last year were made after reviewing other institutions. The procedure of setting up guidelines is
going to be a difficult task. In view
of the other added responsibilities the committee has taken on recently, they
have not had time to proceed as quickly as they would like. In addition to the weekly meetings of the
Committee, Dr. Watkins met weekly with Cindy Brunner and Jack Rogers in order
to discuss the recommendations. The
first page and a half summarize the intentions of the committee.
Each
program should be internally reviewed every five years. Two Auburn University faculty members and
three from another institution should also conduct an external review every ten
years. The reports from both Committees
along with responses from members of the program would go before the Program
Review Committee. The Program Review
Committee would then make recommendations to the Provost.
Program Review Report
II - Mike Watkins
Informational
Items:
A.
Alumni and Development: Vice-President
Betty DeMent and Assistant Vice-President Wil Miller
Betty
DeMent: Dr. Wilner is passing out organizational charts so that you can get a
good understanding of where the Alumni office fits into the structure of the
University. We have 213,432 alumni and
friends in our database; a lot of people to make happy and pleased with the
University. The mission of the Office
of Alumni and Development is to promote, enhance, and develop support for AU by
strengthening the relationship between the institution, its alumni, friends,
and constituencies.
VP
DeMent answers directly to Don Large.
The overall structure of the Office of Alumni and Development consists
of 2 parts (functional and supportive) which each have 2 subunits. Two functional units include Alumni Affairs
and Development. Alumni Affairs
coordinate programs for the Alumni Association. Development is the fundraising side and is coordinated with the
Foundation. Two support units include
IMS (database management) and Accounting.
The state, Auburn Alumni Association, and AU Foundation fund the
office. All of the employees are AU
employees. VP DeMent is an Auburn
employee, but is also the Treasurer of the Alumni Board of Directors as well as
the Foundation Board of Directors.
The
Auburn Alumni Association was in operation in the 1800’s, but it was
incorporated in 1945 and the AUF was formed in 1960 as 501(C)(3) nonprofit
organizations. The Foundation separates
private dollars and state dollars. The
dollars can be restricted by the donor to a specific organization or to the
University as a whole. Dr. Large and
Dr. Muse serve on both Boards as well as VP DeMent. Vice-President DeMent
encouraged the faculty to send her office ideas for new programs if they know
of ones from their Alma Mater.
AAA
Programs – Their function is to involve and inform Alumni and Friends. The membership organization has about a 35%
participation rate. The AAA supports
academics directly through a number of student and faculty support programs
including funding for: 21 Alumni
Scholarships, 25 Alumni Professorships, 6 Undergraduate Teaching Excellence
Awards, Distinguished Graduate Faculty lecturer, Outstanding Achievement for
Minorities Award, Alumni Extension Awards, Sigma Xi Alumni Research Award, and
other AU Employee awards.
The
Auburn Collegiate Vanity Tag Program is administered and promoted through the
Alumni Office and brought in more than $1 million for scholarships during the
year. That topped the $8million mark in
total revenues since its introduction in 1988.
The
Auburn Club Program consists of 123 clubs across the United States. Representatives from campus are sent to each
of those clubs. More than 300 AU Club
meetings were held across the country.
Featured speakers were from Alumni and Development; 90% included
representatives from both academics and athletics. AU Clubs provided $200,000 in new money for academic scholarships
last year.
Auburn
Parents’ Association – It was founded in 1992 to help keep parents in touch
with Auburn and their childrens’ education process. Current membership is 1,350 families. The President of this association serves on the National Alumni
Board of Directors.
Reunion
Program – The Golden Eagles Reunion are those who graduated fifty or more years
ago. There is also a reunion
homecoming. This year the 50’s decade
will be celebrated.
Auburn
Student Alumni Association – This group formed its student board and launched its
first membership drive last fall. It
has already signed up more than 600 members.
The President of the Student Alumni Association serves on the National
Alumni Board so that there is communication between students and alumni.
Tour Program – The War Eagle Travelers is a program of 10 to 12 tours a year whereby alumni travel and study together. President Muse is currently hosting our Alumni College Tour to Greece.
Auburn
Magazine – This magazine is produced quarterly for members of the AAA. It is a two-time winner in the Council for
the Advancement and Support of Education (CASE) District III Awards
program. The magazine has 13 regional
and national awards since its launch in 1994.
AUF
Functions and Purpose - Established in 1960 to keep private funds separate from
state funds. The AUF receives, records,
reports, and distributes gifts for benefit of AU – restricted or
unrestricted. Development is an
everyday process; campaigns put the spotlight on Development. There are many people who have found new
money in the stock market. Since it is
new found wealth, they are not as inclined to give up that money. So, relationship building is a big part of
fundraising.
You
as a faculty member play a major role in the success of Development. Your impact and interactions with your
students greatly affect their desire to give back to their institution. If a donor has given to Auburn, many times
it is because of the impact of a faculty member.
The
Alumni office is not responsible for how the money is spent. The Dean of each college and school sets its
priorities in conjunction with faculty, the President, and the Provost. The Alumni office is responsible for
coordinating that process.
Wil
Miller: We function as a
constituency-based model. Schools, Colleges
and the Athletic Department are constituencies. Each constituency has their own Development Officer. They work with the Deans and the Athletic
Director and are housed in the Alumni Center.
In addition, the University has two Development Officers for University
wide interests such as the library, honors program, and other campus-wide
programs.
There
are also specialists in the Alumni office that help donors with planned
gifts. Planned gifts are such things as
last will and testaments, trusts, annuities, and life insurance
beneficiaries.
The
Process is tied into the Strategic Planning process for the institution. Each constituency area has a Strategic Plan
for Development where priorities are set from the Strategic Plan for that unit. Most units have a Development Committee made
up of alumni that are involved in that unit’s advisory counsel. The Development Officers interact on a
periodic basis with those Development Committees. Deans decide the priorities for funding in their respective schools/colleges
based on their Strategic Plans. The
Office of Alumni and Development then implements the seeking of gifts/private
monies for those priorities.
There
are 4 functions of Alumni and Development:
1. Identification – Identify individuals, corporations,
Foundations, etc. that have interest and access to money to donate to Auburn.
2. Cultivate – Build a relationship with those
identified is number one. In this role,
not only the Development Officer, but also the Dean, Department Chairs, Alumni
Chairs are all involved in the cultivation process.
3. Solicitation – This is the “ask,” or
matching the donor’s interest and ability to give with what the University
needs. This is not only the donor’s
ability and interest in donating, but their inclination and personal ability
(family, etc.) to make that gift. So
the Development Officer, the Dean, and/or the President, and/or the Provost
might be involved in that solicitation process.
4. Stewardship – These are methods of saying
thanks. This includes donor recognition
events, letters, etc. We never want to
forget our donors. Some of the best
donors are previous donors. We are always
in their debt.
Restricted
Funds make up greater than 90% of the gifts.
These are often directed toward scholarships, Faculty awards,
Professorships, or a Fund for Excellence.
Unrestricted Funds are fewer and they may be directed at the University
or at a specific College or School.
The Dean or President can then decide how to use that gift.
Most
gifts are in the form of endowments and will usually be used for scholarships,
professorships, or a lecture series. An
endowment is a fund that must be invested, and only the income from these funds
can be spent. The minimum for an
endowment is $25,000. Some of the
endowment money may be for immediate use such as scholarship money.
Planned
giving includes Trusts, Wills, and Annuities.
They are deferred funds and it may take years to see an impact. Some campaign dollars are deferred and may
not come to Auburn for twenty or thirty years.
There
are gifts in terms of use for a specific College or program. There also property gifts. Donors may receive a tax deduction from this
type of gift.
The
Treasurer’s office has developed a model for determining how much of the
endowment interest is allocated. This
decision is made annually. The
endowment model is based upon a multi-year average of income and the
distribution of that is based on a specific point in time, like a
snapshot. At one point in time, the
Treasurer’s office can say what the figure is at this time last year. The particular model is to show that this
process is done systematically and also to answer questions that donors ask. Sometimes donors confuse what is allocated
with what is made from the endowment.
A
14-year total return would gross a total return of 12.27%. Institutional inflation rate refers to
tuition costs and higher education costs.
The administrative fee of 1.0% supports Development. The calculated spending rate = Net Total
Return – Institutional Inflation Rate – Administrative Fees.
In
accordance with the Auburn University Foundation Spending Plan, we are proposing
that the annual review of the target spending rate be based on the following
calculations:
Total
Return is the 14-year performance of the endowment pool, as measured by the
Smith Barney Consulting Group, less investment manager and investment advisory
fees.
Institutional
Inflation Rate is determined by using a 14-year composite of the average
tuition increases, faculty salary increases, and Consumer Price Indexes. A long-term average is used to provide a
more stable inflation rate.
Administrative
Fee is based on a percentage of the market value of the endowment pool. This fee is used to fund the administration
of the Foundation’s development activities.
For
the Fiscal Year 2000 distribution the spending rate calculation would be as
follows:
14 Year Total Return = 11.86%
Calculated as follows:
Gross Total
Return 12.27%
Less:
Investment manager fees 0.30 Scudder/Neuberger
Custodial fees 0.02 Regions
Investment trading and
consulting fees
0.09 Smith Barney
Net Total Return 11.86%
Institutional Inflation Rate =
5.8%
Administrative Fee = 1.00%
Calculation
of Spending Rate for FY00
11.86 – 5.80 – 1.00 = 5.06
The meeting was adjourned at 5:05 p.m.