Agenda Item: 6B Board of Trustees June 20, 2006 Issue: DSO Budgets Proposed action: Review Background information: Budgets for UNF’s three Direct Support Organizations, the University of North Florida’s Financing Corporation, the Training and At a prior Finance and Audit Committee meeting, members of the committee requested periodic reviews of DSO budgets. Both TSI and the Foundation have approved new budgets over the past two months. These budgets were presented to the Finance and Audit Committee. These budgets are now being presented to the full Board for review. Attachments: • Foundation Budget • TSI Budget UNIVERSITY OF NORTH FLORIDA FOUNDATION, INC. FY 2007 APPROVED BUDGETS The FY 2007 Foundation budgets were approved at the UNF Foundation Board Meeting on June 7, 2006. Increase/(Decrease) FY 2005-2006 FY 2006-2007 REVENUE Approved Budgets Approved Budgets Amount Percent Beginning Cash on Deposit (Reserves) $ 529,656 $ 500,000 * REVENUE Contributions (Cash) $ 240,000 $ 275,000 $ 35,000 15% Contributions (Non-Cash, Other) - - - - Contributions (Non-Cash, Securities) - - - - Management Fee from Endowment 812,500 937,500 125,000 15% Investment Earnings - Non-Endowed Trust ** 300,000 367,500 67,500 23% Total Revenue $ 1,352,500 $ 1,580,000 $ 227,500 17% EXPENDITURES - Recurring Institutional Advancement - Vice President's Office $ 33,218 $ 34,215 $ 997 3% Donor Recognition - Cultivation 25,600 40,600 15,000 59% Development Salaries 223,911 242,000 18,089 8% Development Expenses 82,969 88,969 6,000 7% Presidential Emoluments, Salary and Fringe Benefits 109,000 124,000 15,000 14% President's Discretionary 26,525 31,525 5,000 19% UNF Board of Trustees - Operating 9,300 19,300 10,000 108% Governmental Affairs 13,725 14,137 412 3% Academic Programs - Faculty & Staff Recognition 24,500 24,500 - 0% Foundation Board Operations, Reports 24,550 26,287 1,737 7% Advancements Services 26,880 31,880 5,000 19% Foundation Accounting 387,245 422,245 35,000 9% Presidential Lecture Series 55,000 55,000 - 0% Board Initiatives 55,000 60,000 5,000 9% Investment Management/Consultant Fee 50,000 - (50,000) -100% Academic Scholarships 107,000 122,000 15,000 14% Alumni Relations 51,984 53,544 1,560 3% Total Expenditures - Recurring $ 1,306,407 $ 1,390,202 $ 83,795 6% EXPENDITURES - Non-Recurring Campaign Fund Reserves $ 150,000 $ 125,000 $ (25,000) -17% Investment Management/Consultant Fee 20,000 - (20,000) -100% Presidential Incidental Reserves 25,000 30,000 5,000 20% Total Expenditures - Non-Recurring $ 195,000 $ 155,000 $ (40,000) -21% Total Expenditures $ 1,501,407 $ 1,545,202 $ 43,795 3% Total Revenue Over(Under) Expenditures $ (148,907) $ 34,798 Ending Cash on Deposit (Reserves) $ 380,749 *** $ 534,798 * Estimated Beginning Cash on Deposit ** The Non-endowed investment earnings are reinvested and are available upon request. *** Revenue is projected to be higher than budget and expenditures are projected to be lower than budget, therefore, Ending Cash on Deposit is estimated to be $500,000. PROPOSED UNRESTRICTED OPERATING BUDGET JULY 1, 2006 THROUGH JUNE 30, 2007 UNIVERSITY OF NORTH FLORIDA FOUNDATION, INC. Current Year Proposed Proposed FY 2006 Change FY 2007 RECURRING EXPENDITURES I. FOUNDATION/INSTITUTIONAL ADVANCEMENT OPERATIONS INSTITUTIONAL ADVANCEMENT OPERATING (0151-3001-11) $33,218 $997 $34,215 3% Account has two purposes: 1) Expenses for travel, donor cultivation, searches for staff positions, and special project funding which can be accomplished only with private support ($22,000). 2) Emoluments for Institutional Advancement Vice President/Executive Director which include car, club membership and dues/ expenses related to several key civic organizations ($12,215). (Increases in activities and operating expenses.) DONOR RECOGNITION AND CULTIVATION (0158-3008-11) $25,600 $15,000 $40,600 59% The Foundation recognizes the importance of awards and acknowledgements for those who have assisted the University. Areas of support include incentive gifts, newly implemented donor recognition gift clubs, receptions prior to cultural or athletic events, representation at community events and special fund-raising projects which cannot be supported with state revenue. Increases in activities and operating expenses for six new events ($12,000), funds for media relations ($1,500) and scholarship stewardship ($1,500). DEVELOPMENT (0160-3010-11) $306,880 $24,089 $330,969 8% Account has two purposes: 1) Support for major gifts, annual giving, constituent programs and planned giving and corporate and foundation relations development activities. Numerous expenditures are incurred in connection with fund-raising activities such as stationery, duplicating, telephone (including mobile phones), charges in support of special events, part-time student labor, travel for development officers involved in major gifts fund-raising and professional education ($88,969). 2) Salaries and benefits for two .5 FTE college development officers and one 1 FTE manager ($242,000). (Increase of $6,000 for fundraising operating expenses ($1,000 AG, $4,000 CP and $1,000 PG) PRESIDENTIAL EMOLUMENTS (0169-3019-11) $109,000 $15,000 $124,000 14% The University Board of Trustees has requested and approved a total presidential compensation plan including auto lease and expenses, salary supplement , annual physical and club and civic memberships. (Estimated increase in emoluments by BOT in Fall 2006 after annual review.) PROPOSED UNRESTRICTED OPERATING BUDGET JULY 1, 2006 THROUGH JUNE 30, 2007 UNIVERSITY OF NORTH FLORIDA FOUNDATION, INC. Current Year Proposed Proposed FY 2006 Change FY 2007 PRESIDENT'S DISCRETIONARY (0168-3018-11) $26,525 $5,000 $31,525 19% The Foundation endorses the President's active participation in the entertainment of propsective donors and the continued stewardship of past past donors, and recognizes that this leadership role will enhance the overall assets of the Foundation. (Increase in activities and expenses.) BOARD OF TRUSTEES OPERATING (0163-3013-11) $9,300 $10,000 $19,300 108% UNF Board of Trustees operating fund for meetings and other business related to UNF. (Increase for assessment by Board of Governors.) GOVERNMENTAL AFFAIRS (0167-3017-11) $13,725 $412 $14,137 3% Assist the University in promoting its mission of teaching, research and public service at all levels of government. The Director of Governmental Affairs monitors activities on legislation in Jacksonville, Tallahassee and Washington. (Increase in activities and travel expenses.) FACULTY/STAFF RECOGNITION & AWARDS (0161-3011-11) $24,500 $0 $24,500 0% The Foundation sponsors cash awards for the distinguished professor for teaching excellence, outstanding research faculty, outstanding service faculty, employee of the year awards and employee recognition. Also sponsors a faculty or staff member for Leadership Jacksonville. (No increase.) FOUNDATION BOARD OPERATING (0159-3009-11) $24,550 $1,737 $26,287 7% Annual expenses for operations of the Foundation such as stationery, office supplies, Board packets, committee meetings and quarterly meetings. Reports to be distributed each year include UNF Foundation Annual Report and Endowment Report. (Increase for operating expenses ($737) and Committee on Directors ($1,000).) PROPOSED UNRESTRICTED OPERATING BUDGET JULY 1, 2006 THROUGH JUNE 30, 2007 UNIVERSITY OF NORTH FLORIDA FOUNDATION, INC. Current Year Proposed Proposed FY 2006 Change FY 2007 ADVANCEMENT SERVICES (0152-3002-11) $26,880 $5,000 $31,880 19% Department within the Division of Institutional Advancement manages the donor database to insure accuracy of alumni and friends addresses and other information. Advancement Services also processes donor gifts, prepares acknowledgement letters, compiles donor gift histories, prepares and disseminates a variety of weekly, monthly and quarterly management reports and oversees research function. (Increase for operating expenses in the area of research databases as well as increases for gift acknowledgement activities.) AUDIT AND FINANCIAL SERVICES (0156-3006-11) $387,245 $35,000 $422,245 9% Account has two purposes: 1) Foundation Accounting provides services necessary in areas of accounting and reporting, investments, including pooled investments, sales and unrelated business income tax filings, nonresident alien visa transactions and other tasks necessary to assure compliance with donor gift agreements and exercise of the Foundation's fiduciary responsibility, and salaries and benefits ($372,991), 2) Audit expense ($49,254). (Increase for payroll and audit expenses.) ALUMNI RELATIONS (0153-3003-11) $51,984 $1,560 $53,544 3% The Foundation supports activities of the National Alumni Association including special events and projects, alumni recognition, recruitment efforts and Student Alumni Association. (Increase in travel and operating expenses.) INVESTMENT MANAGEMENT CONSULTANT FEES (0166-3016-11) $50,000 ($50,000) $0 -100% The Foundation utilizes the services of an investment consulting firm for advice on the portfolio of endowed funds and non-endowed accounts. (Line item no longer necessary because of restructuring of how the endowment is managed.) SUBTOTAL FOUNDATION/INSTITUTIONAL ADVANCEMENT OPERATIONS $1,089,407 $63,796 $1,153,203 6% PROPOSED UNRESTRICTED OPERATING BUDGET JULY 1, 2006 THROUGH JUNE 30, 2007 UNIVERSITY OF NORTH FLORIDA FOUNDATION, INC. Current Year Proposed Proposed FY 2006 Change FY 2007 II. BOARD SUPPORTED ACTIVITIES PRESIDENTIAL LECTURE SERIES (0170-3020-11) $55,000 $0 $55,000 0% The Foundation will help underwrite one or two lectures