Grading Garibaldi

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Grading Garibaldi

A
1
7%
B
6
43%
C
2
14%
D
3
21%
F
2
14%
 
Total votes : 14

Re: Grading Garibaldi

Postby Tacitus651 » Sun Mar 19, 2017 12:01 pm

I agree, Bob! Just proves my point that in order to survive, a school like UDM would need a MUCH larger endowment than 1B in 50 years to operate. Hell, SLU has a 1B endowment today and they're laying people off this semester. Mac is living in a world without inflation and where he can go to the Soda Shop and get a milkshake for a shiny nickel. LMAO.
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Re: Grading Garibaldi

Postby R.B.J1 » Sun Mar 19, 2017 12:14 pm

Rogobob77 wrote:
Tacitus651 wrote:
titanmac wrote:in fifty years, using simple math, if we conserve and shepherd the endowment judiciously, conservatively it will be in the neighborhood of a billion. enough to ensure our future. (actually much higher than that but i am throwing a bone to the nay sayers who are getting ready to pounce.....)


This made me laugh out loud. Don't know where you get your math but if you take $50M over fifty years with a 5% rate of return you'd have under $600M. And that's assuming you're NOT spending ANY of the endowment spinoff during those 50 years, which we are legally required to do. No offense, but I'm not sure you understand how endowments work.

If you plug in 7% average return you'd certainly be in 1B territory. But again, I doubt you'd get 7% return on top of the 4% spin off you're required to spend. Endowed dollars are meant to provide for support for their stated purpose in perpetuity. That means you spend part of the earned interest and try to keep up with inflation if you're lucky. Also, the truth is that in 50 years 1B will not be considered a large university endowment would not ensure any future.

This article suggests that in a mere 18 years, four years of college at a private university like a Detroit Mercy could cost around a half million dollars. If college tuition continues to creep even just a bit higher than the general inflation rate, something is going to have to give as eventually the non-elite private institutions become completely unaffordable. Last week, Garabaldi announced a 3.2% tuition increase for undergrads, lowest hike in 18 years. In addition to fundraising and increasing the endowment, a big part of the University President's task is to keep the rate of tuition increases as low as possible:

https://techfeatured.com/8550/in-18-yea ... out-500000


I've asked this question on the board before, and was immediately shot down. If these stats are true, what are the chances that UDM abandons its religious affiliation and becomes a state supported university. Someone mentioned before that the University of Pittsburgh was a private institution and became a "state related" institution in the 60's. Maybe UDM could pursue something like this.
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Re: Grading Garibaldi

Postby Rogobob77 » Sun Mar 19, 2017 12:25 pm

I don't think state systems are likely to absorb private schools that go belly-up, they will just shut down. The government already finances three large four-year universities in the Detroit metro area: Wayne State, Oakland, and UM-Dearborn. They don't have the money or inclination to fund more colleges in today's financial-political environment. Trump wants to eliminate the Department of Education, and the state of Michigan doesn't have the money to fix potholes.
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Re: Grading Garibaldi

Postby titanmac » Sun Mar 19, 2017 12:40 pm

we went through this before tact. not going through it again after this. you may think you know all there is to know, but the standard investment rules still apply. the general conceptual basis for finance is easy enough for anyone to figure out on their fingers. don't even need your toes. at 6% money doubles in ten years that's five doubles. get over it. sometimes you get lost in the trees. knowing the trees is good. getting lost in them is the bane of all bureaucrats.
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Re: Grading Garibaldi

Postby Tacitus651 » Sun Mar 19, 2017 12:47 pm

I second. No way Michigan could afford or want to absorb private schools, especially ones on the brink. My guess is that many catholic schools close down. I think some might restructure and find ways to operate by focusing on what they do best. I could imagine many catholic schools in 50 years only offer nursing and education degrees. These are degrees that many students get in a transactional sense. Many of them don't live on campus, and aren't seeking a traditional college experience. A college could offer these degrees and adjunct out all the general ed requirements cheaply. Plus, these degrees might be immune from online education replacing them.
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Re: Grading Garibaldi

Postby Rogobob77 » Sun Mar 19, 2017 12:51 pm

Yes, the endowment can double in ten years. But if tuition goes up by the same or higher rate, operating budget is doubling every ten years too. You're treading water, in actuallity not really making progress.
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Re: Grading Garibaldi

Postby Rogobob77 » Sun Mar 19, 2017 1:00 pm

In one sense, the old Mercy College lives on as part of the consolidated UDM. In another sense, it's been eliminated, the campus on Outer Drive sold for pennies on the dollar and now operating as part of the Wayne County Community College system.
Last edited by Rogobob77 on Sun Mar 19, 2017 1:16 pm, edited 1 time in total.
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Re: Grading Garibaldi

Postby titanmac » Sun Mar 19, 2017 1:16 pm

ummm. not sure how you would calculate "pennies on the dollar?" book value? depreciated value? market value? tax considerations aside, i'm guessing it sold for what it was worth? besides, all that has nothing to do with our current financial position? water over the damn so to speak. we have fifty million in principal. we are correct in criticizing decisions that stray from the financial model to the detriment of the accumulation and growth of that principal.
Last edited by titanmac on Sun Mar 19, 2017 1:33 pm, edited 1 time in total.
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Re: Grading Garibaldi

Postby Rogobob77 » Sun Mar 19, 2017 1:20 pm

Cost us $15 million just to build the new dental school on that campus. A few years later we turn around and sell the ENTIRE campus for about $15 million to WCCC. I would argue we got pennies on the dollar.
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Re: Grading Garibaldi

Postby titanmac » Sun Mar 19, 2017 1:30 pm

not questioning the poor quality of past decision making. like i said: damn!
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Re: Grading Garibaldi

Postby titanmac » Sun Mar 19, 2017 1:36 pm

the new dental school campus is nice tho.
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Re: Grading Garibaldi

Postby Rogobob77 » Sun Mar 19, 2017 2:04 pm

titanmac wrote:the new dental school campus is nice tho.

If it makes you feel better, we bought the former hospital building that now houses Detroit Mercy Dental for pennies on the dollar.

In 20/20 hindsight, should have closed down and sold the Outer Drive campus when the schools consolidated, and built the new dental school on the McNichols campus, perhaps where Brent Hospital used to be located.
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Re: Grading Garibaldi

Postby titanmac » Sun Mar 19, 2017 5:22 pm

if my memory serves there was talk about doing that at one time or another? caved in on itself i suppose?
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Re: Grading Garibaldi

Postby Dick Vitale » Sun Mar 19, 2017 8:47 pm

There's some serious issues with the cost of instruction and enrollment as well as fund raising.

I heard the recent accreditation team brought it to the president's attention saying the 9:1 ratios were too low and financially risky. I've yet to hear of any changes in faculty levels - even in under performing areas. No significant change in enrollment either and from what I have heard, they are discounting the tuition so much just to keep the class size stable with past years but - they are spinning their costs out of control.

The lack of response from the leadership in these areas is concerning. I would grade low at this time.

Now, if they said they were offsetting all of this with record unrestricted donations that would help the pain but that doesn't seem to be the case. They reported 4.5M in funds raised last year. I would guess they spent 4.5M in trying to get that 4.5M.

Can this be turned around? I hope so. Someone needs to make some difficult decisions and soon.
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Re: Grading Garibaldi

Postby Dick Vitale » Sun Mar 19, 2017 8:50 pm

The Mercy's brought needed cash to the table.

The Dental School is a money maker.

Barking up the wrong tree - fill some seats in Calihan and let's get the Athletic department operating in the black.

Fill some seats in the classrooms and let's get other programs in the black.

The recent expansion of the PA program seems like that should be a cash positive move. I hadn't heard they added faculty but are in a position to take on more students now.
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Re: Grading Garibaldi

Postby MooseGuy1 » Sun Mar 19, 2017 9:06 pm

Dick Vitale wrote:There's some serious issues with the cost of instruction and enrollment as well as fund raising.

I heard the recent accreditation team brought it to the president's attention saying the 9:1 ratios were too low and financially risky. I've yet to hear of any changes in faculty levels - even in under performing areas. No significant change in enrollment either and from what I have heard, they are discounting the tuition so much just to keep the class size stable with past years but - they are spinning their costs out of control.

The lack of response from the leadership in these areas is concerning. I would grade low at this time.

Now, if they said they were offsetting all of this with record unrestricted donations that would help the pain but that doesn't seem to be the case. They reported 4.5M in funds raised last year. I would guess they spent 4.5M in trying to get that 4.5M.

Can this be turned around? I hope so. Someone needs to make some difficult decisions and soon.


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Re: Grading Garibaldi

Postby Rogobob77 » Sun Mar 19, 2017 9:27 pm

Dick Vitale wrote:There's some serious issues with the cost of instruction and enrollment as well as fund raising.

I heard the recent accreditation team brought it to the president's attention saying the 9:1 ratios were too low and financially risky. I've yet to hear of any changes in faculty levels - even in under performing areas. No significant change in enrollment either and from what I have heard, they are discounting the tuition so much just to keep the class size stable with past years but - they are spinning their costs out of control.

The lack of response from the leadership in these areas is concerning. I would grade low at this time.

Now, if they said they were offsetting all of this with record unrestricted donations that would help the pain but that doesn't seem to be the case. They reported 4.5M in funds raised last year. I would guess they spent 4.5M in trying to get that 4.5M.

Can this be turned around? I hope so. Someone needs to make some difficult decisions and soon.

Seventeen staff are assigned to development/advancement functions based on info at link: http://www.udmercy.edu/about/giving/contact-us.php. I would make a very rough guess that their salaries, benefits and administrative expenses might aggregate to a couple million dollars. Other positions like the University president, the AD, college deans, etc., also assist with fund raising.
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Re: Grading Garibaldi

Postby Tacitus651 » Sun Mar 19, 2017 10:19 pm

The best way to value a development office would be cents to raise a dollar. That stat is usually self reported, so you can only take it so seriously. My school costs 11 cents to raise a dollar which is considered very good.

Catherine McAuley once wrote, "There is little good that can be done, or evil avoided, without the aid of money." I have that quote framed in my office as a reminder of an example of greatness. Say what you want about the order as a whole, but she was truly one of the greatest women to ever live. Sure wish a leader like her would come around again.
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Re: Grading Garibaldi

Postby NC Titan » Sun Mar 19, 2017 11:16 pm

The published fundraising number in 2014 was $8.7 million. I think the number for last year was $12 million to $13 million. And that is donations. It doesn't count major investments like NIH grant to expand biomedical education to underserved students or the federal grant for cybersecurity.

Endowment at the end of 2011 was $26 million. At the end of 2014 it was $41 million; it's above $50 million now. That's the right trajectory.

Yes, the school is expensive, but not as high as many other Jesuit schools. And 92% of the students receive financial aid -- more than $50 million total -- so it's more affordable than the quoted price. Student-faculty ratio was 13:1 in 2014.

The freshman class numbers: 2014 -- 469; 2015 -- 516; 2016 -- 530. So enrollment is going up. Dental school expanded to grow from 96 to 144. Not only do those student play high tuition, but that growing group of high-earning alumni bodes better for future fundraising.

Anyone who has visited the campus lately has seen the capital improvements, and more are planned as the capital campaign continues.

The comments below about fundraising budget miss one big thing. Let's say UDM spent $2 million (Rogo's estimate) to raise $12 million. If so, then maybe we should have spent $4 million -- and raised $25 million. On the other hand, we could have gotten rid of those 17 employees -- and brought in a few hundred thousand dollars. As long as the income is a multiple of the expense, then raising the expense will mean more income. Fund-raising shouldn't be viewed as an expense, but as an investment.
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Re: Grading Garibaldi

Postby TitanVoiceofReason » Sun Mar 19, 2017 11:58 pm

Getting rid of the 17 employees may not be the right answer. Getting them to be more productive may be a better approach. About 10 years ago I was on our parish council and we were looking for ways to raise more money in order to keep the parish grade school opened. Some one from U of D High talked to us on how they operate their program. I thought he said the high school had 2-4 full time employees devoted to fund raising. If a high school has 2-4 then 17 for a university doesn't seem out of the ordinary.
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