And now, a word from the prezFinance is always an issue with college students; however, recently, the Calvin student body seems particularly caught up in financial worries. The economy is down. Tuition has been raised. Our campus is rapidly developing and, amidst all this, the student body has been asked to donate money to the college. Of course, the college has its reasons for this, but what exactly are they? To answer any potential questions the student body might have, Chimes reporter Casey Nagel is conducting a series of interviews with Calvin administrative figures. This interview with President Byker is the first in this series. The president is the “big picture” guy. As a result, this initial interview discusses larger spending issues. How are donations secured? How are donations spent? What does Calvin plan to spend money on in the future? If these questions do not address your personal inquiries, please let us know. Send us your questions. President Byker has offered to answer follow-up questions and there are many more administrative figures yet to interview. Nagel: What role do you play in securing Calvin donations? Byker: The president gets involved in setting the policies and strategies for fundraising and hiring the top personnel for fundraising. And the president also usually gets involved in most of the major donor cultivation and asks for the donation. N: How do you search for new donors? B: That’s a long process. For example, for the athletic complex and fitness center, the shortest time we worked on any of those six major gifts was about six years. We tried to involve many people over that time. So you build relationships; you go to lots of events; you invite people to come to Calvin; you go visit them; you develop an understanding of their interests and passions. You never get a major gift from somebody that has no connection to the college. You have to have someone who is either an alum or an existing donor. And then you have to find ways of connecting them with the strategic projects of the college. N: Do you present donors with plans or do donors come to you with their ideas? B: Usually the donor, the president and the development staff talk about projects and opportunities that are already in the college’s strategic plan. So what we do is we take a strategic plan. Each of these plans goes through a major, campus-wide process. It takes a year to pull one of these together. It was out of these plans that the current campaign strategies were developed. N: Then you propose these plans to donors. B: That is correct. For example, we have almost a thousand named scholarships now. And we have a big dinner every year where we invite all of the donors and most of them come. And the students that get those scholarships that year come. That’s usually a great time to talk to the donors about increasing the scholarship endowment. The way endowment works is that we invest those donations and we spend 6 percent a year. We have currently $100 million in the endowment which, for a college as big as Calvin, is pretty modest. Some of the other schools spend less, 5 percent or 4.5 percent, but the�€�rule usually is you have to spend 6 percent per year on the endowment. About half of the $100 million endowment goes to scholarships and financial aid, about 30 percent is in faculty research and writing and academic chairs and institutes. About 10 percent is for special programs and about 10 percent is for maintenance. That is a very broad brush of what we currently use the endowment for. You will see that those things all fit with what the campaign goals are,�€�so there are specific items in each of those categories that we are raising money for. Plus we don’t use any tuition money to build buildings. So we use this fundraising as a way of building buildings and raising the endowment. N: Can a donor propose changes or influence a strategic plan? B: They may propose things but it doesn’t happen very often. They may propose and we may say “yes” if it fits, or we just say “that doesn’t fit.” Generally speaking, we show them a campaign brochure or the strategic plan and say here is what we are working on. But normally for major donors that is not an issue because we have worked with them for years. We know what they’re interested in and they know what we need. So we try to figure out ways to fit together with their interests and with what we need. Almost everybody who wants to support the college has something in there that would fit.�€� N: What is the Calvin master plan? B: I would say we are working with three sorts of plans that you might call master plans. One is a “campus master plan.” That shows all the buildings that we now have and all the ones we would like to have. That was developed about 12 years ago. About every 10, 12, 15 years or so we redo this plan. So on that plan was the addition to the Science Building, the addition of the conference center. Someday there may be a performing arts center here. Someday there may be another wing on the conference center. Someday there may be more housing. N: Can students influence this “master plan”? B: Students have usually been in the discussion process, and I’ve met students on the planning committee when we did the master plan. And the Student Life division really is also involved in all of these; they have a lot of input from students. So, for example, we’re designing the new Commons and the new eating arrangements. Students have been involved in focus groups and in discussion sessions and priority setting. At every step there have been students involved.�€� N: How does the endowment grow? B: The endowment grows two ways; one is to get additional gifts. We have now raised about $15 million during this campaign for additional scholarships. It also grows by investment income that is over and above the spending rule. So that money goes in there. The last few years we have had very good investment years. I think this past year the endowment made 13 percent. So we will spend 6 percent this coming year, and 7 percent we will put back in the growing endowment. N: So you have to spend 6 percent? �€�B: Yes, by law. And if you have a well-managed and well-run campus then it attracts more donors and the investment grows larger and if it grows larger than 6% you can make money that way. So there are two ways: one, we get additional gifts, and the other is we make sufficient earnings on that endowment with our investments, stocks and bonds and so on ... we invest in some businesses. If we make more then 6 percent we put the money back into the endowment and it grows that way. N: Does tuition payment contribute to the endowment? B: No. N: Can the students influence Calvin’s spending? B: Yes, by participating in the process they certainly can. The Commons is a good example of the students being involved in how that money is spent. Students have also gotten involved with making financial aid and scholarships a top priority in the endowment, which it has been for a long time.�€� N: Now if a donor sees that 70 percent of the student body donated to Calvin, they might interpret that to mean that the school is well-managed and that fact might convince them to donate to Calvin themselves. So it’s not about how much the students give but about the very fact that they gave. B: That’s right. And there are two things that I think are very important. One is the fact that they gave. The other is that they got in the habit of thinking of Calvin as a priority of their stewardship giving. You never get a major gift from somebody who hasn’t given to you in the past. I mean you can’t just come up with a campaign, go to someone and say “please give me a million dollars.” They are going to say, “look, I got hundreds of causes asking for my money. I give to causes that I believe in or that I am invested in or involved in.” If the college hasn’t kept them involved and invested they are not going to give major gifts. So it’s important to get in the habit of giving and to have Calvin as one of the priorities for giving. You asked what my strategy is for securing donations — I like to think of it as finding who believe in what the college is doing, what the students do when they graduate, that it’s a project worth investing in. N: You say that donors are a diverse body of people? And a variety of opinions? B: Well there are 14,000 people that give. The last campaign I think they were almost 15,000. 14,700 or something. So you have as many individual tastes and interests as you got people. N: When you present the college and you want to appeal to certain donors — donors tend to be wealthy, and they are CRC? B: No, I would say the majority are CRC, but we have received a lot of funding from alums that are not CRC. Fifty percent of our students are other than CRC and a significant amount of alumni that are not CRC. We are also getting some major gifts from parents of students who were not themselves alumni, and from people in the Grand Rapids community. Several of our chairs and institutes have been funded by people who did not go to Calvin. N: How would you explain a decline of young alumni and senior student donation at Calvin? B: I think that students feel right now in the last five or six years that the economy is bad and they are really uptight about their financial situations. I would say that would be one of the causes. I also fear that some people think that because there are big gifts, we don’t need smaller gifts. Which is a mistake for two reasons; one is we need every size of gift to make this work. And secondly we need to get people in that habit of giving. In addition to the endowment and capital campaign we get $3 million a year just in operating gifts. We call it the Calvin Annual Fund. And that is mostly smaller gifts. It’s very important. If you have $50 million and you spend 6 percent, that is $3 million a year you have to spend. Our Annual Fund raises $3 million a year. That is the equivalent of having another $50 million of endowment. So we call that “spendable” or “hot money”, and that is extremely important. In a sense the annual fund generates half as much money every year as the whole endowment does. N: So it’s that type of money that counts too. B: Oh, absolutely. N: A big endowment does not necessarily mean quickly usable money? B: That’s correct. It takes $17 million to have $1 million of endowment, $1 million you can spend. N: So would you say a disconnect, or a student body ignorance about Calvin operations, might contribute to a lack of interest? B: I think it might. That’s why I like the Student Alumni Association initiatives. And the student government had been much more active in recent years in trying to address student awareness about how important that is. But if you figure that between the endowment and the denominational gift and the annual fund, that is $12 million out of a $98 million budget. That is huge. Plus we get some money from grants, cooperations, foundations, and governments. By the time you are finished we are talking probably almost 20 percent of the budget, money that is not tuition money, which is given to the college by other sources. So to make up for that, if you did not have that, tuition would be 20 percent higher. And you wouldn’t have anything like the amount of financial aid and scholarships that we have. Scholarships and financial aid are the biggest things. Students are direct beneficiaries of the biggest part of the college’s endowment. N: A donation is when you give to something you believe in. Do you think student giving would increase if they knew exactly how their money would be redemptive? B: We let people designate their money. So if someone wants to designate their gifts they pick a project. But if students want to give to the scholarship fund, they want to give to the Campus Commons or other things that are directly related to what the next generation of students is going to benefit from, that certainly is a good idea. N: Thank you.