By Bob Martin
Dear Brothers,
I had hoped I would not have to write this letter to you, but we are rapidly running out of time. Time that we thought we had to be patient and wait out the economic
By Bob Martin
Dear Brothers,
I had hoped I would not have to write this letter to you, but we are rapidly running out of time. Time that we thought we had to be patient and wait out the economic downturn. Time to develop more commitments to our campaign. Unfortunately, time is running out and we now have some tough decisions to make. We are quickly approaching the point where we will need to sell our house, and Chi Phi at Penn State will only be a memory. We started our capital campaign over five years ago and have diligently moved ahead through some rough economic times. We have reached a pledge level of $1,057,000, 47% of our overall goal of $2.25 MM. Some said we could never raise more than $500,000 but we proved them wrong. Although we are proud of this effort, we are far from where we need to be.
Our strategy over the past 12 months or so, has been to concentrate on the younger eras of the 80's through 2000's, and then we planned to leverage this success with a large push in the 70's, 60's, 50's, and 40's. We pushed through our intermediate goal of $1,000,000 and have had a good participation rate with the younger classes, but have slowed to a snail's pace over the last four months. We have always done our best to be good stewards of your money and of the house we all own. As such, I am now going to layout the financial situation we are in, and our plans in moving ahead. These numbers are rough, but will give you an idea of where we stand:
Our house was appraised five or so years ago at about $800K. We do not want to spend any more money in another appraisal, but we conservatively estimate that it might now be worth $650K. We currently carry a first and second mortgage of approximately $325K. This leaves us with approximately $325K in equity. If we take provisions of $100K for a safety factor and liquidation cost, it leaves us with a working equity of $225K. To date, we have had $135K already donated to this capital campaign which had been spent in paying the ~$60,000/year annual operating cost (mortgage, taxes, insurance, and miscellaneous costs). We were out of money, however 4 brothers agreed to loan money to the house at the rate of $5,000 per month to let us continue fund raising. To date, these loans amount to $70,000 and they are guaranteed by the equity in the home (after the first two mortgages). The $135K already donated stands last in line. If you do the math, you see that with our safety factors, we will no longer have equity to provide protection for the $135K already donated in 4 more months. The brothers who are floating loans to our house have put a red flag up to make sure EVERYONE is aware that if we continue, the $135K that some of you have already paid on your pledge commitments is in jeopardy of not being paid back.
At this point we have two choices:
A) We make the decision to stop the campaign, we liquidate the house and hopefully everyone is made whole.
B) We extend the drop dead date for the campaign to July 31, 2011 and put approximately $40K of the $135K already donated at risk, but give us at least a chance to reach our goal of $2.25 Million
Remember, the above are all good faith estimates--they are not guarantees. The house may not be worth $650K, or our safety factor may not be high enough---in which case, more money is at risk, perhaps all of the $135K. On the other hand, our numbers may be too conservative.
At this time, the board has voted to take option B, and put on a full court press to make our numbers. There will be no more extensions to the campaign. This is it......period. The deadline is July 31, 2011. In fact, if we see no substantial movement over the first half of the next 11 months, we will shut the campaign down before July of next year. Therefore, the board has agreed that if we have not reached $1.7 MM in written pledges by March 1, 2011, we will shut down the campaign and begin plans to liquidate the property.
We have come a long way in this campaign. Our timing could not have been worse----a recession to end all recessions. Nevertheless, we stand at nearly 50% of our goal. We can make this happen. We all need to look at the pledges we have made----can we up them? If you can, please continue to support our efforts by completing an additional pledge form (attached). If you have not pledged, we need you to step up. 241 brothers out of 981 have made pledges. 1 out of every 4. That's not enough. We need EVERYONE to step up....small pledges or substantial pledges...they all make a difference....just join us. Click here to download a pledge form.
Determination is a word much misunderstood. Determination is an unblinking willingness to pay the price as often as it must be paid. Determination is never losing sight of your objective, no matter what comes along to distract you. Determination is endurance. Slow and steady determination is what has gotten Chi Phi, Alpha Delta to our present pledge level, but our time is running out.
Those of us that have worked so tirelessly on this campaign over the last 5+ years each have the determination of 1000 men. How about you? Are you determined to help Chi Phi, Alpha Delta succeed or will you stand on the sidelines and let the Alpha Delta chapter fold like a house of cards? We have the foundation to make this house and our fraternity more solid than it has ever been. We only see this through with EVERYONE involved.
If you are still in touch with other brothers not receiving this message, please send their e-mail address directly to me at rpm163@psu.edu. We need to make sure that every Chi Phi hears our story.
This is it, gentlemen. We have this one last shot. We will be reaching out to all of you to ask for your final support. We will also provide daily updates to all alumni.
Look for more information to begin our trek to $2.25 MM by July 31, 2011--more importantly $1.7 MM by March 1, 2011. It's now or never, gentleman.
