Reinvesting in the Future
Development Reinvestment Q&A
1. What is “development reinvestment?”
A. Cal Poly is implementing a practice of reinvesting five percent of all gifts it receives to help increase the amount raised in the future. Leveraging a small portion of its gifts to boost giving in the coming decade, this practice will help Cal Poly enhance its margin of excellence. Other major public universities, such as Virginia Tech and University of Florida, use reinvestment to help increase their fundraising dollars.
2. What is the effective date for implementation?
A. January 1, 2009
Gifts completed and payments on pledges documented prior to January 1, 2009, will not be assessed the development reinvestment.
3. What is the rationale for the reinvestment?
A. The majority of advancement activity at Cal Poly is currently funded through state budget allocations. However, as state resources grow more uncertain, securing additional support will become critical if we are to continue providing the quality educational experience that has made Cal Poly such a successful institution. Our students understand this need, and in fact voted to impose additional fees on themselves to fund learning enhancements such as equipment, field trips, student projects for competitions, etc. Additionally, President Baker appointed a blue ribbon task force of alumni, CEOs and other business leaders to study advancement funding models. One of their recommendations was to institute the reinvestment method of funding development work.
4. What will the reinvestment dollars fund?
A. Initially, these funds will help build infrastructure for Cal Poly’s next campaign and other fundraising activities. Cal Poly’s previous campaign, the Centennial Campaign, was the largest campaign ever for a public master’s university, raising $264M that created additional scholarships, endowed chairs and professorships, new buildings, laboratories, sports complexes, leading-edge computer labs, and outdoor learning spaces. It also tripled the endowment, adding almost $100 million. We anticipate that our next campaign will be even more successful.
5. How does Cal Poly compare to other universities and non-profits in terms of what it costs to raise money?
Cal Poly has a solid track record in making the best use of its advancement resources, and it leads the CSU in charitable gifts from both alumni and parents. Moreover, in the most recent year reported, it cost Cal Poly 12 cents to raise each dollar. This compares favorably with other campuses, as well as with nonprofit agencies in general. For example, the average cost to raise a dollar at the CSU’s 23 campuses is 16 cents.
6. Do other public universities in California use reinvestment?
A. A recent survey of California public universities showed that over half of the CSU schools currently make use of reinvestment, with most in the five percent category. Eight of the 11 UC campuses also employ reinvestment.
7. How will the collection process work?
The reinvestment will be collected as each gift is received. For pledges documented after January 1, 2009, the reinvestment will be collected each time a payment is received.
Depending on the donor’s preference and the needs of the campus, the reinvestment may be collected in different ways:
- The reinvestment will be collected directly from cash gifts or from the net proceeds of gifts-in-kind converted into cash.
- Donors may choose to contribute an additional amount to cover the reinvestment.
- A donor may choose to pay the reinvestment for the benefit of another donor.
- With pre-approval, a gift of more than $100,000 can be invested until it earns enough to cover the reinvestment. However, this method would delay the implementation of the gift.
8. Will any gifts be exempt?
A. Certain gifts may be exempt from development reinvestment, including:
- Gifts in kind that are not converted to cash and for which there is no cash portion.
- All grants that are assessed indirect costs.
- Gifts from foundations that have published guidelines prohibiting such an assessment.
- Gifts which the President, at his discretion, may decide to exempt from the reinvestment or to reduce the level of the reinvestment.
9. If I have questions, who can I contact for more information?
A. Contact University Advancement: Bob Stets, Associate Vice President/Finance & Operations at 805/756-0232 or rstets@calpoly.edu or Mike McCall, Associate Vice President/Development at 805/756-7106 or mmccall@calpoly.edu