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Original Query: From: R. Stark, VIVA, Denver University, Denver, CO.
Our sponsor is a private school that considers our program as an income
source for the university. Their requirement is that we pay in excess
of 32% of our gross annual income to support other university activities.
In return for this we get no facilities and very little other support
that we are not required to pay separately for. Debbie Rodgers could not
think of any university sponsor that takes this position. The burden damages
our ability to improve and grow. Any suggestions or comments other than
the obvious?
From Polly Nelson, VIVA!, University of Denver, Denver, CO.
RStark--Your question to the Forum is misstated. Anybody reading that
the University requires us to "pay in excess of 32% of our gross annual
income to support other university activities" would conclude of course
that that is all wrong. If, however, you asked a question about overheads,
I think you would find that every last one of the university-sponsored
LLIs pays overhead expenses to the sponsoring university.
Granted that there are adjustments that should be made in that 32% overhead--those
are matters to be negotiated between us and the university. Don't scuttle
it before the talks even start.
Regarding our relationship to the university, we would not have succeeded
as we have without them. We would not succeed in the future without them.
And with the current reorganization of the University, VIVA! now has the
opportunity to develop a broader working relationship with the university--let
them earn all of that 32%, if you will--without changing the basis of
VIVA! We are a self-governing organization with control of our own curriculum,
and will remain so.
Don't scuttle that opportunity before the talks start either. My question
to the Forum has to do with surplus funds. There is a surplus after expenses
(including overheads) that presently goes into the university's general
fund. Shouldn't that money go into a reserve for VIVA! purposes only?
Is there somewhere a legal requirement that a non-profit organization
such as we are can spend its money only for its own benefit? What have
other LLIs done in these circumstances?
From Dick Vernon, LLI at Baldwin-Wallace College, Berea, OH.
I am intrigued by your situation, but several questions occur to me that
beg for answers before a response is possible. Some of the questions in
the order they came to me are: What specific benefits does your LLI get
from the sponsor? What is the approximate dollar amount your LLI gives
to the sponsor each year? What benefit(s) other than financial does your
LLI provide to the sponsor? What were the expectations of your LLI founders
and the sponsor in the beginning? Do the LLI members independently operate
the LLI program and administrative activities or are they sponsor managed/staffed?
What benefits might the sponsor provide to your LLI to satisfy your expectations?
Are these compatible with the sponsor's situation and priorities? Do you
think these benefits would be reasonable to you if you imagined you were
the president of the sponsor? I'm sure there are more factors that would
be helpful to understand your situation, but these are the ones that occur
to me spontaneously.
From Robert Stark, VIVA, Denver University, Denver, CO.
According to the university accounting officer we're required to pay 32%
of our $18,000 gross revenue for something like "faculty support and classroom
maintenance," neither of which we use. This totaled (rounded) $16,500,
the $1500 balance was for unspecified expenses, hence the description
of "in excess." I have talked to programs at Duke, American University,
U. of Minnesota (Duluth) and have found them paying direct expenses but
not general overhead expenses of this magnitude as such. Duke (a program
3 or 4 time our size) pays the same total that we do, but gets in return
a total classroom building, the ability to keep their annual surplus,
and their own reserve fund. I would like negotiations with the university
to be successful. It's a prestigious resource. Given our successful independent
operation I don't see what they can offer us for that amount of money,
and more in the future as we grow, that we need. The problem apparent
to me is that our sponsor sees us as a profit center primarily, not for
our value as a highly visible community outreach program that reflects
well on them. Rather than scuttling, I'd like to achieve a consensus for
a reasonable position that will cement our relationship with relief from
these unwarranted charges and let us establish an independent reserve
fund as many other LLIs have done.
From Richard DiVecchio, Lifetime Learners Organization, Norwalk, CT
There surely must be a public institution in Denver that can accomodate
your organization. I suggest contacting a local community college as a
pretty good alternative.
From Dick Vernon, LLI at Baldwin-Wallace College, Berea, OH
First, Baldwin-Wallace College (BW) a small private institution, does
not charge our LLI any overhead fees. We are charged for only the services
we use just as any other department is charged those costs for printing,
mailing, copying, etc. Any additional monies we give to the college are
voluntary contributions determined by our LLI organization which is independently
run by our members. We are most fortunate to have BW do our bookkeeping
for us, at no fee, incidently and they write checks to pay our bills!
And we do carry over any remaining balance from year to year in our BW
account. As far as I know, we are treated the same as any academic department
within the college; this leads to your question about carry over. If you
have money left over after expenses each year, is there really a practical
problem? I suspect all academic departments in your institution also "lose"
any remaining balance each year. Doesn't the problem become practical
only when you want to have some extrordinary expenses in a given year?
How do the academic departments plan for extraordinary expenses and will
the sponsor treat you the same as the other departments for such conditions?
It seems to me that there are at least two workable approaches: 1) the
LLI is allowed carry over and must operate within its own account balance,
or 2) the LLI does not carry over any funds from year to year, but the
sponsor then must provide for extraordinary expenses on occasion. I imagine
the second approach is much more challenging with the competition for
funds within the institution! If you have to resort to legal determinations,
I suspect the relationship with your sponsor is in serious trouble.
Incidentally, I developed a new insight when the president of our college
very politely pointed out to me that our LLI's gross yearly income was
somewhat less than the tuition paid by two undergraduate students!
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May 12, 2008
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