MHA AA/F Restructuring

MHA AA/F Restructuring FAQ’s (published April 7, 2014)

1) Has there been a restructuring of the operating model of the MHA Alumni Association/Foundation (AA/F) and, if so, what has changed?

The short answer is yes. The AA/F Board of Directors voted unanimously in January 2014 to change the operating model of the organization to more effectively pursue its mission in service to alumni and the U of M MHA and related programs.

Historically, two sources have supported the AA/F operating budget (approximately $450,000 in fiscal year 2014): 1) Member dues or annual fund donations to the AA/F and 2) The MHA program makes an annual contribution of $105,000 to support general operating expenses. The MHA program also covers 50% of the salary and benefits costs of the joint position of AA/F Executive Director and MHA Associate Program Director, for a total contribution of $205,000 per year (the other 50% of the Executive Director’s compensation is paid for by the MHA AA/F).

Over the past four years, the balance of the operating revenue has come from alumni contributions and from unrestricted financial reserves held by the AA/F. As a consequence of this approach to AA/F operations, alumni have been asked for contributions to fund both operations and student scholarships and faculty endowments.

The financial challenges of continuing this model have become increasingly apparent. Work done by current and past board leaders has led the board to reach three conclusions that directed to the vote for a restructuring:

1. Alumni are more inclined to contribute directly to the support of students and the program rather
   than the AA/F operating budget;
2. There are limits to dollars available from alumni, so funding requests for operations competes with funds requests for students and the program; and
3. Research by the board on other successful alumni associations demonstrates that few (if any) request contributions for both student support and operations.

2) What is the nature of the change?

Operations of the AA/F will continue. The corporate entity will remain operational and the active board of directors will remain in place. The organization will retain ownership of its balance sheet with all existing accounts remaining intact.

Financial operations of the AA/F entity will be assumed by the MHA Program under the direction of the AA/F board, with the MHA Program Director assuming operational oversight under the direction of the AA/F Executive Committee.

Operating expenses will integrate with the budget of the MHA program while alumni events and engagement-related activities will be managed by alumni relations staff in the School of Public Health. The level of financial support supplied by the MHA program will essentially remain the same.

The full- and part-time positions held by Mark Reitan and Barb Ehlers who supported AA/F activities will cease as of July 28, 2014 and June 30, 2014 respectively. Both Mark, whose leadership over the past six years moved the organization forward, and Barb, who provided critical support to the management of the AA/F, are owed a great debt of gratitude for their service and commitment to the mission and people of AA/F. They are valued and will be missed. Please watch for upcoming notices of celebrations to recognize Mark and Barb’s service to the organization.

The net result of the restructuring is that all alumni and friend contributions will directly support MHA student scholarships and faculty and program support.

3) Will the strategy of the AA/F change?

The board has worked to refine the strategy of the AA/F to focus on:

• Engagement
• Education
• Endowment

It will remain the mission of the AA/F to support the MHA Programs while it engages with alumni with a principal focus of ongoing professional development and life-long learning.

4) What will happen to the money that AA/F has now?

All funds controlled by the AA/F will remain in its control. Accounts available for direct support of student scholarships and program needs will be evaluated for their potential to benefit the mission. In order to recruit the best and brightest students, we are focused on providing better financial offers to compete with other top-ranked schools.

5) What is the strategy for fundraising going forward?

The active endowment committee, chaired by Jerry Nye, will be supported by School of Public Health and University of Minnesota Foundation staff. This committee is committed to the new direction and will be unveiling the next generation of its plan to continue ongoing financial support for the program.

6) In summary, what does the AA/F leadership believe?

The leadership of AA/F believes the following:

• The restructuring of the AA/F business model will deliver more value to students and the program more efficiently.
• The organization retains the flexibility to test this new model while retaining control of the corporate entity and balance sheet.
• Our refined approach to alumni engagement will continue to support engagement and life-long learning and professional development.