Monthly archives "April 2018"

Update from the Alumni Chair

Alumni Relations

I was hoping to start this article off crowing about a deep run in the NCAA Men’s Hockey Tournament, but the exciting regular season ended abruptly for the Pep Band and the team. Screw BU, it seems, so it is on to more official matters.
The Big Red Bands Advisory Council met in Ithaca on February 17, 2018, welcoming the 2018 student leaders of the Big Red Marching and Big Red Pep Bands. In addition to the usual reporting and budgeting, we took a deep-dive into our endowment funds. ***WARNING: Gory financial details follow – skip to the bottom for important announcements if you are short on time/attention span!*** As true BRBAA geeks know (all three of them), our endowment started over 35 years ago with a push for the “Second Century Fund.” There isn’t one endowment per se; we have multiple accounts of different types, and you can get a taste for the details here. Over the past few decades, budget surpluses have been reinvested in those accounts, which comprise shares in the University long-term investment pool. There is a smattering of gifts directly given to these accounts each year, but that represents both a minority of the gifts received – most go to the Bands’ annual funds – and the minority of the funds invested. Each share in the LTIP provides an annual payout ($2-3/share) that is set by the Board of Trustees. Resource Chair Nick Janiga ’00 presented some excellent analysis of our investing approach that showed an overall net-positive in present-day value cash because of our investment strategy. This may seem like an obvious finding, but it holds true even accounting for significant share value loss from the recession 10 years ago – a loss that still has not been recouped.
In fact, Nick’s analysis says that if anything, we need to be more aggressive in re-investing our cash reserves into LTIP and worry less about share value. Basically, there have been very, very few short-term periods where selling shares after a market decline would not be offset by the additional LTIP payout provided by those shares during that time. For example, current share value of ~$55 is still down from its October 2007 high of $69, a loss of 17%. If we sold those shares today, we would still be cash positive, as the $12/share loss is more than offset by the 10 years of $2.53 average payout per year on those shares. This is remarkable for two reasons:
1. It includes the most dramatic market crash we’ve seen in our lifetimes, and
2. It includes the terrible performance of Cornell’s endowment despite a surging stock market (which I briefly touched on last year).
The BRBAA had a very passive investing strategy after the initial second-century push until a little after the turn of the millennium, and the renewed focus on long-term finances was clearly the way to go. We now know that with the exception of perhaps 1-2 years before the $150,000 uniform purchase every 12 years, we should re-invest our gift account overages into LTIP every year to take advantage of dollar-cost-averaging to maximize the yields for the band.
If you’ve read this far, you may be asking, “Should I give directly to the endowment?” It depends on your intention, but if you are so inclined, the Bands’ non-endowment gift accounts still give maximum flexibility. We treat all gifts with the utmost respect and help the students manage their budget appropriately. Most years will result in a slight positive balance (even after line items set aside for long-term purchases), and we will re-invest responsibly. Nick can share this data in person this fall.
Speaking of which, Homecoming is September 21-22, 2018. Be there! Last fall, we moved the Annual Big Red Bands Alumni Association meeting to Saturday morning in the Fischell Band Center. It was a success, and we didn’t even realize the breakfast food was there for us right outside the glass doors. This fall, with the combination of actually realizing we ordered breakfast and a hastily mounted projector screen, there’s no telling what we can accomplish! We know that many people aren’t yet in town for the traditional 4 PM Friday Statler meeting, and even if you are, there are friends to see and beers to drink. We’ll be repeating the Saturday morning Annual Meeting this fall – so mark your calendars! Exact time TBD depending on kickoff and how late we’re out on Friday night.
Importantly, the proposed slate of 2019-2020 officers for the Alumni Association will be presented and voted upon at that meeting. If you’d like to donate time and energy to the Bands, please contact the chair of the nominating committee, Tom “Tasty Cakes” Seery ’09 (esquire). It really is rewarding to give back to an organization that means so much to all of us, and it’s a great excuse to get Hot Truck a few times per year.
I want to close by encouraging all Band alumni to come back to Ithaca for Homecoming, Reunion, or an away game near you. The Marching and Pep Band travel will be posted in the summer, reflecting the wacky new “rivalry” Ivy League schedule. Apparently Penn is just fine and we hate Columbia now. Don’t forget the Sy Katz Parade this fall on November 17 – details to come (I’m pretty sure the Band will be at that one)!
As always, thank you for your continued support of the Bands and the students!

Lowell ’99, ‘03