Foundation President's Report

It is my pleasure to report to you on our progress during the current year. Each of you has worked tirelessly to shield this university and foundation from economic uncertainties that have strained the nation and our region. Your efforts have helped us remain on the right track in terms of fiscal strength and stability. During a year when The Chronicle of Higher Education, among others, denotes the impact of a two year decline in giving to Colleges and Private Schools, you have, again, continued to provide your leadership, loyalty and legacy to East Tennessee State University.

As giving has reached a plateau or in many cases declined nationwide, the Foundation has faired well over the past year. Investments have yielded a $2.8 million turnaround as compared from last fiscal year when we witnessed significant unrealized losses.

• East Tennessee State University received more than $17.8 million dollars from alumni and friends in 2005-2006 . This includes $10.4 million contributed to the ETSU Foundation, $4.6 million in planned gifts, and $2.8 million from private gifts and contracts generated through the university by ETSU's faculty and staff. ETSU thanks each of our generous alumni and friends who through charitable giving, continue to support the university's efforts to raise the “ Margin of Excellence” each year for our students.


• Tennessee Governor Phil Bredesen declared the new ETSU College of Pharmacy “ready for business” at a reception on campus in April. A year earlier he challenged the people of Northeast Tennessee to raise $7.5 million. Total fundraising for the College of Pharmacy has exceeded $7.8 million from nearly 1,000 donors . This also includes current College of Pharmacy scholarship endowments in excess of $358,000 and $873,000 in planned gifts. The total fundraising goal for the College of Pharmacy is $16 million. This leaves $8.2 million to be raised through the Reaching Higher needs based capital campaign. These efforts made it possible for the selection of seventy-two students for the inaugural class who will begin the program in January 2007. The continued vision and leadership of ETSU President Dr. Paul E. Stanton, Jr., founding Dean Dr. Larry Calhoun, and key regional partners working together will improve health care and provide a positive economic impact and additional educational opportunities in our region.


• During the annual Distinguished President's Trust dinner on January 27, 2006, Mr. C.M. “Bill” Gatton announced his second major gift to the ETSU College of Pharmacy . He presented a check for $400,000 to the pharmacy school, bringing his total giving at that time to $800,000. In addition to this donation, Mr. Gatton issued an invitation to his friends, fellow regional automobile dealers and others, to match up to an additional $400,000 on a “dollar for dollar” basis for contributions made between his challenge and April 30, 2006. Mr. Gatton's invitation was accepted by 256 donors and the match was met before the established deadline. The combined giving from Mr. Gatton brought his total support to the ETSU pharmacy school to $1.2 million.


• The National Association of Colleges and University Business Officers (NACUBO), in its annual report for 2005-2006, placed ETSU's single-year endowment growth among the best in the United States at 12.2% . The university was ranked 397 out of 764 endowment study participants. Over 3200 universities are invited to participate in this study annually. The NACUBO study also reported that the investment rate of return at 11.4% for the ETSU Foundation's endowments exceeded the national average of 10.6%. This achievement is a positive indication of the Foundation's conservative investment and sound management philosophy.


• The value of the University and Foundation's 334 endowments, including the Chairs of Excellence, increased from $66.3 million to $74.3 million for a total increase of $8 million. This is a 9% increase in the value of endowments for the year. These endowments support the Foundation's mission of scholarships and educational enhancements for the university's students, faculty and staff.


• One year after the announcement of the Reaching Higher capital campaign, private giving exceeds $47.6 million . This is 29% of the private fundraising goal of $164 million. The campaign encompasses “an evolving list of projects” reflecting the direction of the university as it creates new programs and opportunities to meet the needs of our students and the entire region. This $224 million campaign (including $60 million of unrealized public funding) focuses on quality education, endowment growth, health sciences, athletics, and a major emphasis on new facilities. With thirteen projects completed or in process, this unprecedented effort has been and will continue to be a major economic development of this region.


• ETSU continues to be a leader in private giving among colleges and universities in the Tennessee Board of Regents (TBR) system . The TBR's goal for private giving among four-year colleges and universities is 5% of the institution's budgeted Educational and General Expenditures (E&G). Over the past five years, ETSU's private giving compared to E&G has exceeded 7.9% , compared to the four-year colleges and universities average of 6.79% and system wide average of 5.84%. The TBR is the sixth largest higher education system in the nation.


• Over $1,191,650.81 in scholarships was awarded by the ETSU Foundation during 2005-2006 to over 450 students throughout our region and country who chose to pursue their degree at ETSU. This is a $457,650 increase from last year. Over the past decade, the Foundation has provided more than $10 million in scholarships to deserving students.


• The prestigious Roan Scholars Leadership Program, which admitted the first class of Roan Scholars in 2000, graduated its third class. Currently, fourteen Roan Scholars are enrolled in the challenging Roan Program. Established through the vision and generosity of Mr. Louis H. Gump, the Roan Scholars Endowment in the ETSU Foundation totals $5.9 million , including planned gifts, with a goal to reach a $10 million endowment.


• The Challenge 2000 Endowment continues to grow and serve our students with scholarships across the university. Our alumni and friends have joined together to raise over $850,000 in gifts and pledges toward the $2 million goal .


• The ETSU Foundation provided $38,000 for the Distinguished Faculty and Staff Foundation Awards Program . Faculty recognition in the areas of teaching, research and service in 2005-2006 were bestowed upon Dr. John Whitehead , a professor and former chair of the Department of Criminal Justice and Criminology in the College of Arts and Sciences; Dr. Chuanfu Li , a professor in the James H. Quillen College of Medicine's Department of Surgery; and Dr. Donald Sanderson , a professor in the College of Business and Technology's Department of Computer and Information Sciences respectively. These ongoing awards serve as an additional incentive and recognition for excellence in the classroom and the workplace for our faculty and staff.


• Recognition of our outstanding alumni and friends is done annually through the Distinguished Alumni Awards program . Thirteen recipients were presented awards during the Alumni Association's Awards banquet and Annual Meeting on May 5, 2006. The awards banquet serves as an inspirational kickoff to spring commencement weekend activities each year. Honorees for 2006 included: Outstanding Alumna, Linda Good (B.S. '69); Outstanding Alumnus, Johnny Jones (B.S. '69); Award of Honor recipients, Dr. William G. Linebarger (B.S. '72 ), Lt. Gen. (Ret.) Fred McCorkle (B.S. '66), Phyllis A. Tickle (B.S. '55) and Ellen F. Wilhoit (B.S. '79); Honorary Alumni, Claudia and Jeff Byrd and Nita and Robert “Rab” Summers ; and Distinguished Alumni in Education, Maria del Mar Carter (B.S. '76, M.A. '78), Tracy L. Hoilman (B.A. '86, M.Ed. '92 & '97) and Karen D. Cunningham White (B.S. '86, M.A.T. '92).


• In the past five years, a third of ETSU's faculty, staff and retirees have made gifts to the Foundation in excess of $1.3 million. This year current and former employees gave over $257,000 to the Foundation . This unified commitment to the betterment of the institution will assist ETSU in achieving its vision to become the best regional university in the nation.


• During 2005-2006, the Pirate Club received over $568,000 in charitable donations to support student-athlete scholarships, programs and facilities.


• WETS-FM, the university's public radio station , continues to serve our region thanks in part to private support it received from listeners was in excess of $340,000 in 2005-2006.


• ETSU Advancement is continuing to work on finalizing the estate of Congressman James H. Quillen. The bequest in excess of $14 million represents the largest single contribution from an individual to ETSU. The Quillen Endowment currently provides 36 academic scholarships and 36 medical scholarships for a total of 72 scholarships at $4,000 each, or the equivalent of $288,000 annually. This represents an increase of 36 scholarships over last year. The Quillen scholarship endowments have enabled the recipients to enhance their future by providing them with valuable educational opportunities at the university.


• The ETSU annual fund and phonathon campaigns continue to serve the university in its effort to communicate with and provide alumni by way of direct contact an opportunity to support their alma mater each year. The 2005-2006 Alumni Phonathon challenged student callers to reach each of the university's 70,000 graduates in a two-semester timeframe. In a year when the ETSU Advancement leadership thought it prudent to exclude calling in states devastated by Hurricane Katrina, giving increased dramatically in the percentage of first-time donors who made commitments to their college, department or scholarship of choice.


• Fifty-four new members were welcomed by President Stanton, to ETSU's Distinguished President's Trust (DPT) during a formal dinner held at MeadowView Conference Resort and Convention Center on January 27, 2006. The DPT is made up of individuals and businesses that have lifetime contributions to the university in excess of $10,000. Additionally, each winter the Foundation recognizes new members of the DPT Wall of Honor representing cumulative giving of $50,000 or more. Among these were two new Platinum Society ($1 million in cumulative giving) members: J. Rolland and Sharon S. Boles , Gray, and Wellmont Health System , Kingsport . Dr. Stanton also recognized new Gold Society ($500,000 in cumulative giving) members: BlueCross BlueShield of Tennessee Health Foundation , Chattanooga; Wilhelm "Bill" Herzog , Church Hill; the City of Johnson City ; the estates of J. Louis and Jane D. Hilbert , Johnson City; the Johnson City Power Board ; and Lillian and the late George Yount , Rogersville.


• The TBR awarded Scott M. Niswonger of Greeneville, Tennessee with the Regents Award for Excellence in Philanthropy in March 2006. In his letter of nomination for Mr. Niswonger, Dr. Stanton wrote, “It would be difficult, if not impossible, for me to imagine any other individual, through his or her philanthropic giving, service, and leadership that has had a greater impact to shape positively support, and create new endeavors, initiatives, and partnership for ETSU than Scott Niswonger.” The Regents Award is the highest honor bestowed by the TBR for those individuals who clearly demonstrate a commitment to the value of higher education, leadership in philanthropy, and the highest standards of integrity.


• In January 2006, President Stanton and Eastman Credit Union CEO Olan Jones announced Eastman Credit Union was providing major corporate support to develop the Eastman Credit Union Multi-Media Classroom at the Gray Fossil Site . With an expected dedication in 2007, the Gray Fossil Site will host students, researchers, tourists, and families as they all peer into the past from the Miocene Era. The site has been termed “the most significant find in North America ” from that age. A museum of natural history at the Gray Site will showcase fossil finds of ancient alligators, tapirs, pandas, rhinoceroses, and many other prehistoric animals, with 50,000 visitors expected annually.


• The inaugural holder of the Eastman Chemical Company Distinguished Chair of Business Leadership was Dr. Ram Charan , internationally recognized management advisor and co-author of the best seller Execution: The Art of Getting Things Done . On April 13, 2006, Dr. Charan spoke to an enthusiastic and large group of regional business leaders and ETSU students and faculty. Brian Ferguson, CEO and President of the Eastman Chemical Company, and Dr. Linda Garceau, Dean of the ETSU College of Business and Technology, welcomed Dr. Charan at the inaugural event. The Eastman Chair was created in the ETSU Foundation to “support business leadership lectures, research in areas of business leadership, and other related business leadership activities.”


• The Legacy Circle , over the past four years, has exceeded $20 million . Its current membership is 225 loyal individuals who have given planned gifts through Wills, Charitable Remainder Trusts and Life Insurance policies and other types of planned gifts. This fiscal year has been another stellar year as alumni and friends indicate that they are building their legacies at ETSU with planned giving pledges in excess of $4.6 million.


• During the past fiscal year, the ETSU Foundation, in partnership with the International Storytelling Center and First Tennessee Bank, launched Sharing Your Story, Building a Legacy . This quarterly series, hosted at the Center's Theatre in Jonesborough, features the power of storytelling to encourage prospective donors to reflect on their lives as stories to share as we leave legacies to support future students and faculty through the ETSU Foundation in donors' estate plans. Attendance at each event has grown to almost 90 participants. The series is a catalyst for alumni and friends to become members of the ETSU Legacy Circle for planned givers.


• The ETSU 101 – President's Classroom graduated its second class on October 17, 2006 . Dr. Stanton and numerous faculty and staff spent five sessions interacting with 23 regional leaders. The program allows participants to experience being a doctor, a movie producer, a song writer, a nurse, a golfer, an engineer and a basketball coach. This year's class and last year's pilot class were composed of three current or former mayors, two commissioners, 26 presidents, CEOs and business owners and 13 other leaders from the community. From this experience, this influential group of people has generated support for ETSU in numerous ways.


• In March, ETSU was named one of the nation's best value undergraduate institutions according to The Princeton Review in the 2007 edition of the annual guide, America's Best Value Colleges , which profiles 150 colleges and universities with excellent academics, generous financial aid packages and relatively low costs. ETSU is featured in the publication as one of 103 public colleges and 47 private colleges in 40 states that were chosen for inclusion based on student opinion data and information obtained from 646 institutions.


• ETSU PRIDE Walk, the university's inscribed brick walkway, is off to a great start. Nearly 1,000 alumni and friends of the university have ordered bricks, listing names and degrees of alumni, naming family members, honoring mentors and memorializing individuals significant to the history of ETSU. Currently in the design process, the walk will complement existing architectural components and ongoing beautification efforts underway to mark the 100th anniversary of ETSU. October 2007 is projected the date for installation and dedication activities.


• The Council for Advancement and Support of Education (CASE) District III has recognized ETSU with the Award of Excellence for the creation of the ETSU Foundation Carillon and Alumni Plaza , as well as a Special Merit Award for the ETSU PRIDE program. District III includes over 550 colleges and universities throughout the southeastern United States .


• For the 20 th consecutive year, the ETSU Foundation achieved an unqualified audit report without any findings or recommendations. This audit report is a demonstration of the integrity and dedication of the Board of Directors and ETSU personnel in the management of the private funds entrusted to the Foundation.

In summary, our success in fundraising can be attributed to three principles:

1. Longevity of key volunteer leadership and university personnel working together as a team;
2. Strong, expert volunteer involvement in investment policies of the ETSU Foundation; and
3. Active involvement of academic leaders throughout the institution.

Our success is a direct reflection of your loyal and continued support.

Thank you!