Page 30 - College Planning & Management, October 2017

GETTING CREATIVE WITH FACILITIES FINANCING
2000, SLF sold $65 million in bonds, of which it paid $20 million to WKU for its 15 residence halls.”
Since the foundation was established in 1999, $150 million has been invested in WKU’s housing facilities. In its first 10 years, every bed on campus was renovated, and a central chiller plant, which sells chilled water to the university, was constructed to cool the residence halls.
“SLF is generating about $25 million in revenues yearly,” says Kuster, “plus an additional $4 million in surplus that goes back to renovation and new construction. In February we refinanced our outstanding bonds and borrowed $28 million to build a facility that’s under construction now. So we have an outstanding debt of about $110 million and, even with that, we’re generating excess revenues.”
A newly completed 10-year master plan includes a $100-million investment in new construction or renovation of existing build- ings. “Because of SLF,” Kuster notes, “we’re well above the curve in both the condition and long-term health of our residence halls, which include 5,200 beds that are 100-percent occupied.”
Set Up a Revolving Fund to Finance Energy Efficiency Improvements
Founded in 2005, Sustainable Endowments Institute (SEI) has pioneered research, education and outreach to advance resilient in-
stitutional responses to the climate crisis. One of the organization’s initiatives is the Billion Dollar Green Challenge. Launched in 2011, The Challenge, as it is called, “encourages colleges, universities and other nonprofit institutions to invest a combined total of one billion dollars in self‐managed green revolving funds that finance energy ef- ficiency improvements,” according to its website (greenbillion.org).
“So far, 65 institutions with $135 million in capital are participating in the program,” says Mark Orlowski, SEI’s founder and executive direc- tor. “Every organization runs its own revolving fund. It serves to break you out of the normal budget cycle of fighting for money for projects, and treats projects as investments to repay the initial loan from savings.”
With a revolving fund, you use the same capital again and again. It’s compelling to tell a donor that his gift keeps on giving. “It’s also much easier to secure capital from different sources,” says Orlowski. “For example, University of Vermont has $13 mil- lion, which it lends to its cash reserves, and which, when launched three years ago, represented 10 percent of all its cash holdings.
One benefit of joining The Challenge is use of Green Revolving Investment Tracking System (GRITS), a customizable web-based project management tool for planning, tracking and organizing projects. “GRITS makes it really simple to enter a project,” says Orlowski. “Once you enter basic data, it will tell you ROI, payback period and internal rate of return, all integrated and easy to use. You can train to use it in one hour.”
Run a For-Profit Within a Nonprofit, AKA ‘Build a Hotel’
Imagine partnering with a business group to construct a hotel on your campus and, in the business deal, you put up 75 percent of the funding, or $9 million, to build the hotel, but you also get 75 percent of the proceeds. According to a 2006 University Business article titled “101 Smart Revenue Generators (and Money-saving Ideas),” this is exactly what administrators at University of Delaware (UD) in Newark, did.
“The university has a very fine hospitality management program,” explains William Sullivan, managing director of Marriott Newark and faculty member in UD’s Hospitality Business Management
PHOTO COURTESY OF THE UNIVERSITY OF DELAWARE
30 COLLEGE PLANNING & MANAGEMENT / OCTOBER 2017
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