CLASS OF 1953 UNITED STATES MILITARY ACADEMY

May 15, 2005

Dear Fellow Members of the USMA Class of 1953:

For several reasons it is most appropriate that the Class receive this full report on our 50th Reunion Gift Campaign, it's successes and continuing life.

At our 40th Reunion business meeting in 1993, the assembled Class under the leadership of Ed Andrews made a unanimous decision to raise funds for a commemorative gift to our Alma Mater at our 50th. At the time, we stated the intent of our Campaign rather broadly: "to enhance the [Academy's] intellectual preparation of cadets for lifelong service to the nation." As we progressed with the Campaign, Ed was appointed to lead it and, with support of the Gift Committee which he chaired and the wide and generous response from the Class at large, it was subsequently refined over the next ten years until at the Graduate Luncheon in Washington Hall during our 50th Reunion, we presented a Gift of $2,700,000 to endow, in perpetuity: " The USMA Class of 1953 Distinguished Chair in Civil Engineering ($2.5M). The Department of Civil and Mechanical Engineering has since allowed the endowment to remain invested and to grow to its current balance of ~$3.1M. The Department has only now moved toward the decision to activate it for the coming 2005-06 Academic Year. Though other Classes have committed to Chair endowments and have reached partial success, ours will be the first, class-endowed Distinguished Chair to be fully funded and activated. Civil Engineering education at West Point has been preeminently consequential in both the military and civil engineering history of this nation, so much so that the Smithsonian Museum recently made it the subject of a major exhibition. This program is currently rated at the top of all non-doctoral institutions in the nation. From activation onward, our Chair will continue to contribute a substantial margin of excellence, reinforcing this tradition begun during the administration of Thomas Jefferson. USMA announcement of Chair activation is thought to be imminent.

During the course of our Class Campaign, which coincided toward its end with the Academy's unprecedented Bicentennial fundraising, we became aware of a new surcharge system on funds raised. The Superintendent and AOG had, of necessity, agreed on this measure in order to properly support the cost of what was becoming a modern, professional development department.

To refresh your recollection, our private Association of Graduates is a dual-purposed activity, organized at our Alma Mater to provide two departments, Alumni Support and Development, which although organizationally common in colleges and universities, are legally ruled out for USMA, a government institution

Those in the Class who have been most involved in our fund raising effort fully recognize that taking a surcharge from funds raised is a common practice in institutional fund raising when costs are not fully supported by existing endowments, etc. We fully accept the efficacy of the AOG/USMA surcharge system under the situation now existing. However, we have believed since its adoption that the surcharge system works as a substantial impediment to giving and, in the long term, as an avoidable diminishment of funds otherwise destined for enhancement of the Academy.

A cogent example of the impact potential of this system is in our own story: Thanks to the negotiating abilities of Ed and Art Brown and the understanding support of Tom Dyer, '67, earlier Chairman of the West Point Fund Committee and now Chairman of the AOG, our Campaign and its gifts were exempted from surcharge. Should this not have been so, our Gift Fund balance at the time of Reunion would have been insufficient to fully fund the Chair at $2.5M, much less our Reading Room. We are heartened to be joined in this position by others: In their report at a recent Board of Trustee's meeting, the Finance and Business Operations Committee announced that in their meeting, "all conceded that the AOG must work to eventually eliminate the charge." Discussions at the recent, no-agenda, multi-Class, Washington Area leadership conference I attended, prominently identified this surcharge as a continuing irritant.

Due to this issue, our Class expanded our Gift Campaign to include a commitment to a substantial gift to the AOG Endowment to support future fund raising for the Academy, with the expectation that the surcharge may eventually be made unnecessary. For several reasons, that gift was not presented at the 50th Reunion. Instead, the balance of the Gift Fund was retained and allowed to double, primarily through your donations but also through investment, from ~$100K to over $200K. The Class Officers have considered the matter and decided that both the time is right and the assets sufficient for us to honor our commitment now.

Neither Ed as Gift Chairman nor I as President are able to be at the 20 May Board of Trustees meeting. I have asked our Secretary, Whitey Miller, a member of AOG's West Point Fund (WPF) Committee and who prepared this report, to formally present the Board of Trustees with our gift of $200K to the USMA Fund Raising Endowment (USMAFRE), now a separately administered sub-account in the Long Gray Line Endowment (LGLE). Like all other gifts from our 50th Reunion Campaign, it will be accepted without surcharge. (The AOG's WPF enables West Point to finance, with private contributions, projects and programs of benefit to the Military Academy and the Corps of Cadets for which taxpayer support is inappropriate. All monies given are held in the Fund and managed and expended in support of the Academy's margin of excellence needs as specified by givers and the Academy.)

This gift to the USMAFRE will provide money from investment income to fund AOG gift raising for the enhancement of our Academy. Since growth expectation is at least 4% and AOG plans for eight times the return in gifts from funds spent on fundraising, our endowment can be expected to notionally produce, in perpetuity, ~$64K per year. If the option selected is to grow our endowment before drawing from it, similarly encouraging but larger results can be projected. This gift will assure that our Class will always be substantially involved in the continuing enhancement of our Alma Mater.

Again, by making this gift, 1953 is the leading Class. With others certain to join us in giving to USMAFRE and with any reasonably expected investment growth in the endowment, that eventuality of eliminating the surcharge conceded by the Finance and Business Operations Committee, will come to pass. Then all funds given for the Academy's enhancement will go to that purpose.

Still underway are the design and production of the plaques that will permanently commemorate our gifts. Their dedication will be announced when scheduled. With this exception, our 50th Reunion Campaign is complete.

Nevertheless, we have decided to keep our Class Gift Fund active. We will still have a positive balance to add to and work from to enable us to keep on helping the Academy and our Association.

We are also drafting instructions to the WPF for the dissolution of our Gift Fund at the time of our 60th Reunion. This newly adopted practice results from the continuing endeavor by the AOG's CFO to bring the Association's financial procedures in line with currently accepted practices and New York rules related to activities such as ours.

For all the dedication to our Alma Mater that has been materially demonstrated by members of our Class since graduation and for all those who also have given so freely of their time and effort toward achieving our goals, we as a Class should be exceptionally proud and appreciative.

Walt Henderson
President