Fueling Possibility: Annual Fund support critical to Academy’s strategic priorities

By Ellen Ratrie Ternes

As the Naval Academy’s chief financial officer, Commander Joe Rubino, CEC, USN (Ret.), has his finger on the pulse of pretty much everything to do with the Academy’s budget and funding. These days that often means belt-tightening in the face of cuts in defense appropriations.

But Rubino, son of late Academy boxing coach Tony Rubino, is also seeing a side of the Naval Academy community that doesn’t really surprise him. Alumni are stepping up with charitable gifts to make sure midshipmen continue to receive the education and training today’s world demands.

 “I couldn’t be more proud to see the generosity of alumni who want to give back to the institution by improving the experience of midshipmen and helping to graduate ever-better leaders for our sailors and Marines,” Rubino said. “That generosity provides the margin of excellence above what the federal government can do.”

One of the driving forces behind the outpouring of alumni generosity is the Naval Academy Foundation. Since its start in 2000, the Foundation has raised almost half a billion dollars for Academy projects and programs that make possible the margin of excellence that has come to define the Naval Academy education.

The largest portion of the nearly $39 million in gifts the Foundation raised in 2015 is restricted dollars that go to pre-designated uses such as the Center for Cyber Security Studies, the Stockdale Center for Ethical Leadership and athletics, gifts that, depending on their size, might be recognized with the naming of a room or faculty position.

But it’s perhaps the smaller pot of funds donated to the Foundation’s Annual Fund—about $8 million in gifts in 2015—that in the long run has the most impact. Like the engine that keeps a high powered car on the road, the Annual Fund makes all of the Foundation’s fundraising efforts possible.

Annual Fund

The Foundation’s Annual Fund solicits gifts from alumni, parents and friends. Money donated to the Annual Fund is unrestricted, meaning the Foundation and the Academy can use it as they see fit. Some of those unrestricted dollars—about $1.1 million—go directly to the Superintendent to use at his discretion.

Another $900,000 or so is directed to the Alumni Association to augment its programs and services. But the biggest chunk of donations to the Annual Fund sustains the operations of the Foundation itself, which then goes on to raise exponentially larger sums for key Academy priorities through targeted fundraising efforts. 

One alumnus who asked to remain anonymous has given heavily to the Foundation, including a $1 million gift to the Annual Fund in 2015, since retiring from a corporate management career. “Those of us who have done well have a responsibility to give back,” he said. “The military academies serve a real core purpose of keeping a military capability available to the country. The Foundation and the Annual Fund are raising money for needs not appropriated by Congress to do just that, and they’ve convinced me that those needs are genuine and bonafide. Yes, some of the money goes to support the Foundation, but if you’re going to have an organization, you’ve got to have good people, and they cost money.”

Unlike most colleges and universities that have their own campus-based fundraising operations, the Naval Academy is prohibited by law from soliciting private funds. “We are different from development offices at, say, the University of Maryland,” said Captain Rusty Yeiser ’74, USN (Ret.), the Foundation’s senior director of annual giving. “We cannot, by federal statute, be part of the Naval Academy. We have to raise our own salaries and operating costs. If we don’t, there is no vehicle to seek larger program and project dollars for the Naval Academy.”

Therein lies the power of the Annual Fund. According to Yeiser, “the Annual Fund’s unrestricted gifts allow the Foundation to raise somewhere on the order of six times those dollars in gifts that support specific, vital Academy programs.”

It’s a remarkable leveraging effect that has impressed and motivated some of the Academy’s most loyal and generous donors, including Dan Akerson ’70, who along with his wife Karin made the largest gift in Academy history last year.

A portion of the gift benefited the Annual Fund, which the Akersons have supported at an increasingly high level since the Foundation’s earliest days.

“As I’ve had the opportunity to become more involved in the Foundation’s work and to see firsthand how efficient and successful its staff is in attracting significant additional resources for the Academy, Karin and I have deepened our commitment to it on a personal level,” said Akerson, who first joined the Naval Academy Foundation Board of Directors in 2004 and became its chair in November 2015. “Without those Annual Fund resources, the Foundation, and by extension the Academy, would never have been able to cultivate the relationships and generate the support needed to continue the renovation and expansion of Navy-Marine Corps Memorial Stadium—a project that has been very important to us, hire former National Security Agency deputy director Chris Inglis as the inaugural Robert and Mary M. Looker Distinguished Visiting Professor of Cyber Security Studies, or roll out the next generation of Northrop Grumman’s Voyage Management Software to midshipmen in navigation classes. Those are just a few examples of restricted gifts that have improved the midshipman experience in vital ways in recent years.”

Akerson isn’t the only alumnus and donor with a passionate commitment to the Annual Fund. John Michalski ’60 moved back to Annapolis after retiring from ExxonMobil. He has been active in fundraising with his class and the Foundation’s Annual Fund in particular. “There was no significant fundraising emphasis at the Academy until 2000,” Michalski said. “I’ve seen the impact of what the Foundation has done to improve the midshipman experience and facilities. That would not have come about if we didn’t have the Foundation.”

Impact

Federal funds must pay for the requirements set by the Chief of Naval Operations that are the basis of a midshipman’s education and training, “the core mission requirements necessary to produce an officer at the end of four years,” said Rubino. With the Foundation and Annual Fund money, Rubino said, “the Academy can do those things the federal government can’t pay for, or are at the margin, yet enhance the experience of midshipmen.”

To keep that margin of excellence on the cutting edge, a portion of Annual Fund unrestricted dollars goes directly to the Superintendent to use at his discretion. “Unrestricted funds provide the Superintendent with the kind of flexibility that most university presidents have,” said Rubino. “They give him the ability to help the Brigade in areas that are beyond the mission. Sometimes they’re the source to jumpstart important programs as we transition to appropriated funds.”

Former Superintendent Vice Admiral Michael H. Miller ’74, USN (Ret.), used Annual Fund dollars in 2011 to kick start a cyber warfare program to train midshipmen in one of the most increasingly important areas of national defense. A major area of study has since developed, and this year, with support from funds raised by the Foundation, construction will begin on a cyber building that will allow the program to grow in depth, breadth and integration with other Academy programs. 

Other private gifts raised by the Foundation help support programs that couldn’t exist on the Academy’s federal funding alone, but are nevertheless vital to the margin of excellence. The International Programs Office (IPO), for example, draws an average of 20 percent of its annual budget from gifts by alumni, parents and friends of the Academy. Annual Fund support for the operations of the Foundation enables the ability to raise these funds, which not only increase the number of midshipmen for which the Academy can provide international experiences but also serves to insulate the program from variations in federal support, such as those experienced during sequestration. 

International education and immersion opportunities, a priority for the Department of the Navy, provide opportunities for improving foreign language abilities, developing better understanding of regions and increasing appreciation for other cultures. “Today’s officer will be more effective if he or she recognizes and is comfortable when operating with cultural differences—in other words be ‘adaptable.’ Facilitated international opportunities help our future officers understand themselves in this context,” said Tim Disher ’81, director of international programs. 

Last year, the Naval Academy sent 450 midshipmen abroad to 40 countries, including semester study abroad, language and cultural immersion and foreign exchange cruises. Annual Fund support helped make that happen.

A Giving Culture

Michalski has seen the culture of philanthropy grow among Naval Academy alumni and parents of midshipmen in the years he’s been involved in fundraising. He says the benefits of giving go both ways. 

His class supports a distinguished visiting professor in national security. As part of their responsibilities, faculty members in visiting positions—leaders in their fields with strong connections at the highest levels of government, diplomacy and relevant private industries—bring in experts to engage midshipmen informally on the kind of world they will find after they graduate.

The experience has been eye-opening not just for the midshipmen, but for Class of ’60 members who have been invited to sit in on discussions. “Here were 14 midshipmen sitting around with an ex-Secretary of State asking anything they wanted,” Michalski recalled. “Members of our class walked away flabbergasted. They were saying ‘I wish we had something like that when we were here.’ And the reality is that officers entering the service today will be expected to know more about these events than we did.”

Michalski’s support for the Annual Fund helps ensure that the Foundation will be able to continue to mount restricted campaigns like the Class Giving programs—each of which includes an Annual Fund component along with individual class projects. Michalski has also taken part in an employer matching program. “One reason I give heavily to the Annual Fund is that ExxonMobil has a wonderful three-to-one giving program that’s limited to unrestricted gifts,” Michalski said. “It’s a great opportunity to multiply the effect to benefit the Academy.”

For younger alumni like Lieutenant Commander Matt Kolb ’03, USNR, giving is something fairly new. Kolb made his first contribution to the Annual Fund two years ago after transitioning from active to Reserve duty and a civilian career with LAM Research in 2010. “I had always wanted to donate to the Naval Academy,” he said. “Once I got a chance to settle into civilian life and budget it accordingly, I was finally able to do it.”

Kolb chose the Annual Fund for two reasons. “I didn’t want to earmark my donation for a specific project. The Annual Fund gives the Academy more flexibility in how to use my donation.”

Kolb was also able to take advantage of his employer’s program that matches employee charitable donations. With the one-to-one match, Kolb was able to double his contribution and achieve recognition in the President’s Circle, the Foundation’s leadership giving society.

Like Kolb, Rohit and Shalini Bhagat, parents of a Class of 2019 midshipman, are recent donors to the Annual Fund.

“My wife and I have been quite inspired by the notion of family we’ve been introduced to through the Naval Academy parents’ club,” Rohit Bhagat said. “Given the way our world is evolving, geopolitically, economically, it’s important to ensure these young men and women get as wide an exposure as possible. We want to do our small bit to support and help provide that exposure.”

The role the Bhagats and others play through their philanthropy is vital. “Philanthropy accounts for only about five percent of all Naval Academy funding, but that five percent is extremely valuable to a midshipman’s preparation for service as a junior officer in the Navy and Marine Corps,” said Yeiser. “Every gift that our donors make to support the Academy is made possible by the Annual Fund.”

And increasingly alumni like Kolb are understanding that relationship. “It’s my way of giving back. When I talk to people about donating, I ask them to think about how the Academy shaped their lives. I attribute a lot of what has happened in my life to the Naval Academy. It provided a foundation for my life, professionally and personally. I think of the Naval Academy as an institution—the march-ons at Navy football games, parades on the grounds,” reflected Kolb. “We need to preserve that rich tradition, but we also need to keep moving forward. We need both public and private funds to maintain all of that. A lot of Naval Academy graduates, especially those transitioning to the civilian world, still feel the call of service. We want to be part of that bigger picture to continue to develop midshipmen morally, mentally and physically. Giving to the Annual Fund is one way we can do that.”

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Why the Annual Fund?
“I feel that the time I spent at the Academy and my 10 years in the Marine Corps really set me up for life, and it feels right to give back now, to continue to support the opportunities I had and to ensure that they grow for the next generations. There are a lot of ways to support the Academy, but the reason I focus on the Annual Fund is I can trust that the resources I contribute will go to the right places at the right times. A portion of those funds go directly to the Supe for use at his discretion, and the rest are used to fuel the rest of the Foundation’s fundraising efforts in support of the full range of Academy strategic priorities. While some alumni might feel passionately about something specific—maybe they’re a former athlete who still closely follows the team, or maybe they are associated with the work of a specific area such as the Stockdale Center or Cyber Center—and they feel confident in directing their contributions there. But for many of us, we may not have a particular affinity for a single program, and we may not understand exactly how our contributions might be used. But we do know we want to help support the Academy and perpetuate its mission. There’s no better way to do that than the Annual Fund, where your dollar can go on to generate six or seven more.” 

—Jeffrey Neufeld ’76
Chairman, Naval Academy Foundation Council on Annual Giving
Class of 1968 Senior Military Instructor of Leadership, United States Naval Academy

 

© 2012 United States Naval Academy Alumni Association & Foundation