Original Query: From: R. Stark, VIVA, Denver University, Denver, CO.
Our sponsor is a private school that considers our program as an income source for the university. Their requirement is that we pay in excess of 32% of our gross annual income to support other university activities. In return for this we get no facilities and very little other support that we are not required to pay separately for. Debbie Rodgers could not think of any university sponsor that takes this position. The burden damages our ability to improve and grow. Any suggestions or comments other than the obvious?

From Polly Nelson, VIVA!, University of Denver, Denver, CO.
RStark--Your question to the Forum is misstated. Anybody reading that the University requires us to "pay in excess of 32% of our gross annual income to support other university activities" would conclude of course that that is all wrong. If, however, you asked a question about overheads, I think you would find that every last one of the university-sponsored LLIs pays overhead expenses to the sponsoring university.

Granted that there are adjustments that should be made in that 32% overhead--those are matters to be negotiated between us and the university. Don't scuttle it before the talks even start.

Regarding our relationship to the university, we would not have succeeded as we have without them. We would not succeed in the future without them. And with the current reorganization of the University, VIVA! now has the opportunity to develop a broader working relationship with the university--let them earn all of that 32%, if you will--without changing the basis of VIVA! We are a self-governing organization with control of our own curriculum, and will remain so.

Don't scuttle that opportunity before the talks start either. My question to the Forum has to do with surplus funds. There is a surplus after expenses (including overheads) that presently goes into the university's general fund. Shouldn't that money go into a reserve for VIVA! purposes only? Is there somewhere a legal requirement that a non-profit organization such as we are can spend its money only for its own benefit? What have other LLIs done in these circumstances?

From Dick Vernon, LLI at Baldwin-Wallace College, Berea, OH.
I am intrigued by your situation, but several questions occur to me that beg for answers before a response is possible. Some of the questions in the order they came to me are: What specific benefits does your LLI get from the sponsor? What is the approximate dollar amount your LLI gives to the sponsor each year? What benefit(s) other than financial does your LLI provide to the sponsor? What were the expectations of your LLI founders and the sponsor in the beginning? Do the LLI members independently operate the LLI program and administrative activities or are they sponsor managed/staffed? What benefits might the sponsor provide to your LLI to satisfy your expectations? Are these compatible with the sponsor's situation and priorities? Do you think these benefits would be reasonable to you if you imagined you were the president of the sponsor? I'm sure there are more factors that would be helpful to understand your situation, but these are the ones that occur to me spontaneously.

From Robert Stark, VIVA, Denver University, Denver, CO.
According to the university accounting officer we're required to pay 32% of our $18,000 gross revenue for something like "faculty support and classroom maintenance," neither of which we use. This totaled (rounded) $16,500, the $1500 balance was for unspecified expenses, hence the description of "in excess." I have talked to programs at Duke, American University, U. of Minnesota (Duluth) and have found them paying direct expenses but not general overhead expenses of this magnitude as such. Duke (a program 3 or 4 time our size) pays the same total that we do, but gets in return a total classroom building, the ability to keep their annual surplus, and their own reserve fund. I would like negotiations with the university to be successful. It's a prestigious resource. Given our successful independent operation I don't see what they can offer us for that amount of money, and more in the future as we grow, that we need. The problem apparent to me is that our sponsor sees us as a profit center primarily, not for our value as a highly visible community outreach program that reflects well on them. Rather than scuttling, I'd like to achieve a consensus for a reasonable position that will cement our relationship with relief from these unwarranted charges and let us establish an independent reserve fund as many other LLIs have done.

From Richard DiVecchio, Lifetime Learners Organization, Norwalk, CT
There surely must be a public institution in Denver that can accomodate your organization. I suggest contacting a local community college as a pretty good alternative.

From Dick Vernon, LLI at Baldwin-Wallace College, Berea, OH
First, Baldwin-Wallace College (BW) a small private institution, does not charge our LLI any overhead fees. We are charged for only the services we use just as any other department is charged those costs for printing, mailing, copying, etc. Any additional monies we give to the college are voluntary contributions determined by our LLI organization which is independently run by our members. We are most fortunate to have BW do our bookkeeping for us, at no fee, incidently and they write checks to pay our bills! And we do carry over any remaining balance from year to year in our BW account. As far as I know, we are treated the same as any academic department within the college; this leads to your question about carry over. If you have money left over after expenses each year, is there really a practical problem? I suspect all academic departments in your institution also "lose" any remaining balance each year. Doesn't the problem become practical only when you want to have some extrordinary expenses in a given year? How do the academic departments plan for extraordinary expenses and will the sponsor treat you the same as the other departments for such conditions? It seems to me that there are at least two workable approaches: 1) the LLI is allowed carry over and must operate within its own account balance, or 2) the LLI does not carry over any funds from year to year, but the sponsor then must provide for extraordinary expenses on occasion. I imagine the second approach is much more challenging with the competition for funds within the institution! If you have to resort to legal determinations, I suspect the relationship with your sponsor is in serious trouble.

Incidentally, I developed a new insight when the president of our college very politely pointed out to me that our LLI's gross yearly income was somewhat less than the tuition paid by two undergraduate students!