Between Us

by Gil Gerald

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I choose to communicate this message via closed group in social media, if there is such a thing, and via a post in the members only section of our website. I am hoping for open and honest discussion. I also do so on behalf of myself only and not as an officer of DGT Alumni Association. In that way I hope to represent only my own views, however informed or uniformed by my roles within DGT leadership over the past nearly eight years. I am concerned that we are stalled at a kind of impasse and my own involvement in a small group of volunteers will run out or be significantly diminished within the next 24 months before I physically move back to California to live in permanent retirement.

There are keywords that I would use in connection with this communication. They are ‘relief,’ ‘renewal,’ ‘input', ‘suggestions,’ and ‘contacts.’ In other words, these terms help me form an organization of the thoughts I wish to share with you.

Relief and Renewal — Much success needs to be acknowledged regarding the efforts of a relatively small crew of DGT Alumni, but I ain’t too proud to admit it, I am/we are tired and all have our very human limitations. This admission is not to be found in any of our minutes, you won’t find that admission there, but only hear it in private small talk, between ourselves. I am taking this reality ‘out of the closet.’ As a group we don’t want to jinx things after so much effort. However, I believe we must face and act on truths. Seven has been the magic number for conducting business since January 2013. When seven are not present we’ve used a parliamentary procedure, meeting as a committee of the whole, to conduct business. There is no other reason than the fact that the number seven was stated in the by-laws and that is one document, in need of revision, and the process of revision has been on the back burner. Personally, I think it was a godsend that the quorum was not set higher. The number of Board members has been five for the same reason. When I walked in the doors in 2012, for only the second time since I graduated in 1974, a period of 38 years, I found a dedicated group of individuals scrambling and making progress in saving the property seeking answers for the future course of DGT since undergraduate pledging ended sometime in the 2005-2006 period as I understand it. Looking back now, I believe I personally overestimated the available and interested bodies able to commit over-time. Bro. Jon Levy had an idea, which has blossomed into present day Gallery House, but for which important challenges remain. I met with Jon privately in late 2012 knowing full well he had little reason to trust someone who had been absent for practically four decades. I was ambivalent about Gallery House but yet believed whatever we did needed to be reflected in a carefully thought out and documented plan, a rationale grounded in objective information about the market and environment for such a program, a strategy for obtaining member support, and an organization to carry it out and sustain it. I committed to building the organizational piece while supporting Gallery House. It was the deal, yes, my proposal for injecting additional leadership I felt was needed. I asked him to help me identify potential Board Members. I had been away a long time and I was not confident that I would be good at that. Of the original five who committed to do this within the first couple of years, three remain, Bro. Tom Fiorella, Bro. Tom Wong and myself. We’ve succeeded in always recruiting or retaining an additional two every year. Nominations for 2020 will occur in October 2019, and the election of a new Board will take place in January 2020. In acknowledgement of our successes since 2012, I would volunteer that: 1) We obtained re-financing for the house which was under a foreclosure threat DGT disputed; 2) We developed a framework of goals and objectives — a five year strategic plan which has been updated for another five years; 3) We have managed the implementation of six semesters of Gallery House since fall 2015, and there are currently six applicants for fall 2019; 4) We re-established relationships and ongoing communications with Alumni Affairs, Student Affairs, and the President’s Office at Pratt Institute, and we have a strategy that will possibly lead to Gallery House being recognized as a Pratt student group, receiving funding and a faculty adviser; 5) We established an organizational structure with a 501 (c)(3) arm, under legal advice, that was responsive to current NY State non-profit law and also current IRS regulations; 6) With the help of a CPA firm, we rectified delinquencies, going back years, by filing tax returns going as far back as we could and working under tax amnesty provisions for New York State and New York City; 7) Through the contracting out of bookkeeping services, we have maintained the practice of maintaining financial records consistent with generally accepted accounting principles (GAAP); 8) We have a set of Internal Controls, as recommended by the New York State Attorney General’s Office, with one copy for each board member, that has been reviewed and updated, at least annually; and 9) We have invested significant resources in refurbishing and making repairs and improvements responding to the programming needs of Gallery House, NY City code requirements, tenant safety and comfort, and systems replacement needs. On the opposite side of the ledger, in my personal estimation we have fallen short in carrying out programming and outputs (e.g. website, reunions, etc) that meet the needs or desires of Alumni. Ideas are not in short supply. Many ideas have been conveyed and documented through out strategic planning effort or a special program planning committee that produced a report in 2018. Five Board Members cannot engage in carrying out fiduciary responsibilities, doing the governance piece, and also the program piece while they also pursue family and professional goals and commitments. Personally, I can’t. Hopefully, as all of us move towards making commitments and decisions regarding 2020 and beyond we all evaluate our ability to lend a hand and renew leadership at DGT. Fortunately, we have reduced the level of crisis and need for engaging in meetings. For the first two years we were meeting, physically at the House, every month. This was reduced to quarterly meetings, with telephone, email, texting, and web conferencing communications now the mode for management as needed between meetings. We even have a current Board member living in Europe. With today’s technology it has become possible for remote participation in the governance of DGT Alumni Association. I personally believe in term limits for Board Members to avoid burnout and inevitable ‘dead wood.’ For these reasons, care has been taken to develop and maintain documents such as internal controls and a Gallery House Manual to ensure that we maintain and not loose organizational capacity and memory as we renew leadership. Basic organizational housekeeping has been systematized and manualized. The wheel does not have to be reinvented nor are archaeological expeditions required.

Input and Suggestions — While we have lots of ideas, as mentioned in the previous section, Input and suggestions should always be welcome in an organization. They could be as simple as commentary and reaction to posts like this one, or they could be a phone call or email to one or more of the Board Members. Better yet is active participation in meetings. One consideration is including how your suggestion might be implemented given the burnout described earlier or the need for additional personpower. The key need DGT faces is capital. The question is being implicitly called: Do we fold up the tent and shut down, or do we continue in some other form? Since 2014, now five years ago, we’ve identified the need to obtain at least $1.25 million in capital to renovate 272 Clinton Ave, including historical restoration work on the exterior and in key interior spaces in the building. The price is likely higher at this point. Essentially two options, with additional variations of each are under consideration by the DGT Board. The first is donating the $3 million property or the proceeds of its sale to another non-profit including possibly Pratt Institute, as part of dissolution of DGT Alumni Association, as is required by state and federal tax law for non-profits. The proceeds could go to DGT Foundation, a legal charity, which would then be endowed to continue Gallery House or another charitable or educational program such as scholarships. The second option is a 99 year land/ground lease to a developer to improve, renovate, manage, and obtain income from the property with an agreement for partial use of the property (say Main Floor) by DGT as a condition of the ground lease agreement. As is customary, at the time of execution of the ground lease agreement the developer would pay the owner (DGT in this case) a fee of roughly 50% of the market value of the property, which is at least now $3 million. The $1.5 million could be placed in an investment account providing annual investment income for DGT to use for program. It would be helpful to hear responses from the membership about these options. What is your response? It is taking time, and will take time to find a developer. However, the question will have to be called sooner or later. We take in about $100,000 a year and spend $100,000 a year 90-95% on operations with practically no net left for capital improvements or additional financing. The structure is more than a century old and in need of significant capital improvements. If the answer to the called question is dissolution of DGT, then this should be done in an orderly manner that doesn’t leave a mess for someone to pick up as they are abandoned holding the bag. As a member with current legal fiduciary responsibility, I insist we act proactively. I do not wish to be a party to the current Board splitting within the next 24 months and handing over the holding of the bag in a crisis to any brother or sister or group of members. Struggling against being an alarmist, I am personally asking for your input and help, confident that the talent is there and possibly more resources and volunteer bodies.

Contacts — The Board favors the second option mentioned above, the seeking and finding of an appropriate developer for a land/ground lease agreement. Some of you actually work in real estate and real estate development, in architectural firms, or other business endeavors that might be helpful to the effort of finding a developer. One lead has not turned out to be good one for DGT. We have secured recommendations for attorneys experienced in representing the property owner in drawing up and executing such agreements. One Brother, Lance Bottari, recently suggested to me that Alumni could possibly organize as an LLC that is the developer and secure investors from within and outside of the DGT group. Perhaps this is something that might appeal to a sufficient number of members. Let the DGT Board know of your interest. It may, in my personal view, represent an ideal. Perhaps, within the personal circles, of one or more members there are persons with the capacity to make major donations to the DGT Foundation, sufficient in the aggregate to meet the capital needs for renovation and restoration work. In that case, it is possible that the deed could be transferred to the DGT Foundation and for these major donors to obtain the tax benefits that may make their generous donation more likely. A business model for the DGT Alumni Association would have to be developed that is dependent on dues but is free of the costs of maintaining the building. It would be helpful for larger group-think about these alternatives. Could you think about your own answers to these questions and share them? If you have contacts, such as potential developers who may be interested, or names of members or non-members who could invest in an LLC or who could donate in six figure amounts, please provide that information to one of the officers, Tom Fiorella, Asa Camnert, Tom Wong, or myself. We would work with you in helping to secure the donation. That would be very helpful at this time. With that, I wish to thank you for being a very important part of my life—It’s Great to Be DGT.

Bro. Gil Gerald

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