Eating club assets rise despite recession
The assets of the 11 eating clubs jumped by nearly $15 million over the course of the recession, according to the most recent tax returns filed by the clubs. This substantial increase in combined club assets may reflect the recent slew of capital campaigns undertaken by some of the clubs on the Street.
The eating clubs reported total net assets of over $35.8 million at the end of fiscal year 2011, a figure that is more than twice their pre-recession record of $17.2 million in total assets for the fiscal year 2008, which combined with the $4.2 million in assets held by Cannon Club, which was not an active club in 2008, brings the total pre-recession asset size of the Street to $21.4 million.
Cap & Gown Club and Tiger Inn, whose combined assets make up almost one-third of the total $35.8 million and both recently concluded long-term clubhouse renovations, experienced the largest increases in total net assets. Terrace and Ivy Clubs ranked third and fourth in total percentage increase in assets over the four-year period.
Only two clubs — Cannon and Quadrangle Club — saw losses in net assets during that time period. These assets, however, may not be a comprehensive reflection of the clubs’ financial health, according to the clubs’ graduate board treasurers.
Every year, the clubs report their total assets to the Internal Revenue Service in a Form 990, which is required for nonprofit organizations and made available to the public for all tax-exempt entities. As social and recreational clubs, eating clubs meet the IRS requirement for tax exemption.
In addition to these assets, the Princeton Prospect Foundation holds assets that all the clubs share to provide club members with financial aid, among other services. Charter, Ivy and Cottage also have separate endowments that are not included in the clubs’ Forms 990. In 2011, the Princeton Charter Foundation reported $795,000 in net assets, while the Ivy 1879 Foundation held $470,000 and the Cottage 1886 Foundation held $430,000.
Due to these external funds, assets reported in a Form 990 do not necessarily reflect the total net worth of a particular club. However, the data reported on the Forms 990 do include annual donor contributions and property values, which comprise a large percentage of reported net assets.
According to Cap Graduate Board Treasurer Liam Morton ’02, the timing of the Cap’s capital campaign — launched in March 2007 — coincided nicely with the University’s five-year Aspire campaign.
Cap’s capital campaign exceeded its original $5 million goal, Morton said, though he declined to share the exact results of the fundraising efforts. By the fall of 2011, the club had received donations from 47 percent of its alumni and 54 percent of undergraduate members at the time, according to the club’s newsletter.
Cap’s forms reveal a substantial increase in assets since 2009. Member and alumni contributions quadrupled over that period, while total property and equipment values jumped nearly seven-fold. According to Morton, Cap’s most recent renovations constitute its largest project to date.
“We replaced the roof about 25 years ago, but since then it’s been kind of on a project-by-project basis. There hasn’t been anything anywhere close to this scale in the past,” Morton said.
Renovations to the clubhouse included the addition of a new wing, which included a new event terrace, a restored sun porch and a larger roof terrace that is nearly twice the size of the original.
TI’s capital campaign also occurred largely concurrently with the Aspire campaign.
TI’s most recent capital campaign raked in similarly large sums. According to TI Graduate Board Treasurer Eric Pedersen ’82, TI is only $50,000 to $100,000 away from its target of $6.5 million.
“This is by far the most extensive capital campaign TI has ever undertaken,” Pedersen said.
Funds raised by TI’s capital campaign went toward a full-scale renovation of the clubhouse, including a larger dining room that holds 132 seats instead of the previous 72, an expanded and refurbished lower level and an upgraded air conditioning system. No loans were taken out for the project, which was funded entirely by donor contributions, Pedersen said.
Despite fundraising setbacks experienced during the recession, all clubs besides Cannon and Quad have seen positive growth in total assets over the past four years. Quad’s net assets have decreased by about $150,000 over the past four years, from more than $1 million to slightly less than $900,000. Cannon’s assets have declined by about $1 million, from just more than $4 million to $3.2 million.
Although slight decreases in assets are not unusual for a nonprofit club over a short period of time, Quad’s recent decision to lower membership dues may indicate concern about the club’s financial stability. Quad Graduate Board Chairman Dinesh Maneyapanda ’94 told The Daily Princetonian in January that the fee reduction was intended to attract sign-in candidates who might not have otherwise joined Quad. Maneyapanda declined to comment for this story.
Cannon accepted dues-paying members last fall for the first time since closing its doors. Major renovations to the club’s downstairs taproom, ground-floor dining room and residential quarters have nearly doubled the value of the clubhouse despite the fall in assets. Cannon currently has the fourth-largest total assets of all the clubs.
Cannon Graduate Board Treasurer Timothy Burman ’64 did not respond to a request for comment.
According to Charter Graduate Board Treasurer Adam Kait ’84, capital campaigns recently launched by the eating clubs reflect a desire to attract more students to the Street and to certain clubs in particular.
“In this business, sometimes you sort of have to do what you have to do,” Kait said. “A club is going to have a strategic plan, they’re going to assess what they need to be competitive and compelling to the students, and then go in the strategic direction they’ve chosen.”
Charter has completed a number of renovations over the past few years, including upgrades to the second-floor dining room, TV room and student lounge. Although no plans have been finalized, Charter expects to launch a capital campaign in the near future to fund possible clubhouse expansions, Kait said.
Morton said improving the experience for current members, not attracting more bicker candidates to Cap, was the motive for the renovations. Over the past five to 10 years, Cap has seen a fairly steady membership base, he said.
Pedersen said TI’s renovations were motivated by similar goals.