Business Plan
Last revised 7 November 2008
Introduction
The Detroit College Promise is a scholarship program that, when fully funded, will be offered to every Detroit Public School (DPS) student. It aims to improve the Detroit Public Schools by encouraging DPS parents and students to plan for a college education, and by encouraging those with college aspirations for their children to move into Detroit and attend the Detroit Public Schools. Thus, it will serve two important purposes - to transform Detroit into a center of brainpower with a high proportion of college graduates, and to promote economic development for Detroit and the region. It is modeled on the much lauded Kalamazoo Promise, but with one important difference - we are raising all of the scholarship funds ourselves. This program, as illustrated in Kalamazoo, has a proven track record of generating hope and excitement, increasing public school enrollment and motivating people to move into the city. To our knowledge, no other program in Detroit, current or proposed, can claim these accomplishments. As described below, we plan to begin our program in the next few months with the 2009 graduating seniors at Cody High School.
Website
Our website at www.DetroitCollegePromise.org is designed and maintained to contain all information needed by scholarship applicants, parents, contributors or members of the public. It contains the current scholarship application and acceptance documents, a list of frequently asked questions (FAQ), a current list of Donors and Endorsements, information on making a contribution, and organizational news. We update regularly.
Executive Director
The Executive Director of The Detroit College Promise is Nat Pernick, M.D., a pathologist and attorney who started this nonprofit in early 2008 (see Curriculum Vitae). The Detroit College Promise is also sponsored by Pernick’s for profit business, PathologyOutlines.com, Inc. Pernick is a third generation Detroiter whose father, Larry Pernick, of blessed memory, was active in politics as an Oakland County Commissioner for 29 years. Pernick himself served as a Board Member and Vice-Chair of the Oakland County Community Mental Health Services Board during 1988 to 1994.
As an attorney, Pernick owned his own law practice focusing on commercial litigation and collections for over 20 years, and served as a Special Assistant Attorney General representing the State of Michigan under Attorneys General Frank Kelley, Jennifer Granholm and Mike Cox. Pernick has also worked as a self-employed computer programmer / consultant since 1974 for various organizations, including the University of Michigan Hospitals, the National Institutes of Health and Blue Cross Blue Shield of Michigan. Pernick is also a board certified pathologist in anatomic and clinical pathology. In 2001, he created a new type of reference for medical professionals - a comprehensive, online textbook with regular updates and links to images and additional references. This publication is also unique in that it is absolutely free, and is entirely supported by advertising. Pernick currently owns and manages websites for pathologists and laboratory personnel - www.PathologyOutlines.com, attracting 200,000 visits each month, and a new website for dermatologists - www.DermatologyOutlines.com.
Board of Directors
Our Board is not yet complete. Current members include:
· Brooke Franklin - Project Director, Detroit Regional Chamber of Commerce.
· Alvin Levett, Executive Director, University Budget, Eastern Michigan University - retired.
· Margo Pernick - Executive Director, The Jewish Fund; previously Grant Officer for the Kresge Foundation and on the Executive Staff of the Jewish Community Center of Metropolitan Detroit.
· David Sabbath - Director of Finance, Garan Lucow Miller, P.C., a Detroit law firm.
· Lora Weingarden - Assistant Prosecutor, Wayne County (child abuse section).
Partners
Current partners of The Detroit College Promise include the Detroit Regional Chamber of Commerce, Communities in Schools, The Skillman Foundation and the Northwestern High School Success Project. We are pleased that Brooke Franklin, a Project Director for the Chamber, is a member of our Board, and is helping us make connections with other agencies. The Chamber has also provided us information to help us negotiate discounted tuition with colleges and universities, particularly in our early years. We are also partnering with Communities in Schools in Detroit, which has extensive experience in helping high school students with college preparedness. We have met with The Skillman Foundation, and plan to begin a pilot program at Cody High School, which they suggested, since it is part of their Good Schools, Good Neighborhoods program. Another partner is the Northwestern High School Success Project. We plan to develop a Promise type program for their students, funded in part by their established business and nonprofit partners. We have also met with the Detroit Public Schools to discuss how we can work together. We also plan to partner with a research institution to analyze our data and our program’s impact on the regional economy. We look forward to setting up partnerships with other organizations as well.
Scholarship information
We plan to begin our scholarship in the next few months with the 2009 graduating seniors at Cody High School in Detroit. We have met with Cody staff, and they are excited about the program. We are currently trying to raise as much money as possible to fund the scholarships for these students as fully as possible. Details of this pilot program will be forthcoming.
Overall, our mission is to provide scholarships for Detroit residents enrolled in the Detroit Public Schools to attend Michigan public colleges and universities. Our scholarship philosophy is based on simplicity and inclusiveness. The scholarship application and scholarship acceptance forms are each one page long, requiring at most 5 minutes to complete. All necessary information about the scholarship is posted on our website. Our staff is also available to answer questions. We believe that making the scholarship application as simple as possible will motivate more students to apply to college.
Our philosophy of inclusiveness is illustrated by our minimal scholarship requirements, which are: (a) graduation from a DPS high school, (b) continuous enrollment in DPS for at least 4 years prior to graduation, and (c) continuous Detroit residency for at least 4 years prior to graduation. Transcripts or report cards are required, but only to confirm DPS enrollment and Detroit residency. There are no financial aid requirements, no academic requirements and no essay requirements. Of course, the student has to be accepted to a Michigan public college or university.
To continue the scholarship, after each semester, recipients must demonstrate that they are in good standing, that they have successfully completed 12 credit hours in the prior semester, and that they have a cumulative grade point average of 2.0 or higher. If they fail to do so, the scholarship will stop until these requirements are met. The scholarship is available for ten years following the student’s graduation from Detroit Public Schools, unless interrupted by military service.
Our scholarship provides “first dollar” payments for tuition and mandatory fees. This means that our dollars are paid to the colleges and universities regardless of any other financial aid that the student is eligible for. The first dollar concept is preferred by students, parents and the colleges / universities themselves, because it is so easy to anticipate and administer. It also requires much less administrative work by our organization. We believe that this approach, which lets all students know their scholarship funding early in the process, will motivate more students to go to college, which is our central purpose.
The overall process of administering the scholarship is relatively straightforward - the Kalamazoo Promise itself, with 500 scholarship applicants each year, requires only one full time staff. Although our program will have more annual scholarship applicants when it covers the entire City of Detroit, we anticipate that staffing will still be modest.
Scholarship costs
The annual cost of the program depends on several factors, some of which will change as The Detroit College Promise improves student educational behavior. We anticipate beginning the program with a pilot high school whose principal and staff will agree to promote the scholarship. According to The Kalamazoo Promise, the average cost for tuition and fees for scholarship recipients is approximately $5000, because most scholarship recipients attend community colleges. Thus, the estimated cost for 100 scholarships for the first year would be 100 x $5000 or $500,000. However, even if we fund 100 new scholarships recipients per year, at some point, we will actually have to fund 400 scholarship recipients, because each recipient is funded up to 4 years. Thus, this would cost $2 million a year. Our endowment fund, based on a 4% payout, would need $50 million in assets to generate $2 million annually in perpetuity. However, we plan to negotiate discounts with colleges and universities, which should reduce these amounts for the initial years.
Over time, we anticipate that due to the success of The Detroit College Promise, the scholarship costs will continue to increase because: (a) the high school graduation rate will increase to 90% or more, due to a reduction in the dropout rate, (b) the percentage of students going to college will increase to 80-90%, (c) more students will move into the Detroit Public Schools from private schools, charter schools or home schooling, (d) more students will move into the City of Detroit and into the Detroit Public Schools to take advantage of the scholarships, (e) students will prepare earlier for college, and choose to attend more expensive universities and not community colleges, and (f) college costs will increase more than inflation, as in the past. Thus, our fundraising efforts will need to continue, even once the program is funded citywide. On the other hand, the experience with the Kalamazoo Promise and similar programs is that they generate tremendous enthusiasm, and once the program begins, even at a pilot high school, additional financial support should be easier to obtain. In addition, Detroit has a historically generous business, non-profit and philanthropic community, which we anticipate will support our program as it expands.
Organizational expenses
The Detroit College Promise will initially have NO expenses, other than the scholarships themselves. This means that 100% of all donations and grants will be used for scholarships. PathologyOutlines.com, Inc., a for profit corporation owned by Dr. Pernick, will pay all expenses for The Detroit College Promise, including staffing, rent, utilities, postage, fundraising expenses and other office expenses. These in kind contributions are estimated to total $70,000 to $100,000 per year. In addition, PathologyOutlines.com, Inc. has pledged $25,000 in cash towards the scholarships themselves. We may apply for grants from non-profits that have indicated a willingness to pay for operational expenses but not the scholarships themselves.
Financial standards
We plan to adhere to the highest standards of financial accountability. Our board has two financial experts who will guide us in this regard, as will our attorneys and accountants. In addition, we will have annual audits. However, as a practical matter, our finances are simple. All contributions will go to our current fund or endowment. Funds from the current fund will be sent directly to the colleges or universities for tuition, and any refunds will return to the current fund. No money will be paid to parents, students, DPS, board members or any other entity. In addition, as indicated above, none of our donations will be used to pay for organizational expenses, at least initially, because all of these expenses will be paid by PathologyOutlines.com, Inc. We may have in-kind contributions from other businesses, and may generate some income for organizational expenses by an affiliate relationship with Amazon.com or by selling T shirts or other like items.
Contributions and grants
We are currently seeking pledges of financial support from individuals, businesses and non-profits to pay for one or more scholarships @ $5000 each scholarship. We also seeking at least 1000 donors of $25 or more, which will help convince the business and non-profit community that we have widespread support, and will also make more local residents feel committed to the program. To date, we have 75 pledges totaling approximately $50,000.
Projections of funding needed
The funds needed for the scholarship awards are reasonably ascertainable, once the number of scholarships to be given is determined. The total funds needed is calculated based on the costs for new applicants plus the costs to continue the scholarship for current recipients who have not exhausted their award. The costs for new applicants can be estimated based on college preferences in the scholarship application form, the colleges chosen in the scholarship acceptance form, and historic data. The continuation costs per student will be similar to those for the current semester, adjusted for tuition increases, changes in any funding agreements with the college/university and possible movement into upper class (junior or senior) rates.
Projected funding shortfalls, if they occur, will most likely be due to the success of the program, as an increasing number of scholarship applicants will lead to higher total tuition expenditures. Under these circumstances, requesting additional donations is likely to be successful.
Additional information
To encourage and generate excitement about reading among DPS students and parents, our website contains a Book page, which lists the Caldicott and Newberry award winning books. We also plan to list “favorite books” by local celebrities. Books are linked to Amazon.com, which not only has various discounts, but also pays us a small percentage of the purchase price when books or other items are purchased after navigating through our website.
For additional information, please contact our Executive Director, Dr. Nat Pernick, at 248/646-0325, or NatPernick@Hotmail.com.
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