F&H origins begin with the National Endowment Fund, which was created by the delegates of the 1920 St. Louis Convention. Prior to 1920, a comparable fund had been administered by the Sigma Alpha Epsilon board of trustees in New York, which at that time also managed The Record Life Subscription Fund (established in 1912) to assist with the publishing costs of The Record.
In his book The Era of Levere, Fraternity historian Joe Walt describes the original mission of the National Endowment Fund: “[to] give the Fraternity the financial muscle to expand its program, enlarge its influence, and enhance its prestige.” Past Eminent Supreme Archon Don Almy (Cornell 1895) described the need, stating that “the trouble with ΣAE is that it is 14 percent active and 86 percent dead.” He proposed resurrecting the “dead” by seeking greater alumni support for the Fraternity. So, upon creation of the National Endowment Fund, the Fraternity for the first time actively engaged its alumni to donate money in support of the Fraternity’s general programs. The national endowment was initially established with Founder Members who contributed $1,000; Life Members who contributed $50; and, Annual Members who paid $3 per year. By 1930, the fund had grown to over $115,000 in assets, which in today’s dollars equates to roughly $1.5 million.
With the creation of the Sigma Alpha Epsilon Foundation in 1927 and the plan to construct the Levere Memorial Temple in 1929, a substantial portion of the endowment’s funds was transferred to the Foundation to cover the Temple’s cost of construction. While the National Endowment Fund continued to exist through the years, the related Record Life Subscription Fund was transferred at the 1971 Richmond Convention into what is now known as the Phoenix Account under The Fraternity Laws.
Delegates to the 1993 New Orleans Convention modified the name of the National Endowment Fund to the Fraternity Endowment Fund (or FEF). These delegates also directed the Fraternity to grow the corpus of the fund to $7 million and they approved a Fraternity Law change which mandated that one-third of all undergraduate dues be transferred into the FEF each year. At that size, the Convention believed that the FEF would be able to generate sufficient income to cover the Fraternity’s annual expenses for The Record, Leadership School and the former E&L Consultant program.
However, at the 2001 Orlando Convention, the delegates changed course and endorsed a new Fraternity strategic plan. Among other changes, the new plan spun-off the Fraternity Endowment Fund into SAE Services, Inc., which became wholly independent of the Fraternity organization. Generally, the plan called for SAE Services to become more entrepreneurial and more aggressive with investment opportunities as needed to grow its corpus and to generate income without support from undergraduate dues, objectives which the Convention believed could best be accomplished under this new structure. SAE Services was formed with approximately $3.5 million in assets from the FEF, which consisted mostly of equity investments and loans made to house corporations. In the past decade, F&H investments in housing and the growth of its assets have allowed the organization to provide nearly $1 million in grants to support Fraternity programming.
In 2007, the board of directors of SAE Services changed the organization’s name to SAE Financial and Housing Corporation (or F&H), to better reflect its mission and investment strategy. As composed by the F&H board in 2010, the “vision” of F&H is “to provide a home to every willing chapter.” Towards accomplishing this vision, the F&H board also drafted the following Mission Statement.
The Mission of SAE Financial and Housing Corporation shall be to:
- Build strong chapters through great housing;
- Promote safe, competitive and affordable fraternity housing through property management resources and services;
- Support local house corporations to become financially sound and its volunteers well trained; and
- Through strategic investments, grow the Fraternity Endowment Fund and provide financial support to Sigma Alpha Epsilon Fraternity.
The F&H Mission is accomplished by working with chapters, alumni and house corporations in four distinct, but complementary, offering areas: Housing Development, Housing Management, Housing Loans and Housing Services. These offerings are described below.
Under the Housing Development offering, F&H makes an investment in an existing or future fraternity house which is to be occupied by an SAE chapter. Typically, alumni and the undergraduate chapter members present potential opportunities to the F&H board, which then evaluates the acquisition using multiple underwriting criteria. The decision to add a fraternity house into investment portfolio is heavily weighted on such factors as the chapter’s health and past growth, alumni support of the endeavor (including fundraising), the ability of the property to create a positive cash flow over sustained periods and, more generally, a demonstrated need for F&H assistance with the project. Once the F&H board, the chapter and its alumni agree to move forward, the existing fraternity house (or land for a new house) is acquired by F&H. Thereafter, F&H renovates the existing chapter house or builds a new fraternity house in accordance with the modern dormitory standards required of all F&H owned properties. Among other requirements, these standards include a student housing design that appeals to today’s members, the installation of current life-safety equipment and efficient mechanicals (including air conditioning), reliable internet access in each bedroom as well as WiFi throughout the property and, typically, a meal plan provided by a professional cook in a fully functional kitchen. As of 2012, F&H owns and has in development 9 fraternity houses, with a stated goal of growing its portfolio by an average of one each year.
Housing Management is another core offering. F&H provides property management services through its subsidiary, Greek Housing Management, LLC. This property management program is implemented at all F&H owned properties and is also available to all SAE house corporations who independently own their properties. Greek Housing Management advances the best practices for operating and managing fraternity houses based on the collective experience of the Fraternity, the F&H board and its staff. The cornerstone of the program is a web-based leasing, financial and facilities management system adapted from the multifamily industry. To ensure the success of each of its managed houses, Greek Housing Management requires its undergraduate chapters to employ a live-in house director (or “house mother”) who assists with the daily operations of the facility in accordance with the program’s requirements. The annual fee for Greek Housing Management is based upon the number of chapter members, the number of residents and other financial metrics that impact the program’s cost.
Of course, F&H continues its long-standing practice of making loans available to house corporations throughout the Realm, which fulfills its fourth offering, Housing Loans. F&H typically makes loans to support the installation, repair or upgrade of life-safety systems (for example, fire sprinklers and monitored fire alarms) or to cover a house corporation’s unexpected and unbudgeted repairs which require immediate attention. Generally, the F&H lending limit is $125,000, although most loans are typically less. While the interest rate and repayment terms of these loans are competitive with the market, F&H typically seeks repayment of its loans within 5 years in monthly amounts tied to the property’s rental income. Traditional mortgage loans are best sourced by local banks and brokers who specialize in this type of lending.
Finally, with respect to its fourth and final offering, Housing Services, F&H has developed (and continues to develop) a number of programs that educate, support and recognize the best practices related to fraternity housing. For example, on-line resources are available to house corporations on the F&H website (www.saefandh.com) which provide guidance in many aspects of fraternity housing, including starting a house corporation, running a successful house corporation and fundraising to build or renovate a fraternity house. Additionally, F&H staff can provide consulting to house corporations on topics such as budgeting, installing fire sprinkler systems, successful leasing practices, maintenance of mechanical systems, and so forth.
In continuance of its Housing Services objectives, F&H also works with national vendors in an effort to provide savings to our chapters and house corporations on housing related needs, such as carpet, paint and doors. A current list of vendors participating in this discount program are set forth on the F&H website.
Finally, towards the advancement of better housing within the Fraternity, F&H annually awards thousands of dollars to chapters who participate in its Housing Improvement Contest. Award categories include: Best Interior Project, Best Exterior Project, Best Green Project, Best Community Project and a grand-prize, Best Overall Project. Information about this Contest is provided by the Fraternity throughout the academic year in both printed and online publications.
F&H also recognizes the “outstanding commitment by an alumnus towards the preservation and promotion of fraternity housing” through its Cornerstone Award. In addition to an award plaque, Cornerstone Award winners are acknowledged and profiled in The Record. Nominations for this award are accepted by the Associate Executive Director of F&H. Winners are determined by the F&H board, who grant the award to approximately three recipients each year depending on the number of nominations received.
For more information on the resources and programs offered by the SAE Financial & Housing Corporation, please contact the Associate Executive Director of F&H through the Fraternity Service Center.