The Mad River Glen Cooperative has achieved financial stability by going its own way and staying true to its founding mission, but the Cooperative’s weather-dependent annual profits are not adequate to fund the mountain’s long-term capital needs. Other ski areas rely on massive capital investment through sources of revenue such as real estate sales. This model is neither feasible nor in keeping with the Cooperative’s mission, leaving philanthropy as the only realistic option. The Mad River Glen Cooperative is partnering with the nonprofit Stark Mountain Foundation in order to provide a fully-tax deductible channel for all donations. In order to enable thoughtful contributions, pledges can be distributed over a five-year period.
Will the campaign have an impact on lift ticket and pass prices?
The campaign will not have a direct impact on lift ticket and pass prices. Those prices are set each year by the management based on current market conditions and the overall operating budget and projections. Mad River Glen reviews the pricing structure each year and strives to keep pricing affordable as possible while also maintaining the financial sustainability of the area.
What impact will the campaign have on Mad River’s finances?
The campaign will have a positive impact on Mad River’s finances in several ways. Renovations to the Basebox will result in energy savings and enhance operational effectiveness. Improvements made to the Birdcage will allow additional skier services. An endowment will generate annual income that can be used to fund preservation and education projects in perpetuity. The campaign will relieve pressure on Mad River’s weather-dependent operating revenues by funding major capital projects that are in alignment with Stark Mountain’s mission.
Will a major fundraising campaign change the culture of Mad River Glen?
No. All the projects that are being undertaken through the campaign are being completed with an eye toward maintaining the nature and culture of Mad River Glen. In the years since the Cooperative was founded, approximately $4.5 million has been invested in the mountain without significantly changing the culture of Mad River Glen.
Mountain & Terrain
How much longer will the existing snowmaking system last?
At the start of the campaign, Mad River Glen’s snowmaking system was nearing the end of its useful life. Replacing and upgrading the existing system has been one of the first priorities for the campaign. New snow guns were purchased in Fiscal Year (FY) 2015 and 2018, the electrical system was upgraded in FY 2016, the pump was replaced in FY 2018, and piping replacement began in FY 2018.
How much emphasis has been placed on snowmaking in the campaign priorities?
In 2014, management and Board of Trustees conducted a comprehensive study on the feasibility of expanding the snowmaking system. Options that were presented ranged from replacing the existing system, to a major expansion of coverage that would provide top to bottom skiing from the Sunnyside Double.
In addition to significant capital expenditures and very high operational costs, any option that would substantially expand snowmaking terrain requires finding a new source of water and building a storage pond downstream. This option is not currently possible because land in that area is privately held and rights are not for sale.
The current capital plan calls for upgrading and modernizing Mad River Glen’s snowmaking infrastructure in order to make the most of our limited water supply and better supplement our natural snow trails. With additional guns, a new pump, and new piping, the system will be more efficient and able to cover our trails more quickly. The upgrades will also enable eventual restoration of snowmaking to the 2300’ level, which has been out of service due to inadequate pressure from the old pump.
How can Mad River Glen improve skiing on natural snow?
The campaign has funded erosion control work, including numerous new culverts in FY 2017 and 2018, as well as funding a summer trail crew so that the bare minimum amount of snow is necessary to provide skiing. Mad River Glen is also using a number of snow management techniques to make the most of the existing snowfall. For instance, Mad River has created “inventory areas” for stockpiling snow which can then be moved as needed to problem areas.
What is the status of the 19th and 20th parcels?
The Mad River Glen Cooperative does have first right of refusal to purchase the 19th and 20th parcels from the Pratt family. However, at this time, those properties are not available for purchase. The Cooperative board will continue to be in contact with the Pratt family in the event the properties do become available.
How will climate change impact skiing at Mad River Glen without additional snowmaking capacity?
No one knows for sure. It is safe to say that whatever MRG can do to manage existing snowfall, stay affordable, diversify its funding, and collaborate with others in the Valley will improve its ability to remain viable and vibrant.
Buildings & Facilities
What improvements are planned for the Basebox?
There are a number of facility improvements and structural issues that need to be addressed with the Basebox. Those improvements that are structural and will have the largest impact on users have been prioritized, including replacement of the original foundation under the pub; expanding the bathrooms and adding a family bathroom; improving energy efficiency; and expanding the ski school space in the basement.
How will the campaign improve overcrowding in the Basebox?
Within the Basebox, the expansion of the ski school area and the bathroom upgrades/expansion will directly impact the overcrowding situation. In addition, improvements to the Birdcage will provide additional on-mountain services to skiers, reducing some of the Basebox load.
What is the status of the Base Area Master Plan (BAMP)?
The Base Area Master Plan (BAMP) was presented to shareholders in 2013. The shareholders provided a significant amount of feedback regarding the plan and the cost of some of the projects. The Board of Trustees listened to shareholder comments through a series of surveys, shareholder meetings, and interviews. As a result, a significantly scaled back version of the plan has been incorporated into the campaign priorities.
Have increased operating costs and other expenses relating to the upgraded facilities been taken into consideration?
Yes. With assistance from our financial and legal advisors including the Finance Committee and Business Advisory Committee, a detailed business plan has been developed that is cost-effective and realistic.
Youth & Family Development
Do the youth programs really pay off for us in the future?
Yes, unquestionably. Youth programs are the foundation of the future and build loyal Mad River skiers for life. Mad River originated the program of free skiing for kids and the concept was quickly adopted by other, more mainstream ski areas, as they recognized the overall business value of the program. Youth programs also bring the rest of the family to the mountain to ski and purchase mountain services, providing current benefits to the mountain.
Why do we need more space for the Ski School program when it’s only really crowded on weekends?
Youth programs are primarily weekend programs, and the current ski school area is overcrowded and run-down. When seasonal programs are in session, the ski school often cannot accommodate walk-in youth lesson requests, sacrificing additional ski school revenue. If, as we believe, supporting youth programs is vitally important to the mission and future of Mad River, that means supporting the capability to handle our weekend programs in an effective manner.
The goal of $6.5 million is significant. Why does Mad River Glen leadership believe it is possible to raise this through philanthropy?
The Board of Trustees, through numerous surveys and interviews of shareholders, has found significant support for the needs and priorities outlined in the campaign. The Mad River community is passionate and generous. The Board, with the recommendation of our fundraising consultant, has determined this is an achievable target.
Are we running a business or a charity?
Technically, MRG is a business. Ongoing operating revenues are sufficient to maintain safe facilities and terrain, but are not adequate to address deferred maintenance, make improvements desired by the community, or fund all of our capital projects without incurring substantial debt. Philanthropic contributions can address major capital needs in a way that reflects the community’s shared values. The campaign will fund only those capital projects that are consistent with the nonprofit mission of the Stark Mountain Foundation. The successful Single Chair Campaign, which concluded in 2007, clearly illustrated the viability of philanthropy for Mad River Glen.
Will shares be sold as part of the funding of these projects?
Philanthropy will be the primary vehicle, but operating income and share sales will also be used to improve and sustain Mad River Glen. Share sales are a critical component of the overall financial base of MRG. While the purchase of a share is not a tax-deductible contribution, the purchase of additional shares will support capital needs and ongoing operations. The purchase of shares for children, grandchildren, and other family members is a good way to help provide for the future of Mad River Glen and develop the next generation of skiers and owners.
Can Mad River raise the shareholder APR requirement to fund capital projects?
Mad River Glen Shareholders currently have an annual APR (advance purchase requirement) of $200 per shareholder. The APR really only helps with short term cash flow, and not overall profitability, as the APR purchase can be applied to any Mad River product or service, and the overwhelming majority of shareholders spend more than that at the mountain on an annual basis. For the handful of shareholders that do not spend that much, raising the APR would be an incentive for them to tender their shares. Accordingly, the Cooperative cannot rely on raising the APR to increase annual net revenue or fund capital projects.
Why do we need an endowment?
An endowment will provide Mad River Glen with a reliable and consistent source of income that will enable annual capital improvements and maintenance even in off years to maintain and improve the quality of skiing. Once fully funded, an endowment of $1,500,000 will generate approximately $60,000 annually.
How will the endowment be invested? What oversight will there be?
Mad River Glen and the Stark Mountain Foundation explored a number of options to manage the endowment. After much consideration, the Vermont Community Foundation was selected. The endowment will be pooled and invested along with more than $160 million in assets from over 110 other Vermont nonprofits. Over the past ten years these assets have grown at a rate of 7.9%, well over the targeted benchmarks.
What expenses are associated with the campaign?
The Cooperative has hired Demont and Associates to advise us through the campaign. They are working on a fixed fee basis and have an excellent record of assisting organizations similar to ours. Our campaign will be self-funding with total expenses for personnel, travel, promotion, accounting, and counsel running around 12% of our goal, including all the expenses associated with the snowmaking study conducted in June 2014, BAMP planning, and the partnership with Stark Mountain Foundation.
How much should I give?
What you decide to give is your decision alone. We will certainly be very appreciative of your gift, regardless of the amount. Every single gift gets us closer to our goal, regardless of the size. We have set an ambitious goal for the campaign of $6.5 million. To succeed, the campaign will need thoughtful and proportionate pledges from all members of our community. There are a number of ways to give, including multi-year pledges, donation of appreciated securities, a planned bequest, and more. You may contact the campaign to connect with a volunteer and determine a “think about” figure for your consideration, which may assist you in understanding the size of gifts needed to complete the project. However, the final decision is yours to make.
What is the difference between a donation or gift, and a pledge, and why should I make a pledge?
A donation is a single one-time gift made in one single year. A pledge is a multi-year commitment that can be paid with cash, stocks and securities or other assets. In order to meet our goal of $6.5 million, we will need more cash than any of us might be able to give in one year. Pledging permits donors to spread their gifts over a period of up to four tax years, ending in 2021. This offers flexibility for donors and more funds for completing our ambitious initiatives.
Why are we making gifts to the Stark Mountain Foundation?
The Stark Mountain Foundation (SMF) is a critical partner with the Mad River Glen Cooperative on this campaign. The Cooperative and SMF have entered into a Memorandum of Understanding that will allow SMF to act as the fiduciary partner for the campaign, as they did with the Single Chair Campaign. The IRS has classified SMF as a 501(c)(3) public charity so contributions made to the Foundation are tax-deductible for the donor.
What is the timing for the campaign?
The public phase of the campaign kicked off in December, 2017 and the campaign will be soliciting people through April, 2019. Donations can be spread out through 2021. Projects will be ongoing through 2022.
I’m already a shareholder. Isn’t that my contribution to Mad River Glen?
Share and Preservation Certificate sales are a key component of the overall operations and revenue stream for Mad River Glen. However, share sales alone cannot fund all the capital needs of Mad River Glen. In addition to philanthropic gifts, additional share sales will be an important component of the campaign.
How can I contribute to the campaign when I’m feeling uncertain about how much to give?
The campaign has a four-year pledge period, allowing donors to make larger gifts than they would normally make in a single year. The timeline also allows for creative scheduling of payments, reducing the impact your gift would make on your finances in a single year.
Are gifts tax-deductible?
Yes, gifts to the Stark Mountain Foundation are tax-deductible to the extent allowed by law. The IRS has classified the Stark Mountain Foundation as a 501(c)(3) public charity.
Are opportunities for Named or Memorial Gifts available?
Can I make a planned or deferred gift?
Yes, since part of our effort is to build an endowment, the campaign can accept irrevocable planned gifts such as an irrevocable bequest, charitable gift annuity or other planned gift. Please contact the campaign for more information about these gifts, but we strongly advise donors to consult their own financial advisors when making this type of gift.
What is an irrevocable gift?
We generally speak about irrevocable gifts when we are referring to planned or deferred gifts. An irrevocable bequest is a gift that is enforceable on the donor’s estate at the time of their death. All planned or deferred gifts that are irrevocable will be counted toward this campaign.