What is the Student Management Corporation?
SMC is a not-for-profit purchasing cooperative owned and governed by the fraternities, sororities, small living units, and concessions at Cornell University. As an owner of SMC, you are part of one of the largest college cooperatives in the nation.
In many cases, SMC is a vendor's largest customer, enabling all chapters to receive discounts for goods and services as well as preferential treatment. Vendors want to do business with SMC because of the cooperative's excellent reputation for payment of invoices.
How does it work?
Member deposit
At the beginning of each academic year, a deposit consisting of two months' purchasing history is placed with SMC. This central fund allows SMC to pay all bills promptly, creating good working relationships with vendors and giving them confidence that they will be paid in a timely manner.
Deposits are refunded at the end of the academic year in April and May. SMC holds 15% over the summer to pay for any straggler invoices that come in. Members are billed once a month for all of their purchases with a detailed bill listing all invoices and payment activity. The SMC professional staff is available to answer any questions about your monthly statement and can provide any invoices you may need.
SMC surcharge
Each month, members receive a detailed computerized bill itemizing all chapter purchases broken down into categories such as kitchen, house, social, chapter, and rush. All invoices are kept on file at SMC and each member receives a copy with delivery of goods. The treasurer of each chapter needs only to issue one check monthly to cover all of their house's purchases, decreasing bill-paying responsibilities and problems.
To pay for the office staff and space, all purchases are surcharged at 10%. Any excess profit from discount income, surcharge income, early payment discounts, interest income, and volume discounts is rebated back to the membership proportionately, reducing the amount of surcharge by 1 or 2%. The dollar savings realized by SMC's buying power are supplemented by the valuable time and effort each member saves in managing their operations.
How did SMC start?
SMC was founded by Gary Hedge, a brother from Lambda Chi Alpha. In 1971, several chapters were in financial trouble. Gary's house was one of them — he was the treasurer and the house was almost a year behind in bill paying. Vendors were not willing to do business with the houses, or charged outrageous prices, so most chapters had to purchase from the most expensive vendors on COD terms. Credit was something vendors did not wish to extend to the chapters at Cornell.
Ron Rhoads from Chi Psi first came up with the concept of forming a purchasing group and presented the idea to the IFC. With the help of the Dean of Students, Ron incorporated the buying group under the name Fraternity Managers Association in the spring of 1971. It was this early organization which finally evolved into SMC.
Together with Ron, Gary organized a purchasing group and made deals with vendors who would give him discounts. He had each member chapter deposit funds into separate savings accounts and would show vendors these “passbooks” to instill confidence that the funds were there to pay invoices. This is how the SMC deposit was created. Many vendors still did not trust the chapters, so Gary would get a phone call from vendors on the same day as deliveries and would have to run a check over to a vendor (on his motorcycle).
Gary became the first executive director of SMC with a membership of 20 chapters while he was still a student. After graduating, he served in the position for two years. Particularly noteworthy were the exceptional contributions, support and dedication of the founding Board of Directors chaired by John Zaruka (ATO). Wise counsel was provided for many years by John (Jack) Tewey, Professor (retired) of the Hotel School.
After Gary left, Mr. Eden Slegr (Acacia Fraternity) became Executive Director from 1973 to 1979 while he concluded his studies at the Hotel School. During this time, SMC grew significantly and more than doubled its membership to about 80 small living units, with purchases reaching $1,000,000. Mr. Slegr initiated new programs such as Alumni Services and Financial Services and, with Terry Slegr, oversaw the day-to-day operations, wrote the Stewards' Manual and hosted SMC Food Shows on a regular basis. During this time of growth, SMC became a template for a number of other universities and colleges looking to improve or establish their own cooperatives. The Collegiate Cooperative Buying and Management Association (CCBMA) was started during this period.
During Mr. Slegr's tenure, a number of dedicated SMC Board Members should be noted, including John Burlingame and Joseph E. Lavin, both Chairmen of the Board. Early SMC team members Laura Chacona and Julie Copenhagen contributed valuable support, as did Terry Slegr, Assistant Executive Director, whose tireless efforts were instrumental in SMC's development. When Mr. Slegr resigned to take a position in California, Terry was appointed interim Executive Director and remained in that position for several months.
Eden Slegr lives in California, where he owns and directs an executive search firm for the hospitality industry: Global Hospitality, Inc. In 1998, he co-founded Hospitality Careers Online, Inc. (hcareers.com), served on its Board of Directors, and consulted extensively on operational and Internet marketing initiatives. Terry Slegr is an Executive Recruiter with Global Hospitality, and both Eden and Terry enjoy visiting SMC whenever they are in Ithaca.
Gary Hedge is a business consultant who also lives in California. He often visits the staff at SMC and created a DVD explaining how SMC began.
Today, SMC enjoys purchases over $2.5 million and is the second largest college cooperative in the U.S.