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Topic: A sure sign of Fall
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The Optimist
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Posted: 9/19/2012 1:35 PM
L.C. wrote:expand_more
Good point, Ted. I should have included that, too.

...  I would venture to guess that they'll make more frequent trips to Athens, and will have less resilence in donating to athletics because the culture is changing.  ...


Ah, but there is the fear of the athletics haters. They fear that people will replace donations to the general university with athletics donations, exactly what they don't want to happen. My suggestion is that people will be more likely to donate not only to athletics, but also to the University as a whole because they have a closer connection to the University, and regular visits to Athens.

Steve Hays has a right to be scared, I do not plan on donating to the Classics and World Religions department.  I guess his mistake was thinking I ever planned on it...  He'd be misguided to think I won't be donating to Ohio University on the academic level.
L.C.
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Posted: 9/19/2012 4:21 PM
In the minds of Athletics haters there is a finite pot of money that will be donated to the University, and any money given to athletics will cause a decrease the money given for other purposes. That is one possibility, of course. Another is that in the absence of an athletics program, many alums would lose contact with, and loyalty to their school. Then, when time for giving came, they might give to another cause altogether. The truth is probably somewhere in between these extremes.

What conclusions do observable facts lead to? It would be interesting to do a comparison in general fund donations at various schools, both with and without football programs. It seems to me that the top football powers also have healthy giving to their general fund, a fact with doesn't support the idea that athletic giving decreases general giving. Note, though, that if a school had an unusual fund drive related to athletics, it very well might have a short term negative impact. For example, if Ohio tried to raise money to replace Peden with an all new stadium, and tried to raise $65 million, it would be surprising if there wasn't a short term negative change to general giving.

Another way to try to discern what the impact of athletic programs is on general giving would be to look at schools moving from FCS to FBS, and see what happens to their general giving. Does it go up? Or down? What about schools like Ohio that become more successful? Obviously athletic giving goes up when you are winning, but what about general giving? Has that gone up or down more than peers in recent years?

I decided to do a quick check myself to see how giving to the general endowment in the MAC correlates to winning. Here is the percentage change in endowment from 2010 to 2011 for various MAC schools, plus the 2009 winning percentages in football:
NIU +29.5%, 54%
CMU +27.9%, 86%
Toledo 21.8%, 42%
Ohio +21.2%, 64%
Bowling Green +19.4%, 54%
Temple +19.2%, 69%

Akron +19.1%, 25%
EMU 18.7%, 0%
WMU +17.6%, 42%
Miami +15.8%, 8%
Buffalo +15.4%, 42%
Ball State +9.5%, 17%
Kent - no data, 42%

Excluding Kent since I have no data, the six schools with the highest growth in endowment had a combined football record of 49-30, a 62% winning record, and only one had a losing record. The six schools with the lowest growth in endowment had a combined football record of 16-56, a 22% record, and none had a winning record. This data would strongly suggest that winning in athletics not only increases athletic giving, it increases general giving to the endowment as well.
Last Edited: 9/19/2012 4:28:16 PM by L.C.
D.A.
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Posted: 9/19/2012 9:13 PM
The Optimist wrote:expand_more
Good point, Ted. I should have included that, too.

...  I would venture to guess that they'll make more frequent trips to Athens, and will have less resilence in donating to athletics because the culture is changing.  ...


Ah, but there is the fear of the athletics haters. They fear that people will replace donations to the general university with athletics donations, exactly what they don't want to happen. My suggestion is that people will be more likely to donate not only to athletics, but also to the University as a whole because they have a closer connection to the University, and regular visits to Athens.

Steve Hays has a right to be scared, I do not plan on donating to the Classics and World Religions department.  I guess his mistake was thinking I ever planned on it...  He'd be misguided to think I won't be donating to Ohio University on the academic level.


Sage point TO.  I have two planned gifts exclusively in support of scholarship.  Neither endow professorships/chairs.  As long as the vocal minority of faculty continues to be anti-athletics/anti-McDavis, and fails to see the totality of the mission of Ohio University, faculty will never...EVER... get a red cent of my money.
L.C.
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Posted: 9/19/2012 10:51 PM
Here is more data for the fire. I found a list of the leading endowments in 1999, which I compared to the list of leading endowments from 2011.  I then grouped the Universities into 4 groups. First was the ultra-elite schools, where I included only Ivy League Schools, plus MIT and U. Chicago, and I also included Princeton Theological Institute since I presume it is affiliated. The second group was BCS schools. Next was other schools with FBS football programs. The Final group was schools with no FBS football. I found the following:

1. Ultra Elite - 11 schools, average annual increase in endowment 7.0%

2. BCS Schools - 53 schools - seven of them were new entrants to the top endowments, so I don't have 1999 data, meaning they had a much larger average increase. For convenience I used as their 1999 endowment $340 million, which was the bottom of the 1999 list, which should understate their growth. The average of the 53 schools, then, was 6.7%. By conference there isn't much difference, except that the Big Least is lower than the rest::
         Pac 12 - 7.4%
         Big Tendozen - 7.2%
         ACC - 6.4%
         Big 12 - 6.4%
         SEC - 6.3%
         Big Least - 4.9%

3. Other FBS Schools - 8 schools, one being a new entrant. The average growth of endowment was 3.4%.

4. Schools with no FBS football program - 62 schools, 8 of which were new entrants. The average growth of endowment was 4.2%.


My analysis:
If you are an ultra elite school, you can get along fine without a football program. BCS schools did just about as well as the ultra-elite schools, however, and the only Universities with endowment growth over 10% a year were BCS schools. Amongst the BCS schools it wasn't even - the ones with better programs did better than others. Schools typically towards the bottom of their conferences, or in the Big Least did worse than others, but even those schools did better than non-elite schools without football.

Among the non-football schools, there was a wide disparity of endowment growth. I suspect that some of those were able to function as an "elite" school, while others were not. Leaders included Washington & Lee, Tufts, New York U,  Amherst, U. Richmond, Carnegie Institute, Pomona, Bowdoin, Berry College, and Colby. There were also a very large number that did very poorly. At the bottom of the list you have Agnes Scott, St. Louis University, Earlham, Wesleyan, Carleton, Case Western, and DePauw.

I believe that the data shows there has been a paradigm shift in giving. Schools that attract the most giving to their general fund are either ultra elite, or are among the elite at football. The second tier of elite schools, schools like Oberlin, Case Western, or Wesleyan, were not nearly as successful at growing their endowments, nor were the second tier of football programs, schools like Rice, Buffalo, SMU, Tulane, and Tulsa.

As a side note, while Ohio University was not on my list, 26 schools on my list bore the name of just a state name plus the word "University", and those schools averaged 6.4%.

Conclusions:
If you want to increase general giving, you need to stand out from the crowd. Being a second tier "elite" school doesn't accomplish that, nor does being a second tier football program. On the other hand, bearing the name of a state is a big advantage, especially if coupled with another advantage. If Ohio is going to play football, football will help, not hurt, general giving if the team is good. Note that the Ohio endowment is $336 million. Thus a difference of 1% in growth is $3.4 million. I think the data supports the conclusion that the difference between winning and losing, even in the MAC is worth more than 1% a year to the endowment.

So long as Ohio is going to play football, it is worth it to try to be good at it, even in the MAC, though a move to a BCS conference, even the Big Least, would increase general giving even more. Ohio also needs to focus on improving academically, and trying to build its status as an ultra elite program in as many areas as possible, such as Journalism or Sports administration, where they are already leaders. (Note that it would be harder to have an elite Sports Administration program without a football program.)
Last Edited: 9/19/2012 10:59:08 PM by L.C.
oucs 1986
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Posted: 9/20/2012 12:23 AM
L.C. wrote:expand_more
I believe that the data shows there has been a paradigm shift in giving. Schools that attract the most giving to their general fund are either ultra elite, or are among the elite at football.


Devil's Advocate Time; I have to, since I simply cannot resist a good argument.

Normalize raw dollar increases in endowment by # of alumni....

It could simply be headcount.

-john
L.C.
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Posted: 9/20/2012 2:28 AM
Since I was dealing with percentage increases rather than raw dollars, headcount should not matter in most circumstances. Basically you are comparing current giving with all prior giving in the history of a school, and the data shows that for BCS schools, current giving is higher compared to historical levels than for non-BCS schools, other than the ultra-elite schools.

The one situation headcount might matter would be if there was a change in the number of students. For example, if a university increased their class size by 30% a decade over the course of a couple decades, you would expect to see a larger increase in endowment than you would see at a university that was not growing or shrinking. It is possible that BCS schools are more likely to be increasing enrollment than non-BCS schools, so that may be one reason they are seeing fast endowment growth.

One other note - investment return does matter, and a school that invested better would show better. I see no reason to think that the quality of investment advice would be related to whether they play football or not, so I made no attempt to determine what percentage of the endowment increase came from investment, and what percentage came from donations. Similarly I didn't try to determine what percentage of the annual investment return was being consumed to pay for scholarships, etc. Again, I saw no reason to think there would be a correlation between that and football. Another variable that I ignored was whether a school had a major endowment drive in the last decade. That would also impact the results.
Last Edited: 9/20/2012 2:29:57 AM by L.C.
L.C.
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Posted: 9/20/2012 11:55 AM
Going back to my original post about the benefits of athletics (with Ted's addition):
1. It benefits the local economy (apparel sales, food and beverage sales, etc), thereby closing the gap between town and gown
2. It advertises the University
3. It adds to the campus social life
4. It adds diversity to the students at the University
5. It creates a tie that connects alumni to the University, and a reason to return to campus, thereby promoting future giving
6. It allows the use of Athletics as a classroom for Sports Administration, Athletic Training, and Radio/TV and Journalism

Most of these benefits could probably be expected to lead to higher donations to the general fund. Of all of them the biggest benefit is probably the advertising effect. There is no question that the BCS schools in particular are front and center in the minds of prospective students today, so that means better students, and more students, leading down the road to more donations.

I admit that I personally enjoy football. On the other hand, I have always been somewhat ambivalent about the question of how much resources a school should put into football, and whether there was a benefit from doing so, so I have generally avoided the discussions of whether Ohio should try to jump up to the BCS, or drop down to Division II. It seemed logical that the advertising benefit was of value, but how much value?

The data that I have seen recently is stunningly clear, I think. First came the study that showed that winning in football increased application counts, and increased average test scores of incoming students. Next came data showing the massive impact home games have on the local economy. Now, after looking at this endowment data, it seems obvious that the impact on general giving is huge, far larger than the cost of the program. McDavis is on sound footing, I think, in trying to build more awareness of Ohio University by building athletic programs. 
Last Edited: 9/20/2012 11:57:22 AM by L.C.
Ted Thompson
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Posted: 9/24/2012 11:32 PM
L.C. wrote:expand_more
Going back to my original post about the benefits of athletics (with Ted's addition):
1. It benefits the local economy (apparel sales, food and beverage sales, etc), thereby closing the gap between town and gown
2. It advertises the University
3. It adds to the campus social life
4. It adds diversity to the students at the University
5. It creates a tie that connects alumni to the University, and a reason to return to campus, thereby promoting future giving
6. It allows the use of Athletics as a classroom for Sports Administration, Athletic Training, and Radio/TV and Journalism

Most of these benefits could probably be expected to lead to higher donations to the general fund. Of all of them the biggest benefit is probably the advertising effect. There is no question that the BCS schools in particular are front and center in the minds of prospective students today, so that means better students, and more students, leading down the road to more donations.

I admit that I personally enjoy football. On the other hand, I have always been somewhat ambivalent about the question of how much resources a school should put into football, and whether there was a benefit from doing so, so I have generally avoided the discussions of whether Ohio should try to jump up to the BCS, or drop down to Division II. It seemed logical that the advertising benefit was of value, but how much value?

The data that I have seen recently is stunningly clear, I think. First came the study that showed that winning in football increased application counts, and increased average test scores of incoming students. Next came data showing the massive impact home games have on the local economy. Now, after looking at this endowment data, it seems obvious that the impact on general giving is huge, far larger than the cost of the program. McDavis is on sound footing, I think, in trying to build more awareness of Ohio University by building athletic programs. 


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