Athletic Endowment???

[Greenwich Pony]

Hey Mr. SID or whomever in the department looks at these posts...

We have bandied about the idea of creating an Athletic Endowment on this board for some time. Why doesn't someone just do it? Admittedly, it may not be multi-millions to start, but the sooner we start collecting for the principal, the sooner it can mature into something that will generate interest revenue for the department. And an existing endowment can be expanded in the inevitable next fundraising drive.

[CA Mustang]

Considering schools like Stanford and USC have had athletic endowments for years (if not decades), I hope SMU isn't THAT late to the game.

[CoxMustangFan]

I have a friend that is a Tech grad and apparently they've started funding athletic schollies from message board discussions.

[Chnash318]

Texas has started talking about creating one. I don't know why we wouldn't. I'm willing to throw in $100

[NewAgeMustange]

I'm betting that more people will donate to a Athletic Endowment than the 194 DFW Alumni that have donated for Homecoming. They are only trying to get 330 people, that should be pretty easy right?

Right now these are the funds I can donate to: I know on the direct mailers there is even the options to donate to my fraternity.

SMU Fund
SMU Scholarship Fund
SEcond Century Celebration
Parent Fund
Mustang Club
Mustang Band Hall
Central University Libraries Fund
Cox Fund
Dedman College Fund
Dedman Law F
Lyly Engineering F
Meadows F
Perkins F
Simmons F
Student Affairs (what is this?) F
Guildhall F

Pledge Payment
Other

Also does anyone know why the School has extended Early Admission back from Nov1 to the 9th?

[Bergermeister]

Isn't Rice athletics endowed?

[smupony94]

No

[NavyCrimson]

All we have to do is put away a half-mil or a mil from the annual Mustang Club donations annually & we're off & running. Start a special fund or whatever you want to call it so people can give to it as they please when they please. Start it the next fiscal year & let's move on from there. Why is this so difficult? Why the delay after all these years? That's the million dollar question!!!

[Greenwich Pony]

It seems easy enough and there does seem to be enough interest to start raising something.

[CBpony]

I'm no financial expert, but isn't it hard to sock away money when you continually operate in the red?

[mrydel]

And who will feed the horses

[PonySnob]

And who will feed the horses

We got rid of the other one


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[NavyCrimson]

There goes our endowment idea. LOL

[CalallenStang]

I'm no financial expert, but isn't it hard to sock away money when you continually operate in the red?

1) Before the books are closed, SMU gives the athletic department a subsidy. It's not like our athletics department is irresponsibly not paying vendors or something.

2) a large portion of the subsidized amount is tuition and fees, paper costs that are not closely related to the true costs of serving our student-athletes. This has to do with the way accounting is done: tuition and fees are costs for those that are paying for the students, but revenue for the greater university which then uses that revenue to pay the university's operating costs.

3) Even if we were truly operating in the red, it's very possible to "sock away money" as you say. All you need is for the endowment to generate interest in an amount great enough to satisfy the following formula:

Operating Revenue + prior commitments collected upon + interest gained = operating costs + current portion of debt

That's as simple as I can make that. It's slightly more nuanced but let's not turn this into an accounting lesson

For instance, if we collect $15m in revenue this year and receive $3m owed to us from the year before, but spend $20 mil this year and owe $3 mil in interest to our creditors, then we need $5 mil in interest received. Assuming a 10% annual rate of return, our endowment would need to be $50m or just more than the amount raised for Moody.

Now, you could be given $50 mil and immediately pay out $5 mil from that, but at the end of one year, you'd only get 10% on $45m so you are left with $49.5m and have lost $500k.

It's more complicated than this because you may have to pay portions of that money earlier than the end of the year but you may also have interest compounding more often than just at the end of the year. But let's not make this a finance lesson either.

The bottom line is that the athletics endowment is a fantastic idea.

[redpony]

I had mentioned this several times. I doubt if it will happen. IMO RGT would not want it for fear it might impact some of the giving to the university in general. If he would go for it I imagine he could raise a substantial sum very quickly. We should push the AD and see what his reaction is.