Colleges raised US$1.2 billion in donations for sports

Donations to capital campaigns for new facilities and commitments to cover more aid for athletes helped major-college athletic departments raise more than US$1 billion in 2015, according to a report released on Wednesday by the Council for Aid to Education. It was the fourth time in the past five years that gifts for athletics had crossed the billion-dollar mark.

[This is an article from The Chronicle of Higher Education, America’s leading higher education publication. It is presented here under an agreement with University World News.]

But there are signs that donors may be reaching their limits, as overall athletics donations to the reporting institutions dipped slightly in 2015 from the year before. A drop in the stock market contributed to that decline, athletics leaders say. So did donor fatigue, with some supporters questioning programmes’ efforts to raise donation requirements for tickets and to seek money for increased compensation for coaches.

There was no slowing Texas A&M University, which brought in nearly US$67 million, the most of any institution that responded to the survey. In the past three years, Texas A&M donors have contributed more than US$350 million in cash and pledges toward the renovation of the university’s football stadium and other athletics projects.

The University of Oregon – which last year announced a US$2 billion campus-wide campaign, US$400 million of which is for athletics – brought in US$53.7 million. Clemson University, which did not respond to the survey but provided information to The Chronicle, raised US$60.1 million. Nearly half of that came from major gifts toward a US$176 million renovation of facilities for football, basketball and other programmes.

The council's annual "Voluntary Support of Education" survey counts deferred gifts and contributions received during the fiscal year. Nearly 400 colleges provided information about their athletics donations. In recent years, roughly the same number of institutions have reported those figures, which are an optional question on the survey.

Those colleges raised a collective US$1.2 billion for sports in 2015, slightly less than what institutions reported the previous year. Several programmes with established fundraising operations, including Florida State University and Louisiana State University at Baton Rouge, along with Clemson, did not participate in the survey.

As in previous years, the wealthiest programmes accounted for most of the contributions. The top 20 athletic departments reported collective donations of about US$670 million in 2015 – more than half of the US$1.2 billion raised.

That money has helped cover large capital expenses, such as new practice facilities and stadium suites. Donors have also pitched in to cover the additional financial aid that many programmes began offering players last year.

But athletics officials at several big colleges said they had seen donors balk at covering certain expenses, including higher seat fees and rising salaries for coaches.

"I wouldn’t say we’ve seen massive turnoffs yet," said Dirk Katstra, executive director of the athletics foundation at the University of Virginia. "But there’s a tipping point there somewhere, I just don’t know where it is."

Doubling of donations

Over the past decade, big athletic departments have seen a marked increase in philanthropic support. Last year they brought in nearly twice as much as in 2005, according to figures the council provided to The Chronicle, with an increasing number reporting annual contributions of at least US$20 million. In 2005 just five colleges raised that much money for sports. Last year 25 did.

Those donations have become an increasingly important source of income as many programmes face the need to upgrade ageing stadiums and arenas, as well as pressure to pay top dollar for coaches. On many campuses, donations account for one-quarter or more of the athletic department’s revenue.

Several universities reported a doubling of their athletics donations in the past year, thanks in part to major gifts. Iowa State University brought in nearly US$26 million, about twice its 2014 total. Half of that money went toward a US$60 million expansion of its football stadium.

Over the past three years, Iowa State has raised US$38 million for stadium renovations. Four donors contributed US$1 million or more toward that goal last year, with a half dozen others giving US$500,000 to US$750,000 each, said Frank Nogel, a senior associate athletics director.

Premium stadium seats have added US$2.5 million in annual revenue, Nogel said. Iowa State also upped the minimum donation required to buy basketball tickets, adding US$1.9 million to its annual total.

Paying for privileges

Annual giving in athletics is often tied to tickets and parking privileges at football and basketball games. Programmes require donors to make gifts – sometimes upward of US$10,000 – for the opportunity to buy the best seats.

Several programmes are trying to rely less on donations that are tied to ticket privileges, in part because of the whims of fans. When teams don’t win, supporters are less likely to make those donations.

Virginia’s football team has not had a winning season since 2011. But because of the athletics foundation’s efforts to move beyond ticket benefits, contributions to its annual fund have grown in each of the past five years, Katstra said. Last year the fund brought in about US$17 million, 9% more than the year before, pushing overall donations to about US$30 million.

The Cavaliers have seen an increase in giving in part, he said, because of the athletics foundation’s efforts; some fundraisers are required to see more than 30 prospective donors a month. The development team is also paying more attention to people who donate US$500 to US$2,500 a year.

"We think it’s an important group of people," said Katstra, who played basketball at the University of Virginia from 1987 to 1991. "They’re the leadership gift-givers of tomorrow and major gift donors we might not get to know otherwise."

'Priority points'

The university has also eased its restrictions on giving, allowing its supporters to direct donations to their favourite sports while still earning ‘priority points’ for football, which determine who gets the best seats. (Previously, if donors gave to a sport other than football, those gifts didn’t count toward the contributions they were required to make for football tickets.)

"We don’t care where you give it, we just want you to support the programme," said Katstra. The move has spurred more gifts to sports other than football and basketball, he said, and has helped coaches on those teams build closer ties with donors.

Several years ago, the foundation introduced a programme called ‘Coaches 10’, asking 10 donors to give US$10,000 above and beyond their typical gifts. The money was earmarked for the baseball programme to supplement assistant coaches’ salaries. Katstra's goal for that programme, which has since been rolled out to other sports for various operating needs, is to bring in US$1 million a year.

Like many athletic departments, Virginia’s relies on its donors to help cover players’ tuition and living expenses. The foundation is responsible for raising about US$22 million a year for scholarships, summer school and other aid for athletes. Much of that money goes for out-of-state students, whose annual tuition and expenses are about US$60,000 each.

Katstra’s staff is also responsible for raising money for capital expenses. The university is considering a number of big projects, including a US$50 million football building, a US$12 million to US$18 million baseball expansion, and a US$12 million tennis project.

Projects like those could be hard to raise money for in coming years, especially if the stock market continues to sputter.

Skip Wagner, president of the 12th Man Foundation at Texas A&M, said he feels fortunate that his university’s stadium campaign coincided with a mostly rising market.

"I’m glad we’re not doing many major fundraising projects right now," he said. "It would be incredibly difficult, if not impossible, to do in today’s environment what we did two and three years ago."

Brad Wolverton is a senior writer who covers college sports. Follow him on Facebook and Twitter @bradwolverton, or email him at brad.wolverton@chronicle.com. Sandhya Kambhampati is a database reporter who analyses and writes about higher education numbers. Want to talk about data? Tweet @sandhya__k, or write to her at sandhya@chronicle.com.