It’s well past time for UO to start taking a percentage of the athletics donations for the academic side. But there’s still no substantive response from President Gottfredson to the May 8 Senate motion on this, just a letter saying maybe he’ll appoint a working group. It’s been 9 years since the original athletics task force recommendation.
The story also reports that chronically unlucky Chief Investment Officer Jay Namyet was able to earn only 13.8% on the endowment. Disastrous. The S&P 500 returned 18.6% over the same period, the Dow was up 16.3%, and the NASDAQ 17%. His underperformance is, conservatively, $11M in just one year. For perspective, the faculty union and the administration are currently about $5M apart on salaries.
The UO Foundation’s full annual report is typically released at the end of September. This early press release appears to be an attempt to divert attention from the latest athletic excesses. Good luck with that.
6/2/2013 update: The UO Foundation has been dominated by sports boosters for far too long. See past posts on the Foundation, including their (successful) effort to get an exemption from UO’s public records law, here. Tax deductible donations without transparency is not a recipe for trust, and not a good model for an independent UO Board of Trustees. Speaking of which, I still can’t get a
commitment from UO that SB270 as currently written will require the Board to follow that law – even to the feeble extent that UO currently obeys it.
6/2/2013: No sign of it on their website, but rumor has it the UO Foundation trustees are meeting today. The new board chair is Steven Holwerda:
From an online bio:
First choice for a new career: I started out in athletic administration, and if I had to pick a second career it would be to go back to working for the University of Oregon’s athletic department. Go Ducks.
How convenient. A former Duck athletic department and NCAA employee, whose dream is to work for the Duck athletic department, will now oversee the UO Foundation, which by law is supposed to support the university’s academic mission. Oregon law requires that
The Foundation will accept only gifts that: the University has approved, including all restrictive terms and conditions, has determined to be consistent with the core educational values of the University, and are compatible with the missions of the University and of its individual programs (Oregon Administrative Rules, Chapter 580, Div. 42 and Div. 46);
And those OAR’s prohibit accepting gifts that involve
(c) Creating a commitment for the institution or the state to continue support of a program funded through gifts, grants or contracts, in the event such funds are discontinued;
I suppose a creative lawyer could slip the Jaqua Center and the Knight Arena through. But in practice the foundation is now mostly a money laundering operation for the Duck Athletic Fund. That’s a very rewarding business, for some. Erika Funk filed 2 requests for extensions with the IRS, but finally had to make some salary info public on May 15, in their IRS 990. These numbers are now almost a year old:
Here are the donations they received for UO for current operations, from 2000 up to last year. The numbers are from the Council for Aid to Education:
In his investiture speech President Gottfredson announced a new $1B capital giving campaign. The previous campaign ended in 2006, and raised $850M in donations and pledges. How much of that was for athletics, and how much for academics? The UO Foundation won’t report UO’s breakdown for capital gifts and endowments – something most foundations, including the OSU Foundation, tell the CAE as a matter of course:
I did find this snippet from last summer:
Overall, giving in fiscal 2012 totaled $51,737,551 in support of academics, mainly for current purposes and endowments. Athletics programs received $55,950,231, which included significant support for expansion of the Len Casanova Center.
What steps will President Gottfredson take to make sure the UO Athletic department doesn’t siphon off potential academic donations for the Ducks? The Athletic department runs its own independent fundraising program, which currently competes with the UO’s development office without check, and with great success – for the jocks:
UO Professor Dennis Howard – holder of a Philip H. Knight Chair in Sports Marketing at UO and former Business School Dean – has written the definitive paper on how the Ducks have done this in the past, comparing data on donations to UO sports and to UO academics, from 1994 to 2002. His conclusion?
Both alumni and non-alumni show an increasing preference toward directing their gifts to the intercollegiate athletics department-at the expense of the donations to academic programs. Sperber’s (2000) assertion that giving to athletics undermines academic giving is strongly supported.
and
For every $100 of new revenue raised from major donors by the University of Oregon, over 80% is being directed to the athletic department. Even with the large increases in numbers of total donors since 1994, academic giving struggles to remain stable while donations to athletics experience huge growth. In three out of the past five years (1998, 2000, 2001), the total dollars donated to academics by non-alumni has fallen despite annual increases in the number of non-alumni donors. Total dollars donated to academics by alumni fell in only one year (2000), again despite an increase in the total number of donors. This suggests new donors are not making academic gifts, and current donors are shifting dollars from academic giving to donations directed to the athletic program. Additionally, as discussed above, proportional giving by alumni is predominantly directed to the athletic program. If these trends continue, total academic giving will fall for both alumni and non-alumni despite continued increases in the total numbers of both types of donors.
To add to the insanity, under the secret Frohnmayer/Kilkenny agreement President Gottfredson’s office has to pay the AD $350K, so that they can then use his Autzen presidential skybox to schmooze with their boosters and get still more donations for the Ducks. I’m not making that up.
One obvious solution is for UO to tax donations to athletics, sending say half to the academic side. Another would be allow donations to the athletic side count for determining season ticket priority. Athletic Director laughed at both these proposals when we brought them up in the IAC. He even refused to consider a ticket surcharge – even just a dollar – to be earmarked for academic scholarships.
Currently the transfers run the other way. President Gottfredson has until July 8th to respond to the Senate resolution calling for
- an end to two of the more egregious annual subsidies for athletics – the $2M Jaqua Center operations costs, and the $467K we pay for Knight Arena land, and
- a modest payment from the AD towards need and merit scholarships for regular UO students: just 2% of the AD’s spending on sports.
Meanwhile, up in Corvallis, OSU’s foundation is in the midst of their own capital campaign: See their list of contributions here. Their athletic budget is only about half UO’s, their subsidies are out in the open, and they manage to bring in plenty of giving for academic programs.
Here’s another Duck/Beaver comparison: Research and Athletics spending:
Diane Dietz has the story and data on UO here. I got the OSU data from their very complete Research Office data page, here. Both are “Federal Flow Through” totals, which are the easiest to find directly comparable data. They include spending on outreach and instruction, but it’s mostly research money and the trends look similar no matter how you cut it. That’s the table on the left. The table on the right shows athletic department spending, from USAToday. (Official UO and OSU numbers for 2012.)
The one slightly bright spot appears to be the small student aid component. But overall, contributions to academic operating costs appear stagnant, in fact declining in inflation-adjusted dollars. While athletics, which is the largest component, goes up by a factor of four.
And people wonder — with state aid cratering during that time — why tuition keeps going up so fast.
And mostly, in their confusion, think the faculty must be to blame.
Where are all the key players? Not out front, that’s for sure.
Except for UOM.
It should be noted that the development office budget has gone up by more than 300% in the past five years (I forget the exact number). What the fuck are we paying them for if all they do is collect athletic donations and they can’t move the academic donation needle at all.
Somebody needs to set some clear, big academic giving goals and tie the salaries of these people to those goals. You know, like they do in the non-academic world. If we are in such dire straits, why give them a pass? Why give them more money?
Athletics has something to sell – entertainment. People don’t “give” to DAF for charity. If it wasn’t for season ticket holders and Phil Knight the green line in the graph would be much, much lower.
RE Holwerda’s bio — he is also Rich Brooks son-in-law.
Coincidence, surely.
Who is Rich Brooks?
“Coincidence, surely.”
Right. (eye-roll)
Dog Says
Rich Brooks was a failure as an NFL coach
for the Rams …
One person of course does not define a board, one would hope that the other trustees have a stronger academic background.
What the appointment does suggest is that sports, and not teaching and research, are likely to dominate university business for years to come.
It is a matter of deep regret to me that excellence at UO and at other American universities is now defined by success in sports; it need not be. There are excellent universities in Europe and Asia that do not rely on, much less allow such distractions to consume so much time and effort in the higher admin.
But coaches and higher administrators continue to receive ever higher salaries; scholars do not. Instruction is available to subsidize athletics, when it should be the other way around. Or even better: totally disconnected.
The whole world wants to know? How many scandals will it take in the NCAA and among our competitors before a more balanced policy evolves?
Canis Minor, who used to believe that he was not the brightest constellation, but now concludes that the constellation in JH is dimmer.
On the plus side, he’s an Ayn Rand enthusiast.
Oh no, not really? At a “public” institution of higher education?
I trust he doesn’t share her enthusiasm for dangerous drugs and sex — just her wacky and obnoxious economic views?
Perhaps you might want to talk to Mr. Holwerda. I am a member of the faculty in the B-School and I can tell you that Steven has been a steadfast supporter of the school and our students, a regular attendee as a speaker, hiring our students, offering faculty potential topics for research, etc. The fact that he loves athletics does nothing to diminish his capacity, talents, or worthiness for the UO Foundation job. In fact, the historical performance of Ferguson-Wellman would make me rest easy that there is someone at the helm as an advisor with a strong investment philosophy. Once again UO Matters throws someone under the bus for the sake of sport. Shameful.
Canis Minor responds…
my comments were not directed at the person, but at the general problem; namely big time sports are a distraction, and indeed a growing distraction for American Universities.
Good to hear that Mr. Holwerda has been involved with LCB programs, and his background in finance is certainly relevant.However,I don’t see UOM’s pointing to the coziness of athletics, athletics boosters, and our own academic leaders as throwing Holwerda under the bus. The question is: where are the academic priorities and academic leaders? I think even we egghead academics understand Lincoln’s typically telling words, that ‘you can’t build a house by burning someone else’s down’ but we don’t even seem to have plans for an academic house. The Jury is still out on Gottfredson, but the clock is ticking.
That graphic of research funds at UO vs. OSU really says a lot.
It’s perhaps not to the credit of OSU that the Obama administration is throwing a lot of money at supposedly applied research, but it sure is having an effect.
UO is basically stuck in research funding, and actually in pretty steady decline when you take into account the increasing costs of doing research, especially personnel costs.
Unless the institution and its backers do something pretty quickly — I don’t know what — it’s going to have a severe long-term damaging effect.
Starting with exit from the AAU?
I like the quote from his online bio
“Best way to stay competitive: always be a little fearful.”
If we want to compete with the athletic boosters/interests, lets follow his advice and fear them.
“Two-thirds of all donors made gifts toward academic purposes and 12 percent were first-time contributors to the university.”
So it’s the small donors that give to the academic side, not the rich boosters. Interesting.
The future of research at UO looks pretty depressing.
The state does not and will not fund research to any significant extent. So, UO is like a private university in that regard, probably more so than most public research universities.
But at private universities, a conscious, constant effort is made to raise money for research from private sources. Just ask alumni of Caltech or Stanford or Chicago (or Berkeley, which sort of supports my contention about other public universities.)
The private donors see part of their job as keeping these places on top academically.
Not so at UO!
Unless Phil Knight ever comes through with the long-rumored $2 billion — who knows where that will actually go — the future doesn’t look very bright here.
I look at OSU — which a couple of decades ago was treated as kind of a joke — and now they are going around calling themselves “the research university” in recruiting undergraduates — and I can’t help thinking that in a few decades, they might actually become the dominant public university in Oregon, academics-wise.
Fishwrapper wonders: Why use the future tense?
First, it makes sense that the the athletic department should support itself. It also makes sense that people should be able to donate to the groups they wish. For example, I’m more likely to donate to a scholarship fund than I am to athletics or a particular college. I’m not going to donate to any of them if my money is going to be shuffled around in a shell game.
As it is not clear from your post, please do recognize that our athletic department does not support itself financially. They support themselves, clearly, with all sorts of expensive statements and publicity stunts, with all sorts of niceties, and fancy stuff, with imported furniture and ass-cleaning toilets (not meant as a slight to any athletic department coaches or admins), but they are absolutely not financially self supporting.
You know, I’m guessing that on more than one occasion, Phil Knight has asked Mullens or Gottfredson what is on the top of their list of priorities. Surely he has. I wonder if they’ve ever thought to ask Knight to cover the ever-recurring shortfalls they dump onto the academic side.
The return on the endowment was not disastrous. Of course returns will be lower than equity benchmarks… and we should want it that way. The foundation shouldn’t be trying to beat the market. It has always been conservative. That saved us in the 2008-09 recession compared to our peers.
No, read the 2012 report. They earned 4.8% annual average 06-11, benchmark was 5.0%.
And you might want to deduct their salaries and management expenses from that 4.8%, it’s not clear if they did.
They seem to be doing less well than the PERS trust fund. Surely we want them to do better!
How does the endowment fare to those of our comparators.
Athletic? Quite well actually.
Trust me, UO is at the bottom. As in everything else. Our “comparators” have long since passed us by.
You do trust me, don’t you?
I don’t intend to advocate for the devil, but 75% isn’t quite accurate. It’s closer to 60%. $200M total – $85M for academics leaves about $115M in donations to Athletics. The new football monstrosity wouldn’t be counted in the fiscal year that it opened but in the year it was approved–so 2010 probably, or not counted at all.
And to focus on the positive, $85M to academics is pretty substantial. No, it’s not $115M, but it’s progress.
I think I’ll withhold judgment until we can see where that money is allocated. The administration sometimes has a pretty broad definition of “academic”.
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Although not a Steve Holwerda fan I think it is importantant to not use posts not based in facts. This is not the forum for that.
Seems to me many people are not a big fan of Mr. Holwerda??
Posts above were deleted for trolliness.
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Holwerda is using this position as a stepping stone. Don’t be fooled, he will use this and all positions he worms into to get closer to his end goal…..Athletic Director.
Hass this blog been updated since 2013? If yes, where can I access it? I’m a former reporter looking into alumni donations to Oregon colleges and universities.