February 9, 2011

Ahead of New Budget Cuts, Athletics Department Relies On Unprecedented Fundraising

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This is the first in a three-part series examining the financial state of the Cornell Athletics Department.

Two years after the economic downturn forced University-wide budget cuts, the Athletics Department has continued its effort to maintain financial stability without sacrificing Cornell’s competitiveness in the Ivy League. The fiscal year 2010 saw Athletics lose 15 positions and decrease its budget by $915,000 as part of the 5 percent across-the-board cuts made by every department in the University. While the extent of the upcoming second round of cuts will not be known for another couple weeks, Athletics Director Andy Noel did mention that three jobs have been cut from the department, though in each instance Noel and his staff were able to place those individuals in other open positions.Due to the fact that the University as a whole is “still not in equilibrium,” Noel anticipates another year of cuts, but would not speculate on how much or what areas specifically they would target — only that his department expects to be informed during the first quarter of this spring semester. Noel acknowledged that the level of budgetary slicing will depend largely on how successful the senior staff is at rethinking areas like IT, HR and procurement.“Across the board I think there’s going to be some significant savings with the University looking at our purchasing more globally, but certainly that won’t get the job done totally, so we’re probably going to have to have another round of tightening,” he said.The first wave of cuts brought with it a marked reduction in varsity team travel. For instance, men’s heavyweight rowing coach Todd Kennett ’91 — whose Varsity 8 crew finished third in the nation at IRAs last June — mentioned that overnight hotel stays have been all but cut out of his team’s travel arrangements, with the squad often departing at 4 or 5 in the morning for most races. In addition, “A lot more parents have been putting on dinners for us; I’d say probably half our road trips are picked up by parents,” Kennett said. “Although we can’t budget that, we end up saving money that way.”Financial limitations have also prevented Kennett from bringing his entire team to a number of races. “The Varsity, the JV and the first Freshman boat always travel, but then after that it sort of depends on where we’re going and what the cost is,” he said. Kennett mentioned that across the department, coaches and teams have found ways to cope with such constraints brought on by the economic crisis. “You talk to the other coaches, and everybody’s the same. … I know of a number of other big, up-front sports — the ones you can see in the national limelight — and they’ve had bigger cuts happen to them, or bigger positions taken away, and you don’t hear them complaining,” Kennett said.One team that has not seen a substantial decline in out-of-state travel is men’s basketball, which receives a guarantee for competing outside of its region against schools like Duke, Indiana and the University of Washington. Noel estimated that Cornell brought in between $55,000 and $80,000 per game when it played Syracuse and Minnesota at the end of last semester.Depending on the year, the team’s non-conference schedule might feature as many as four of these guarantee games, for which the program can ultimately pocket up to $200,000. However, according to Noel, once the basketball team’s expenses are paid for via these guarantees, the leftover does not stay with the team, but is put into the Athletics Department’s overall budget, thus helping to mitigate other kinds of cuts.  “That money basically makes it very inexpensive to have a men’s basketball program, and so we’re able to fund other programs fully,” he said. For instance, men’s and women’s basketball are very comparable in terms of travel, recruitment and equipment needs. That being said, the amount of subsidy from the department to support men’s basketball is less than half of what it costs to subsidize women’s basketball, due to the fact that women’s basketball does not have the same opportunity for these guarantee games, according to Noel. In addition, men’s basketball has had an endowment in place longer, resulting in more payout. “We try to treat everybody the same — not to say that every budget is the same — the [different] sports have different demands, different recruiting demands, and so we try to be very fair with it,” Noel said. “Men’s basketball doesn’t profit from their guarantees, the department does — in a significant way,” he added. Besides guarantees, the Athletics Department also benefited from “terrific fundraising,” which brought in $3.8 million during the fiscal year ending on June 30, 2010. Over 6,000 alumni made contributions that ranged from $25 to $100,000 — generosity Noel attributes to the unprecedented success of so many Cornell sports teams last year. “Across the board there was a lot of success, so I do think, contrary to what many people believe and write about that … success in athletics at a place like Cornell does have an impact on annual giving, and we saw that last year and raised $3.8 million in annual gifts, which was by far more than we’ve ever done,” he said. The amount represented half a million more than the department’s stretch goal, and one million beyond its piece relevant to the trustee-approved budget. “We knew that if we only raised $2.8 million we were going to be in big trouble. So while we promised 2.8 in the trustee budget, internally when we set up our numbers and our goals and our parameters we made it a $3.3 million budget to break even. And we ended up raising 3.8,” Noel said. “We just knew we needed to do that or we weren’t going to be able to provide the kind of support that we needed for our teams to really have an opportunity to do what they needed to do.”Noel and his staff also took postseason play into account when reassessing the trustee budget, since even though the NCAA offers teams financial support in the form of per diems, it is often not enough to break even. As far as how the department’s fundraising efforts are coordinated, each team is given a  predetermined goal based on variables such as living alumni, how cultivated the alumni are, and program strength. “It’s basically a historical kind of [process]. It’s evolutionary over time based on an active alumni base,” Noel said. “Based on what we think [the team’s] potential is, we give them a number.” Team fundraising goals range from $22,000 to upwards of $800,000, with a lot dependent on which programs have a longstanding tradition distinguished by years of winning. For example, the men’s tennis team has a fundraising goal 2.5 times that of its female counterparts — a product of the fact that women’s tennis “hasn’t been strong for 15 years [whereas] the men have had some good years and have a longer tradition,” according to Noel. Excluding the differential in what each team’s coaches make based on their experience and other relevant factors, both tennis squads have a comparable budget, with the men receiving less subsidy from the department. “The guys are paying more of their own bills than the women are, but I have an obligation to make sure the women’s program is supported as much as the guys’,” Noel said. Then there are sports like men’s basketball, which is only expected to raise $75,000 — and not $175,000 — because the guarantees are so significant. According to Noel, about 85 percent of Cornell’s teams usually reach their target, following a huge push in fundraising efforts during the month of June. The Athletics Director also has his own personal unrestricted goal. “I’m not a team, but I have a number to hit, unrestricted, so that I can help areas of the department that need it the most,” he said. When an individual gives money to a particular team, those funds stay with that team — something that differentiates Cornell from other institutions. “There are a lot of universities that don’t allow alumni to give to a team; they have to give to the department. … But my experience tells me that while there are alumni who will give unrestricted to the department — and we do have a number of generous folks who do that — stereotypically, alumni want to give to their affinity, to their team, because they know the coach and they know the players,” Noel said. “They want to make a difference for that team, and so I think it’s counterintuitive not to let them support that group of people.”Some teams, such as sprint football, often get to 200 percent of their target goal, with that surplus remaining in the beginning balance that carries into the next year. This money can then be invested or used to advance a project, such as expanding the locker room, assuming the expenditure receives the blessing of the senior staff. “We have gender-equity issues and what have you. … We can say ‘yes’ … when we have something for our women’s program, or something that balances,” Noel said. “Almost every expenditure has a lot of thought behind it, none of it is knee-jerk.”Many sports’ alumni will often give to a different team once their affinity meets its fundraising goal. Just like in the case of men’s and women’s tennis, both lacrosse teams see a discrepancy in how much they need to raise based on history and established tradition. Whereas the men have advanced to three Final Fours the past four years, the women’s team has won one Ivy League title in the last 20. However, once men’s lacrosse hits its goal, a number of individuals will frequently offer their support to the women’s squad. In fact, Noel mentioned that when he reaches out to men’s lacrosse alumni, he will simultaneously ask them to support the women’s program, knowing they have young girls in their families. “That’s been really great — particularly in lacrosse, that’s worked the best of any sport,” Noel said, adding that these alumni possess a “real affinity for the sport of lacrosse in general, not just the guys.”Besides fundraising with respect to the needs of specific teams, Noel and his staff also raise money that goes towards financial aid packages for early decision admittances — a pool that includes recruits, even though the department cannot allocate aid directly to varsity athletes. According to Noel, the Athletics Department does not fundraise in order to buy new uniforms or fund a special trip, but rather for a much more fundamental reason.“It’s to survive,” he said.

Original Author: Alex Kuczynski-Brown