UrsaMajor;842715644 said:
WIAF:
While you are correct that 40K alums show up at football games (and probably 8K at basketball), it isn't clear that those events increase the likelihood that they will donate to the academic side of Cal. Many fund raising professionals have tried to do the research on the role of athletics in fundraising and except for places like Alabama or LSU, the link has never been proven although most of us believe it to be real. (btw, I know quite a few foundation board members who are not ESP holders, although most that I know are).
Sorry for the long response.
There is a lot of confusion about numbers. So let me start with what the Cal athletic department contributes annually:
1) Several million dollars for "administrative overhead".
2) Funding of 650 to 700 students.
Cal I/A also receives a $5 million annual subsidy from Chancellor funds. Cal has run operating deficits and surpluses the last couple years, and candidly, I have heard due to new NCAA rules on food and stipends, now is running a widening deficit, though I don't know what the amounts are or will be. I do know however, that if the 1 and 2 above go away, and any subsidy or deficit goes away also (btw, the academic side much larger deficits which UC pays for), Cal will have to substantially cut the number of students and faculty. Jon Wilton said that when Sandy was racking-up record deficits and it applies equally today, and Chancellor Dirks will tell you that.
With that out of the way let's get the argument about the relationship between fundraising and D1 sports. I know studies say athletic success brings in more money and studies that say otherwise. I'm not sure how you can actually quantify this without some form of allocation accounting, which really doesn't exist except in the for profit world. For example, in my former law firm, the originating partner received a certain share of client revenues from a client he brought in that someone else worked on. So if Cal athletics brings in a donor and that donor then donates to say the economics department, Cal athletics receive some sort of credit in the for profit world, and we could tell what in fact sports contributes under that system of accounts. However, that is not at all how it works in the real world of fund accounting, because athletics and different academic functions are in different operating funds (if anyone doesn't get this, Google "fund accounting"). Thus, there is no way to tell how much Cal academics delivers for Cal sports or vice-versa, and that is true for probably every college, and anyone who says otherwise is basically selling an agenda. Interestingly, I have had the last two Chancellors say that in most years, Cal sport's donors contribute more to Cal academics than to Cal sports. One major exception was when Cal decided to cut teams to save $9 million annually only to discover that sports donors pulled more than $9 million in contributions from academics. The decision then was reversed.
So if you ask most Chancellors or Presidents why they don't eliminate D1 sports (and in fact at school like Stanford lavishly subsidize sports out of their general academic fund), they typically talk about un-measurable benefits. When you have athletic success the number of applicants generally increases a lot. Your branding gets huge bumps. Your school is more popular. More people buy and wear your school clothing. You get a more diverse student body, there are activities for student to attend thus enriching the college experience, and other arguments related to campus environment. Most students not only want a college education -- they want the college experience.
Why is this important now? Demographics. There is and will continue to be heightened competition given enrollment strains. In fall 2012, the number of students attending four-year colleges starting declining. Absent strong demand from non-US students the trend will continue due to birth rates and prior college growth. (On an antidotal note, even just team participation can attract students, for example, we know a student who turned down Harvard and other Ivies in order to walk on the soccer team. This also happens regularly with rugby players).
Sports strengthens the relationship between a university and its local community. This is the way to get corporate sponsors and importantly research grants. Those that have been on the travel planes to football game know what I mean. Big bucks to the schools.
But what the college President will tell you mostly is that football games, in particular, provide physical access to more and larger donors who normally won't go to campus, will not follow their alma mater otherwise and can not otherwise be efficiently communicated with in person. This is invaluable to the university that know how to take advantage. And its why schools like Furd, with much larger endowments, will put in over $20 plus million annually into their sports programs.
Finally, for some schools that get it and have the right alumni mix, its about camaraderie. USC groups get together in mass to watch games on Saturday through out the country, and that bonding pays off in loyalty and donations, albeit of it often in smaller sizes. But they have a great donation rate.
One last comment. None of this comes without risks. If you don't have good governance, your school gets embarrassed, for example. But other than the Ivies, essentially every large college university has major sports programs, and the people that run universities are not dumb people.