When athletic departments can no longer financially support one or more teams, they are turning to donors and community members to save the day. Here's how to make a pitch for a self-funded program.
By Mike Phelps
Mike Phelps is an Assistant Editor at Athletic Management. He can be reached at: mp@MomentumMedia.com.
On the field, the University of California baseball team had a storybook season in 2011. The squad won six straight games during the first two rounds of the NCAA Division I playoffs, advancing to the College World Series for the first time since 1992. The only Pac-10 team at the CWS, Cal finished fifth, and Head Coach David Esquer won national coach of the year honors.
The off-field story was even more remarkable. Just five months before the first pitch was thrown, the team was told the 2011 season would be its last. As part of an effort to deal with funding cuts resulting from statewide budget shortfalls, Cal was eliminating five sports from its offerings, including baseball.
The news was not taken lying down. A massive fundraising effort led by former Cal pitcher Stu Gordon and numerous other supporters brought in about $9 million for baseball and $18 million total. Baseball was saved, along with the other threatened sports--men's and women's gymnastics, women's lacrosse, and rugby.
While Cal's turnaround baseball season was unique, its funding woes are not. As budgets are cut to the bone, more and more schools--at both the college and high school levels--are looking at a new option in paying for their athletic programs: self-funded teams.
The term "self-funded" can mean somewhat different things in different programs. Generally it refers to a team that is no longer provided operating expenses by the athletic department. The squad must find its own sources of funding, but unlike a club team it is still a varsity program overseen by the athletic director.
At the college level, self-funding usually means massive fundraising campaigns, primarily targeting alumni athletes and community members. Sandy Barbour, Athletic Director at California, says the key to such an undertaking is to provide leadership and support, then stand back and let the volunteers take over.
"Certainly, I was in a difficult spot last fall because of the financial decisions that had been made," she says. "But that was actually the beauty of the situation. The decisions were based only on finances. So I had the opportunity to stand up and say to our community, 'We would love to have these five sports as part of our offerings, and if you're able to bring together the resources, we will welcome them with open arms.'
"The leadership has to provide a vision and motivation for growth and success," she continues. "It would be hard for these folks to be motivated if they felt their efforts would not be welcomed by the department."
At the same time, Barbour made it clear that the University could not be involved with the fundraising efforts. "We had very ambitious fundraising goals that didn't include raising money for these five sports," she says. "It was only going to work if there was a motivated and passionate volunteer group willing to put in a lot of time and effort--to rattle the cages, do grassroots campaigns, and make the case for the sport. This type of fundraising doesn't happen with a five-person, or even a 15-person, effort. It takes that critical mass of community to get people fired up."
Going forward, Barbour envisions the collaboration between the athletic department and individual sport support groups continuing. The baseball team, for example, has set up the Cal Baseball Foundation, a 501(c)(3) non-profit organization to collect and disperse funds for the squad. The ultimate goal is to bring in enough money to start endowment funds.
"I'd like to think it will be a cooperative effort to create a sustainable financial model," Barbour says. "The community provides the troops and the effort, and the development department offers research, best practices, and some professional guidance and strategy. And all along, you're prospecting for endowment gift candidates."
Using endowments as a long-term funding model has worked well at Cornell University. Eleven of the department's 36 teams are self-funded--men's and women's polo, sprint football, baseball, men's and women's squash, men's golf, men's and women's tennis, women's equestrian, and men's lightweight rowing--and it has been this way for more than 15 years. The school primarily targets student-athlete alumni for donations, focusing on endowment gifts.
"To be a successful self-funded program here, teams need healthy endowments that generate a sufficient number of dollars each year," says Larry Quant, Associate Director of Athletics for Financial Operations at Cornell. "Two sports that have done well are baseball and sprint football and it is mainly a function of the numbers--both teams have large alumni bases. Sprint football, for example, has 60 athletes on the team each year, so they have more available donors than sports with smaller rosters."
Along with building endowments for these sports, Cornell funds the programs with annual gifts. Unlike California, the athletics development staff at Cornell handles the fundraising. "We have people on staff who fundraise, but we don't ask coaches to do so," Quant says. "What we do ask of coaches is that they maintain good relations with alumni and keep them updated on the team's progress. It's important to keep people feeling like they're in the loop to sustain interest in the program."
HIGH SCHOOL STRATEGIES
While asking alumni to give back to their sports can work well at the college level, self-funded high school teams usually take a different route. Their strategies focus more on tapping parents and the community in a number of ways.
In the Juniata County (Pa.) School District, nearly all athletic funding for 2011-12 was cut to help offset a budget crunch caused by a reduction in state education budgets. Rod Hart, Athletic Director at East Juniata High School, and Jerry Auker, Athletic Director at Juniata High School, came up with a plan to ensure that athletics continued through self-funding. It includes participation fees, team fundraising, and bringing in money through admissions fees and concessions.
The school district took responsibility for collecting the student-athlete fees, and used that money to pay half of coaches' salaries and all game officials' stipends. Team booster clubs were then responsible for raising the money for everything else, including transportation, equipment, and the other half of the coaching salaries. Hart and Auker decided that if a sport could not pay its bills, the season would be forfeited and there would be discussion about either creating a co-op with the other high school or totally eliminating the sport.
"Under the new participation fee, each kid, no matter how many sports they want to play in a year, must pay $250 per sport," Hart says. "We also included language for different circumstances--if an athlete quits, he or she is not reimbursed any of their $250, but if an injury occurs, a prorated reimbursement is given."
Beyond participation fees, East Juniata has begun charging admission for more sports than ever before, including junior high school contests. "We also eliminated discounted tickets for students and free passes for senior citizens," Hart says. "I made sure to communicate that information well in advance so there wouldn't be any surprises when fans showed up to the game. There were a few people who were upset, but once we explained that this money is necessary for these sports to exist, our fans were very understanding."
Teams have also been fundraising, with one of the most successful ventures being the East Juniata softball team hosting a large tournament this past fall, which raised money through entry fees and concessions. "Our softball coach had teams coming in from other states to play and raised almost $10,000, which is his entire budget for the spring," Hart says. "He showed a lot of initiative and ingenuity in getting the tournament set up and he did a phenomenal job. I'm hoping other sports can think outside the box and do things like that."
While there was some initial uneasiness when the changes were announced last summer, Hart says self-funding has gone about as well as he could have hoped. "At first, the booster clubs panicked and they were selling everything under the sun to make money," he says. "People were worrying that they wouldn't be able to generate enough funds to operate. But as the school year has gone on, most of the sports have found that their gate admissions and concessions stands have done far better than what they ever imagined, and a lot of sports are actually building up a surplus."
In the Duval County (Fla.) School District, a $90 million budget shortage announced in May 2011 threatened to eliminate 10 of the district's sports: boys' and girls' cross country, boys' and girls' golf, boys' and girls' lacrosse, boys' and girls' tennis, slow-pitch softball, and wrestling. Fortunately for student-athletes in the district, a community-wide fundraising drive, combined with cost-saving measures-, such as eliminating some assistant coaching positions, netted more than $500,000, enough to restore all of the teams before the school year began.
Each affected sport at the district's 17 high schools was responsible for fundraising together as a group, and Duval County Athletic Director Jon Fox helped find leaders for each. For example, someone who worked with the North Florida Junior PGA Tour helped lead the golf teams, and the wrestling group was headed up by the local wrestling officials' association. Fox worked with each sport, attended their meetings, and helped plan fundraising activities.
A big part of the fundraising entailed asking for donations from community members. To help kick-off the drive, the school district partnered with a local sports talk radio station for a full day of fundraising. Fox, coaches, and student-athletes from every affected sport joined the radio hosts to talk about the importance of high school sports, while parents manned the phone banks. Listeners could pledge money to a specific sport or a general fund, and the district raised about $25,000.
"It was a great way to begin the effort," Fox says. "It gave us the opportunity to have people from all the teams and all the schools in one place and have them work together."
Individual teams also had success with their own fundraisers. For example, the 17 boys' and girls' cross country teams in Duval County worked with Doug Alred, owner of 1st Place Sports, a chain of running stores in the state, on a two-prong effort. The first piece was holding community races, including a 5K Stadium Challenge, held at EverBank Field, home of the NFL's Jacksonville Jaguars. The course led runners around the stadium, up and down the ramps connecting different seating areas, and through concourse areas. The event attracted 1,500 runners and generated $50,000 through entry fees.
The second part of the strategy was soliciting donations. Alred used his company's Facebook page and e-mail list to spread the message, and soon donations from $20 to $15,000 started streaming in.
The district's tennis teams raised around $20,000 by hosting a clinic featuring four professional players: Todd Martin, Mal Washington, Brian Gottfried, and Amer Delic. After morning and afternoon clinic sessions, the pros came in during the evening to do a demonstration and play a match.
"The teams also did all the smaller things that you might expect," says Fox. "They sold pizzas, held raffles, and put on silent auctions."
Because certain sports have more community support than others, Fox took steps to ensure each one had an equal chance of staving off elimination. Some of the money raised, like from the radio drive, went into a big pot, and it was okay if a few sports dipped into the pot more than others. He also emphasized to the community the importance of helping every program.
"I tried to make a strong point about how every sport is vitally important to the athletes who participate in it," he says. "It doesn't matter what the sport is. If that's your sport, it means just as much to you and your life as the kids in a different sport."
To further that point--and also alleviate any Title IX concerns--Fox gave each team a "partner" in the fundraising fight. "For example, if tennis came back, it was coming back as a whole--boys and girls," he says. "For wrestling, which doesn't have a female counterpart, we matched it up with slow-pitch softball, a team with almost identical participation numbers.
"It ended up being a beautiful thing," Fox continues. "There were kids from different sports and different schools working together. That's one of those invaluable lessons that we didn't really see from the onset. I think many of those relationships that were formed continue to exist."
Going forward, Fox expects many of the more successful fundraisers, like the radio drive, 5K Stadium Challenge, and tennis clinic, to continue. The district will also implement participation fees, and it is in the process of setting up a foundation where teams could go and request funds for a specific need.
WHO'S IN CONTROL?
While raising enough money is the immediate concern when teams become self-funded, it's also critical to think about administrative and leadership issues. One problem that often crops up is oversight. If parents, donors, or a booster club are fully footing the bill for a team, they might want control over the inner workings of the program.
At Cal, Barbour has found herself willing to give the Baseball Foundation a voice. "It's still the University of California baseball program within the Cal athletics department and there are certain things that are expected of each of our programs in terms of policies," she says. "But there's no doubt the Cal Baseball Foundation deserves a seat at the table. We've talked about that in terms of filling an advisory role and letting them look over the books.
"Ultimately the decisions remain with the university, but there are a lot of smart people who are part of the Cal Baseball Foundation, and they're singularly thinking about how to make Cal baseball financially sustainable," Barbour continues. "They have the opportunity to offer ideas for improving some of our revenue streams."
At Mechanicsburg (Pa.) High School, which has self-funded boys' lacrosse and boys' and girls' water polo teams, Athletic Director Andrea Teeter weighs the feelings of parents of the self-funded teams heavily when picking coaches for those squads. "We just recently hired a new lacrosse coach, and the booster club was involved in the hiring process," she says. "I wanted to make sure the coach we picked was someone they could work with. The booster parents are more or less paying for the team, and if everybody in the club hates the coach, they might not be as willing to fundraise."
Teeter has also provided the Mechanicsburg boosters with a look at the athletic department's inner workings. "They always have questions about how the schedule is made and how transportation works," she says. "So I've shown them why and how things work the way they do."
In other areas, though, Teeter has had to rein boosters in. "Sometimes they don't understand that they have to follow school rules," she says. "Our district limits our booster clubs to three fundraisers per year, but parents think those rules don't apply because they're funding the team themselves. Parents have also wanted to purchase new uniforms every year, since they're paying for it. But our policy is to have a five-year rotation on uniforms, and they have to comply with that."
Boosters have received a bit more control at East Juniata, too, and Hart says it's worked out well. "One coach told me he likes it better now," Hart says. "He's looking at buying new uniforms, and now he doesn't have to go through the district, take the low bid, and wait to see what a bean counter in some office says. The coach can find something he likes, talk to the boosters, and purchase them."
Next year, Hart is hoping to give the coaches and boosters a little more ownership, in the form of determining the fee they'd like to charge. "I want to eliminate having one set price," he says. "Maybe the golf team only needs $50 per athlete, but the football team needs $300, so let the boosters set that."
However, Hart is still in charge of scheduling, hiring coaches, and other administrative decisions, and he made this clear at the start of the school year through a meeting. He also explained there would be some hard and fast rules all teams need to stick to.
"There was a football coach who wanted to hold a practice on Sunday, but there is a school policy against that," Hart says. "He argued that the kids paid their fees, the school doesn't have anything to do with it anymore, and they should be able to hold practices whenever they wanted. I needed to explain to him that we still had to follow school rules."
IN IT TOGETHER
Keeping rules consistent across school- and self-funded teams will also go a long way in maintaining a sense of community in the department. "Overall, we don't segregate these programs," says Quant. "We don't state at every opportunity that these are our self-funded teams. We don't deny it, but as far as we're concerned, they're 11 of our 36 sports and we try not to have that factor into decisions we make on scheduling and facilities. Really, the only time there's any distinction is when we're prepping a budget. We work hard to not make them feel like second-class citizens."
The same is true at Cal. "We don't draw lines between the sports based on how they're funded," says Barbour. "One way I look at it is that we've always had a disparity. Men's golf has been self-supporting for a while, and we've had football and men's basketball that pay for themselves, then everybody else is somewhere in between. Some programs receive more funding than others. Some have better fundraising capabilities. Some have more potential for commercial income. So we've always had some differences. Self-funding is just more stark because it's completely at one end of the continuum."
And, in some ways, the differences among sports at Cal were also forgotten when it came to saving them. "The beauty of it all was that even people who didn't have a particular affinity for one of the five affected sports supported the effort because they believed in having participation opportunities for our athletes," Barbour says. "That says a lot to me and was very heartening to see."
Self-funded sports teams at Cornell University are nothing new. More than 15 years ago, the athletic department decided to make 11 sports self-funded, with the teams' expenses limited to the revenue they were able to generate. Now, Cornell is in the midst of an initiative to make those 11 programs self-sufficient within the next four years. What's the difference?
"Previously, when we said teams were self-funded, it meant they were covering their direct costs, such as travel, equipment, uniforms, office supplies, and all that," says Larry Quant, Cornell's Associate Director of Athletics for Financial Operations. "We had never allocated indirect costs to them for things like media relations, strength and conditioning, the compliance office, or even the overall administration of the department. But those are costs that we incur, and we are now asking the teams to cover them."
To determine how much to charge for indirect costs, Cornell came up with a formula. "There are two parts to it," Quant says. "One is an objective measurement. We know what it costs the athletic department to run our compliance program, for example. We take that number and then divide it by the total number of teams in the department.
"The second part is a subjective component, because not all of our sports use all of our services equally," he continues. "For example, football makes full use of the strength and conditioning program, but polo probably does not. So for every unit (strength and conditioning, media relations, etc.), we assign each sport a number between zero and one, in increments of 0.2. One means they receive full service from that unit, and zero means they receive nothing. Then we calculate how much cost to attribute to each sport and multiply it by that factor."
Mechanicsburg (Pa.) High School, which has self-funded teams in three sports, debated whether to include indirect expenses before ultimately deciding against it. "Anything that is outside the scope of the athletic office as far as officials, transportation, coaching salaries, and security is billed to the booster club," says Athletic Director Andrea Teeter. "But we decided to let the teams use our facilities at no charge, and we don't submit a bill for the services of myself or the athletic trainer. It is a sign of good faith from the school."