Written by Matt Trenary    Wednesday, 29 August 2012 11:33    PDF Print Write e-mail
Q&A: How Auburn Rugby Got an Endowment
Columns - Op-Eds


This story originally ran on GrowRugby.com. Started by USA Rugby's and the University of Michigan's Matt Trenary, as well as former USA Rugby employee and current Wheeling Jesuit coach Eric Taber and a few others, GrowRugby.com is a site devoted to sharing ideas on how to grow the game in America. From time to time, we will repost GrowRugby stories here, with permission.

Brad Kilpatrick of World Rugby Shop fame sat down with me to discuss his involvement with Auburn University’s rugby program. Brad has been instrumental in helping the program start an endowment within the university. A handful of college programs have developed resources in this manner, most of them are extremely successful. It’s nice to see that it’s possible to add to that group with some simple communication and we hope it helps Auburn develop on the field.

MT: Was this student or alumni driven?
BK: It has been a pet project of mine for some time so I just put the lash into a few fellahs and luckily several of them are pretty buttoned up guys and we ran from there.  Definitely alumni led though.  It really just took a couple of us harassing everyone and making a really big deal out of the Old Boys game.  We had it setup to accept donations online ahead of the event and ongoing, but also solicited big donations at the event.  The university to their credit were falling all over themselves to help us give them money and they did a great job helping us find corporate matching (if people’s employers participated) and all of that.

MT: Do the donations come through the university or is it privately held?
BK: We have it setup so that the University manages all of the endowment money and all money earmarked for the endowment is eventually donated to the University directly.  That said, our alumni organization is setup as a 501c3 and often accepts donations for the purpose of aggregating donations and making single lump sum payments.

The upside to working with the University, at least for us, was we got a lot of intangibles.  Because we are only the second club sport to setup an endowment we now get preferential status for field spacing, club sport funding, etc.  It isn’t officially stated, but the head of student affairs basically told me in a meeting that anytime the decision to allocate resources comes down between rugby and another non-endowed club (and thus a club that has not contributed to the schools ranking and endowment) rugby is going to win every time.  Hell we just got our field resodded after 10 years of asking (literally) about 4 months after establishing it.  Very good for university relations if nothing else.

MT: How much money is currently endowed and what is your goal?
BK: We started with $10,000 the first year and plan on raising at least that each subsequent year.  Obviously the more the merrier, but I think the first milestone will be $100,000.  That would provide roughly $4,000 a year in payouts (the rest of earning would be reinvested into the fund to grow the principle) which would go a long way to covering and defraying basic operating costs so that other fundraising can go to larger capital projects and equipment upgrades.

MT: What are your goals with the money?
BK: The idea was to grow the fund to a point that we cover the following expenses in this order of importance:

  1. All league/tournament fees
  2. Basic equipment/uniforms
  3. Coaching
  4. Travel Costs
  5. Scholarships

The idea is to start with the fundamentals first and then expand from there.  Once the basic fees and equipment are covered, coaching is obviously the most important thing you can get.  Without good steady leadership that exists outside the volatility of student leadership (seniors graduate and may or may not have a good successor) it is difficult to have a consistently good program.  Once we have that, covering less fundamental operating costs like travel so that students don’t have to take it on themselves with scholarships being the terminal goal once the rest of the program is fully covered.

MT: Was there a minimum amount you had to come up with?
BK: At Auburn it is $25,000 to seed an endowment, but you can reach that amount over the course of 5 years with a minimum donation of $5,000 a year.  So the minimum exists, but to be honest if you can’t raise $5,000 a year you aren’t trying hard enough.

MT: Why is this better than just spending the money up front and enhancing the program that way?
BK: Better is not how I would think of it.  Rather you need to think of an endowment as a compliment to what you are doing currently and a stable revenue stream.  You should never stop doing direct fundraising, but hopefully accommodate both.

Endowments are capital intensive and have relatively low payout at roughly ~$1,000 per $25,000 of principle.  This turns a lot of people off to the funds given you can get a lot more immediate value out of simply spending the money you fundraise.  But the thing to keep in mind is that these funds last forever and accrue interest over the course of their lifetime.  Compounding interest is the 8th wonder of the world and down the track this can be massive.   Having an endowment that makes principle very difficult to access also provides large donors with more peace of mind regarding how their death bed money, so to speak, might be spent.  Knowing that they are creating a lasting legacy can open up a lot more potential donations.

So in an ideal world, you have an endowment that churns out a consistent revenue stream to supplement (initially) your operational budget and grows long term and indefinitely with your direct fundraising taking on immediate needs and other one off capital projects.

The other piece of this is the legitimacy that having a large endowment buys you with the University.  They are much more likely to take your request seriously when you are actively contributing to their bottom line.  We have seen a dramatic improvement in University relations with a simple $10,000 endowment in year one.  I can’t even imagine how much better we will be treated if we have $100,000 in the coffers.  So it is also a great political tool as well.

MT: I’m sure there are teams out there that want to do this but don’t know where to start, what do you suggest?
BK: Contact your University.  Universities are graded on numbers and amounts of donations as well as the size of their endowments.  Rankings are hugely important to most universities and if you are offering to help them improve their rankings and fundraising they will be game to help.  In our case, the University setup the online donation portion, sent out representatives to discuss how to set everything up, structure the endowment, and even offered to help us fundraise by finding old players that had lapsed from our own Alumni records.  If your school will not help you, there are a number of private investment groups that will help guide you through everything.  They typically charge higher fees and require higher minimums however, so try your university first if you can.