Endowment schools

2,093 Views | 6 Replies | Last: 5 yr ago by Lagniappe
Gost8
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Can someone explain how endowments work for baseball ? I've heard talk that schools such as uva, vandy , unc and others have advantages that other schools do not share. Thanks
Pakbackr
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I assume they work the same for athletics as they do for the academic units, which is as follows: An endowment is a large donation that can be from one donor or many, which is invested. This initial investment, and all future gifts to grow the endowment, are known as the corpus. The investment would typically produce some annual yield, which becomes available as spending cash. At NC State, it doesn't matter how much an endowment grows in a year...a cap is set at 4% of the market value for spending cash. So, if you had a $1M endowment, and it grew by 20% (or $200K) in one year, we could only use $40K of that as spending cash in the upcoming year. In this example, the market value of the endowment would increase from $1M to $1,160,000...so, if you have another year of strong market performance, the max that could be made available increases to $46,400...and on and on. The idea for capping the spending cash at 4% is to allow the endowment to grow and the annual cash awards to grow with it...and to provide a cushion for the future when the market takes a dive. Unless it is explicitly allowed by an endowment agreement, you cannot make awards when the market value falls below the original corpus value. This is called an "underwater endowment" and you have to ride it out till the market recovers. But the great things about endowments, is that they provide funding in perpetuity...literally forever. So schools and athletic programs with large endowments are at a huge advantage. Was that the kind of explanation you wanted or was there a different question in there?
Gost8
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Thanks very insightful. Are they in addition to the 11.7 scholarship count or are they part of the 11.7?
Pakbackr
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An endowment would simply be one source of funding scholarships. The more endowments you have, the less of the annual WPC donations have to go toward scholarships. I doubt it has anything to do with the number of scholarships the baseball program has to award. But I could be wrong.
wilmwolf
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Number of scholarships is set by the NCAA.
Just a guy on the sunshine squad.
Gost8
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thanks
SportManagementEngineer
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Pakbackr said:

An endowment would simply be one source of funding scholarships. The more endowments you have, the less of the annual WPC donations have to go toward scholarships. I doubt it has anything to do with the number of scholarships the baseball program has to award. But I could be wrong.

This is pretty spot on.
Lagniappe
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According to the WPC website, baseball has a goal of $9.5MM in endowments. The baseball endowment is now at $4.2MM. So, it's time to pony up!
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