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Rutgers Finances: Gotta give 'til it hurts

With dwindling state support, public universities need other sources to support their work. Looking at you, alums!

This is another in an occasional series that On the Banks will be presenting on Rutgers Athletics’ financial situation.


Apparel and what it’s worth

What’s its value or what’s it worth?

Today: We really need to change the mindset on giving

When Pat Hobbs unveiled the R Big Ten Build some 14 months ago, the mantra was “all in”. Everyone needed to get on board the giving train in order to make the $100 million goal a reality. We all knew the issues with our facilities and we clamored - begged - for upgrades. And Rutgers responded saying, in very specific terms, this is what we’re going to build. And you, fans, are going to pay for it.

Where are we now?

The goal was $75 million in private donations to add to the $25 million tax credit. There was great fanfare when the first announcement was made last June, just five months into the campaign. There had been over $30 million raised in just the first six months of the operation.

By the end of 2016, after a pretty dismal football season but with great hope for men’s basketball, the numbers had grown.

Closer still. But some people were a bit nervous. Over all, that was about $3.7 million per month, and we were looking for another $31 M to reach the goal.

The most recent numbers on the R Big Build website? An increase of about $1.3 million in a month. The pace had slowed. But, in fairness, it was the holidays, and people had other places to spend money.

The point here, though, is not to focus on the R Big Build, although that is significant. Rather, it’s to look at how far behind Rutgers is in just raising money....period.

Class is in session

Pop quiz people. Multiple choice.

In the most recent reported year (2015-16), how much money did Rutgers athletics raise through contributions (outside the R Big Build)?

A) $22 million B) $17 million C) $12 million D) $8 million

If you said “A”’d be wrong. Also if you said B or C. According to the NCAA Final Financial Report we obtained through an Open Public Records Request, Rutgers athletics raised $7,980,762 in donations. That accounted for about 9.5% of the department’s entire budget of $83.9 million.

Want to see what our peers are doing? Go get a stiff drink, you’ll need it. I’ll wait.....

The elephants first. In that same time period, Michigan raised $36.9 million and Ohio State $33.1 million. That’s just athletics! For Michigan, that covered around 23% of its budget; OSU took care of almost 20% just through donations.

But it wasn’t just the big dogs who used donations to keep the ship afloat. Illinois’ intake in contributions accounted for just over 27% of its budget. Michigan State’s donations made up almost a quarter of its expenses.

While we don’t have all of the numbers for every school, suffice it to say, Rutgers does not fare well in this comparison with its Big Ten brethren.

It isn’t just athletics

Rutgers has a money problem. I know, not a shock to most of you. Like many state institutions, the support for the “state university” by the state has declined continuously for decades. Which means the cost of a Rutgers education is borne more by students and by other enterprises (e.g. donations).

A Fall 2014 story in Rutgers Magazine looked at that issue. Rutgers often states it has over 400,000 living alumni. But only 8% of them give back to Alma Mater. 8%! Not to insult your math skills, but that’s only about 32,000 donors. RU is trying to address the reasons why - you can read the story to learn more - and hopefully that improves.

But look at what the R Big Build wants in terms of donors. That number could be a challenge, although the key is to simply get as many people as possible involved. Let’s hope for the best.

And the number of donors a school has, as explained in that article, impacts the rankings by US News & World Report. And like it or not, that metric is used by a lot of students and parents as they choose a college. Much to the chagrin of some of our readers.

US News also illustrated just how many alumni do give back and where a school ranks nationally in that area.

As might be expected, Northwestern, the conference’s only private school as well as the smallest, had the highest percentage of alums giving. Among National Universities (as defined by US News), RU ranks at No. 152, tied with Michigan State, and the second worst among Big Ten Schools in terms of alumni giving.

Changing the culture

If only 8% of your alumni are donating, there’s a problem. If you can only support less than 10% of your athletic budget through donations while most of your peers are well ahead of that, you have a problem. Remember, with the exception of Nebraska and Maryland, everyone on that list is already getting its full share of conference revenue. When we do get our full share, that percentage for donations will be even smaller. And we’ll still be behind.

What is needed is a rethinking on the part of alums on their role in all of this. And that means that Rutgers as an institution needs to be working with its undergrads to build their loyalty and to figure out the best way to address them again when they’re alums. What’s also needed is a rethinking on the part of the citizens and businesses in this state on their role. For both athletics and the University as a whole.

Rutgers has started the process of connecting with undergrads. The Scarlet Council, while not a fundraising group or even one that encourages giving, is a student group working to improve the connections of undergrads with the University. And that is one of the most important reasons why people give as alums.

For the most part, though, if you’re reading this, you’re already likely a Rutgers fan. You want to see RU succeed, in all things. Most of you have probably given to the U, either the R Big Build or some other target. But, have you talked to others about it? Do you always stand up and defend the Scarlet?

I know. I’m preaching to the choir. Just wanted to make sure you knew how off key the music is.