Last week I mentioned my work with a nonprofit agency in the city I’ve called home for thirty years. You may recall that to attain nonprofit status, an organization must provide something of benefit to the community it serves (Kenton, 2020). My employer, for example, focuses on meals to homebound seniors, financial literacy, and transportation in parts of town where the bus is inaccessible.
It seems like a stretch to compare the efforts of my agency to a major sports organization that holds contests in front of thousands of fans plus the millions watching on television. Yet it might surprise you that like us, the NCAA and the athletic programs that make up its membership are considered not-for-profit organizations. As an expert in antitrust law tells Barnhouse (2018), whereas most nonprofits emphasize the mission over money, the mission in collegiate athletics is to make money.
Why is that? As it turns out, many of the programs in the major football conferences, otherwise known as “Power Five,” spend more money than they bring in. Hobson & Rich (2015) analyzed the data of schools in these conferences for the Washington Post and found that more than half of the programs with available data operated at a loss in 2014. This includes big names like Auburn, Clemson, Michigan State, and UCLA. The review into program finances may explain the concern that many administrators who oversee the program expressed to McMurphy (2020) about whether there would be a football season in the wake of COVID-19. As one anonymous director said, “Quite simply, it would be devastating” (para. 4).
What’s more, the relationship between on-field success and general fundraising dollars is unclear. Some researchers have found that donations to a university can be predicated upon superior athletic performance, while other researchers do not believe that such a link exists (Staurowsky, n.d.; King, Sexton, & Rhatigan, 2010). If the latter group is to be believed, it can thus be implied that colleges would do just as well in the fundraising department without sports teams as they do with.
The very existence of sports at the collegiate level provides a challenge for those who raise money for the institution because it puts the school in competition with itself for scarce, valuable resources. However, this can be solved by making athletic giving part of the general university foundation (King, Sexton, & Rhatigan, 2010). The University of Iowa, where I received my undergraduate degree, structured its foundation so that alumni and other contributors can select from several categories that they wish for their donation to go. It could be used for athletics, the hospital, or a specific college (The University of Iowa Center for Advancement, n.d.).
Not only has COVID-19 put the college football season in jeopardy, but it has also made fundraising very difficult as events involving a large number of people cannot yet be held. Charitable giving had been in decline before the pandemic hit (Safo, 2019). Now the athletic and academic side of schools aren’t just competing with each other, but numerous nonprofits who are also feeling the effects. And that’s a matchup you won’t see in primetime on ESPN.
References
Barnhouse, W. (2018, June 4). Non-profit colleges bringing in ‘Fortune 500’ revenues through athletics. Retrieved from https://globalsportmatters.com/business/2018/06/04/colleges-bringing-fortune-500-revenues-athletics/
Hobson, W., & Rich, S. (2015, November 23). Playing in the red. Washington Post. Retrieved from https://www.washingtonpost.com/sf/sports/wp/2015/11/23/running-up-the-bills/
Kenton, W. (2020, April 29). Nonprofit organization (NPO). Retrieved from https://www.investopedia.com/terms/n/non-profitorganization.asp
King, E.H., Sexton, E.L., & Rhatigan, J.J. (2010, Spring). Balancing fundraising in academic programs and intercollegiate athletics. New Directions for Higher Education, 2010(149), 65-71. https://doi.org/10.1002/he.382
McMurphy, B. (2020, March 31). Will there be college football in 2020? Athletic directors weigh in. Retrieved from https://watchstadium.com/will-there-be-college-football-in-2020-athletic-directors-weigh-in-03-30-2020/
Safo, N. (2019, December 2). Charities worry giving will fall for a second straight year. Retrieved from https://www.marketplace.org/2019/12/02/charities-worry-giving-will-fall-for-a-second-straight-year/
Staurowsky, E.J. (n.d.). The relationship between athletics and higher education fund raising: The myths far outweigh the facts [PDF File]. Ithaca, NY: Ithaca College. Retrieved from http://priorities.weebly.com/uploads/8/8/6/0/8860813/athletics_and_fundraising.pdf
The University of Iowa Center for Advancement. (n.d.). Give to Iowa. Retrieved from https://donate.givetoiowa.org/s/1773/giving/19/home.aspx?sid=1773&gid=2&pgid=627&tag=agn&tab=tab1