PROVO — For the adoring BYU fan, this is the ultimate family reunion.
Don't worry about name tags — former BYU greats Steve Young, Jim McMahon, Steve Sarkisian, Robbie Bosco, Ty Detmer, Marc Wilson, Virgil Carter and Gifford Nielsen will be easy to spot.
No pads or passing plays this time; instead, on Friday and Saturday, the All-American quarterbacks will be throwing their support behind the football program that propelled them into the NFL or successful sports careers.
The goal is to raise a million dollars to endow four BYU football scholarships.
Don't know what an endowed athletic scholarship is? Well, you're not alone.
"When I had heard about other universities doing those kinds of things before, I really hadn't paid much attention to it," said former Y. quarterback Wilson.
Schools create endowed scholarships for athletes, students and even funds for professors' salaries by investing large donations, then relying on the interest year after year without touching the principal investment. BYU has endowed athletic scholarships for nearly 15 years, but the emphasis really began in 2007, said Duff Tittle, BYU's associate athletic director of communications.
It's a trend that's becoming increasingly common across the country as college athletics programs enter a new arms-race era. To stay competitive, universities are having to spend like never before.
The Cougars are joining a growing group of universities that are rushing to keep up with the Stanfords and the Dukes — schools with hundreds of endowed athletic scholarships and millions of regenerating endowment dollars.
Those huge reservoirs allow colleges greater financial freedom to bring the best athletes, build the newest facilities and boost their fan base, which they hope will, in turn, generate more money for the university overall.
And in an economy where every dollar counts, filling those accounts with self-perpetuating funds isn't just nice — it's becoming necessary.
So, let's say you're a die-hard football fan who has an extra $250,000 kicking around your bank account.
Rather than just blow it on football memorabilia, you want to gift it to your alma mater. Together with school officials, you decide you want to create a scholarship to honor your father, who played tight end for the Cougars.
Universities then invest that money in stocks, bonds, real estate, international bonds, etc. — most often in higher-risk but higher-return funds due to the long-term nature of the account, explained Steven Thorley, finance department chair in the Marriott School of Management at BYU and endowments expert.
A common annual return is 8 percent, with a usual withdrawal amount of 5 percent. Thus, the 3 percent growth each year covers inflation, leaving the money in the fund with the same scholarship-funding power year after year.
It's a great system — until the stock market plunges. Then, what used to be a robust 8 or 10 percent return atrophies to a measly 1 or 2 percent, or even worse, to losses.
"University endowments (nationwide), like all other large sums of investment money ... they've all taken hits," Thorley said, "and in some cases, they were severe."
Some universities across the country are holding scholarships, stalling building projects, underfunding classes or programs, or instituting hiring freezes. BYU has been on a hiring freeze since Dec. 19, 2008.
"The recession has affected scholarship endowments just as it has affected every other type of fund that relies on investment returns," said BYU spokesman Michael Smart, speaking of academic scholarships. "Some scholarships are on hold. But because nearly every endowed scholarship is granted on a one-year basis, commitments to students have been upheld."
BYU weathered the storm better than most because it is less dependent on endowments, thanks to financial support through the LDS Church, Thorley said.
BYU's overall endowment, which includes athletic endowments (numbers are not released by the university), is separate from tithing dollars received. The athletic budget is also separate from tithing funds and is all self-generated.
"Endowing scholarships is a big priority for us right now," Tittle said. "It frees up a lot of other funds that can be used to help run the program. (It also) creates a philanthropic cycle of connecting to the past and the present. We've found that if people can see the value of their donation, and they can feel good about it, makes them want to be involved even more."
A full-ride athletic scholarship at BYU requires an initial $250,000 donation, Thorley said.
Currently, BYU has 254.7 scholarships available for 588 student athletes. Those scholarships range from 25 percent to a full ride (room, board, tuition and books) and can be broken up and shared among athletes, Tittle said.
BYU has nine fully endowed scholarships, with three for football. Another 45 athletic scholarships are partially endowed, with six of them for football.
There is also an endowment reservoir for maintenance on the Indoor Practice Facility and the Student Athlete Building.
During the 2008-09 year, the University awarded nearly 3,200 academic scholarships from 400 endowed scholarship funds, with large concentrations in the colleges of engineering, business and fine arts.
One of the first academic endowed scholarships was the Edwin Smith Hinckley Scholarship, which began in 1954 and is given to juniors or seniors.
Past recipients include Rex Lee, Mitt Romney, BYU's current academic vice president John Tanner and LDS Apostles Jeffrey R. Holland, D. Todd Christofferson and Neil L. Andersen
"Endowed scholarships have an extremely long-lasting impact," said Bruce Snow, executive director for LDS Philanthropies at BYU. "To borrow from Mormon history, it's sending back the wagons. As an alumnus, you've received such a great opportunity, a great education here, and now your desire to help others follow you, especially in these trying economic times, is very commendable."
Dan Paxton considers his time at BYU life-changing, and now he and his wife, Diana, are showing their thanks through two endowments — one for a female athlete and another for a married MBA student.
"In my mind, it's more than just a university," said Paxton, chairman of the Athletic Leadership Council at BYU. "It helps people grow and develop and mature and prepare themselves for life's work. It's more than just giving a donation; it's trying to give back what I received when I was there."
Fans and donors have been sponsoring their favorite teams as early as 1923, when Yale established, through an endowment, an award for the winner of a varsity football punting competition. Now, Yale has more than 60 athletic endowments, though the funds go toward transportation, recruiting, facilities, etc. — not individual students. Yale only awards need-based, not merit-based, scholarships.
On the other side of the country, Stanford offers 348 endowed scholarships to nearly 525 student athletes, with an endowment portfolio believed to be in the hundreds of millions.
"Arguably the Cardinal's most effective recruiting tool, endowed scholarships are the lifeblood of the athletic department and are often a determining factor when a recruited student-athlete is deciding which university to attend," according to a Stanford publication. Stanford declined to comment for the article.
In South Carolina, Clemson offers 252 full scholarships for 500 student athletes. In the early '90s, they had nearly 90 endowed athletic scholarships, but pressing facilities needs required a change of plans, said Bert Henderson, executive director of IPTAY, the Clemson athletic fundraising organization established in 1934.
Clemson worked with donors to release the funds from scholarship endowments and funneled them into much-needed renovations to facilitate recruiting.
"You want to put as much away for a rainy day as you can," Henderson said, "but we have to keep our house going."
The endowment program at UCLA began in the mid '80s when a group of donors devised the concept of "four deep," or endowments for four players of one position.
Now, UCLA offers 300 endowed athletic scholarships with nearly 70 for football, said Shawn Heilbron, associate athletic director of development at UCLA.
The school is looking at endowing coaching positions and will likely roll out something next year, Heilbron said.
For decades, UCLA focused heavily on building its endowment but in recent years worked more on capital projects and building the annual fund. When they complete their $130 million renovation of Pauley Pavilion, they'll focus again on endowments, Heilbron said.
As a public school, the University of Utah relies heavily on state funds, ticket sales, fundraising and money from generous donors "just to turn the lights on every day," said Doug Knuth, associate athletic director for external relations at the University of Utah.
"We all dream and wish that we could focus on endowments," he said. "Securing the future, that's a brilliant idea, and the dream is to raise more endowment funding, but the need is currently to do everything else, unfortunately."
The Utes operate on a $30 million athletic budget with a $5 million endowment pool. They offer 40 endowed athletic scholarships with a handful of football-specific endowments and four fully endowed football scholarships.
University of North Carolina has been endowing athletic scholarships since 1968, but the $35,000 gift for a full scholarship endowment is now $500,000, said senior associate athletic director John Montgomery, also the executive director of the Rams Club.
Nearly 850 donors have endowed full or half athletic scholarships, including 85 for football, and those gifts assist nearly 450 students each year, he said.
The economic slump took UNC's endowment fund from $200 million to $160 million, which pays out about $8.5 million each year.
The interest was enough for last year's scholarship costs, but this year, the athletic department will most likely have to supplement the scholarships with its annual fund and other fundraising, Montgomery said.
Utah State University, through its $2.4 million athletic endowment, offers 33 endowed scholarships with 14 for football, said Kent Stanley, senior associate athletic director at USU. The school also has four other endowments that are used for facilities and equipment, rather than scholarships.
Utah State hopes to complete a $400 million capital campaign by 2012, with a focus on endowments, because "that's how you secure your future," Stanley said.
Although the economy has slowed down the donation process — what used to take several months may now take years — devoted fans are still devoted, he said.
"People who have been philanthropic continue to be philanthropic," Stanley said. "Donors have a passion for whatever it is they want to support."
To help BYU fill its coffers, eight months ago, former BYU quarterback Nielsen pitched Wilson and the other six All-American quarterbacks who will come to Provo this weekend the idea of a fundraising "Y. Quarterback Weekend" with the million-dollar goal.
"If the endowment can cover the cost of one scholarship, it frees up other monies," Wilson said. "And that's the idea — we'd like to help some way. It's Gifford's idea, and it's a great idea, and I'm totally behind it."
"The ultimate end is to endow all our athletic scholarships, and we believe that can happen over time," Tittle explained. "This movement by the All-American Quarterbacks is a great start. (It will bring) a lot of attention to the program and what we're trying to do. And it's just a great thing to have them all back on campus at the same time."35 comments on this story
It's been a long time since Heisman Trophy winner Detmer has been back to Provo, but he said he's excited.
"BYU's done a lot for me over my life, and you always want to give back, help give the next guy a chance and help the school out," Detmer said. "I think, more than anything, being part of a special weekend with all of the other former quarterbacks, seeing those guys again and being there for the game is going to be a lot of fun."
Contributing: Jamshid Ghazi Askar