Real Money

By Staff

Athletic Management, 16.4, June/July 2004,

Many schools have endowment funds to help provide money for student-athlete scholarships. But at Baylor University, thereís a twist: One endowment is managed by students.

Using the annual return from a $5.2 million endowment, the Phil Dorr Alumni & Friends Endowed Investment Fund issued its first checks in February, giving the athletic department $75,000 for three athletic scholarships (and the business school $20,000 for an MBA student scholarship).

"This is a great example of multiple parties coming together for mutual benefit," says Baylor Athletic Director Ian McCaw. "Itís a unique and exciting project, where Baylor business students can get practical experience in managing a portfolio and support the athletics program at the same time."

The fund was started in 2000 with a $250,000 contribution from Dorr, a Baylor alumnus who wanted to set up an endowment to fund scholarships for student-athlete business majors and ensure that Baylor business graduates would have experience managing investments. Working with Terry Maness, Dean of Baylorís Hankamer School of Business, and a group of business alumni, university fund-raisers were able to then enlarge the fund considerably.

"From a business school perspective, itís working very well for us," says Maness. "This isnít just a paper project with paper losses. Itís a chance for our students to manage real money, report on it, and be accountable for it. These are real gains and losses, and the better our students are able to manage these funds, the more scholarship money is going to be produced."

Although Baylorís program is not the only student-managed endowment fund in the country, itís the only one Maness knows of that is used to fund athletic scholarships.

"Thereís no question that this type of endowment has great potential at other universities," says Doug Smith, Associate Athletic Director for Athletic Development. "From an athletics standpoint, it helps the department gain additional revenues, and from an educational standpoint, it benefits the students by giving them the opportunity to manage such a program. Itís a positive situation for everyone involved."