Shooter: Some people wonder whether the U would dare plunge into its $2.3B endowment

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BleedGopher

BleedGopher

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per Shooter:

Some people wonder whether the University of Minnesota, to make up for huge financial losses in athletics due to coronavirus, would dare plunge into its endowment fund, valued at $2.3 billion.

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Go Gophers!!
 

If they take from it, will be a while before they can bring it back up. Quite a goose egg though.
 

As good a time as any. Pandemic, Stock market in bubble territory.
 

The endowment is not a homogeneous lump of cash. It's made up of many different gifts to the school, which often have their own stipulations on how they can be spent.

The much better course of action, if the school can't convince the state to fund the gap, is to simply take advance of record low rates and borrow the money.
 

My understanding is the donated endowment money has strings attached as per what it can be spent on, and generally only interest not principal is available. There may be some emergency exceptions but I doubt funding the athletic department is one of them and that wouldn’t go over well with other hungry entities on campus...

Private donations may increase to help cover the smoking crater in the budget but that’s unknowable at this point.
 


Again, the athletics budget is basically tangential to the topic of the total operating budget of UMN. It's like, a peanut.

If the school itself sees major decreases in revenue this year, that will be the more interesting thing to see how they'll deal with it. I would again propose a combination of state funding and borrowing. Let's see what they think.
 

MplsGopher said:
Again, the athletics budget is basically tangential to the topic of the total operating budget of UMN. It's like, a peanut.

If the school itself sees major decreases in revenue this year, that will be the more interesting thing to see how they'll deal with it. I would again propose a combination of state funding and borrowing. Let's see what they think.
Click to expand...

On a a national level state funding of higher education typically drops after an economic shock, and this certainly qualifies. Politics, lobbying to ensue in MN and elsewhere. Crystal balls are hazy as to what will happen over the next 1-2 years.
 

Maybe Northwestern could spare us a few mil...their endowment is just over $11B...
 

I believe the endowment is higher than what he stated.
 



The some people who wonder about the endowment being used should take note that Coyle estimates it would take 60 million new endowment dollars to endow the 58 scholarships proposed to be cut.

using Coyle’s math. It means taking 75 million out of the endowment to fix the 2020-21 athletics gap would be about 70-75 unfunded scholarships moving forward...every year until the endowment is replenished


Any money taken out of the endowment short term to fund something creates a longer term funding gap.

whereas cutting begins to solve a problem both long and short term.
 

They literally can't take money out of the endowment. That's not a thing. You can't just rip a piece of the principle donation out, any time it suits you. You get to use whatever is generated in returns, according to the stipulations of the donor, and that is it.

The shortcomings in the athletic dept revenue this year, will be patched by borrowing. That is simply the long and short of it. End of story.
 


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