Managing Your "Precious" Resources

This post is #1 in a 4 part series based on Tim McMurray’s original blog “ Always Cultivate Your C.R.O.P.”

RESOURCES

This is not just about having the biggest budget or raising the most money, but an effective approach to resources should focus on two key principles – efficient management of budgeted resources and maximizing opportunities to generate external revenue. The management piece means looking at all areas of expenses. One practical example of this is a recent audit we performed of our data systems in our department relative to compliance functions overlapping with student-athlete communication and forms. We were using five different systems, and we are in the process of reducing that to only two that can free up resources to invest directly back in our sports programs and student-athlete experience.

Tim McMurray, Athletic Director – Texas A&M – Commerce

Working in Small College Athletics means that we have to stretch every dollar to its limit. To be honest, not a day goes by that I don’t contemplate the need for or how to allocate resources. It seems that all of our problems could be solved, if only we had two million more dollars, every year. Unfortunately, more and more small colleges are facing budget cuts at a time when budgets are already pushed to the limit.

As Tim points out above, our universities rely on us to be good stewards of the funds that we are allocated. In my department, I require our coaches to live within their means. There is no fall back account to cover overages and no grace period for budgetary insolvency. Coaches must carefully consider expenses and develop a plan to raise funds to cover expenses they might face beyond their budget. Naturally, I also want coaches creating a vision for where they want their programs to be, and 9 times out of 10 that vision will require resources.

In the paragraph above Tim points out two keys as they relate to resources. Let’s examine those keys in a little more detail.

Efficient Management of Budgeted Resources

Tim provides an example of how his department saved funds merely by combining overlapping efforts. In my department, I have 22 varsity teams that all operate on independent budgets. Each coach has the ability to make spending decisions from their budget and like Tim, from time to time, we find ways to save money by “considering the whole.” The best example of this occurred in the past two years involving team travel. Many of our team’s chartered busses for travel, to the point that we were spending well over $150,000 per year as a department. One of our coaches brought up the suggestion of buying our own busses which led to a larger conversation of what the pro’s and con’s of owning vehicles would be. Ultimately, we decided as a group to spend $220,000 to purchase 3 used busses. The university fronted the money to purchase the busses and participating teams contribute $3,000 per year(for 5 years) to pay the university back. In some cases, this saved teams $7,000 - $10,000 per year in annual expenses that they can reallocate to other needs within their sport. Is this an ideal approach? No. Did it help our teams expand their budgets and accomplish more? YES.

It is important to be strategic when considering your expenses. Unfortunately, many small college athletic departments have faced budget cuts in recent years or rising costs for things like insurance, official’s fees, or transportation. There is nothing like a university mandated budget cut to make you examine where you are spending money. My advice is don’t wait until you are forced. Take a good look now at your detailed expenses and see if there are any opportunities to save.

Maximize Opportunities To Generate External Revenue

Tim and I both have backgrounds in fundraising. It’s a good thing because wherever we have worked we have always had to rely on external revenue to accomplish our goals. Ultimately you reach the point(and many of us are already there) where you just don't have any fat in your budget left to cut! Whether you are operating at peak efficiency or not it is critical to place an emphasis on generating external revenue. When budgets have been cut on our campus I often remind coaches that “at least we have the ability to go generate funds.” This option is not as immediately available to the History department, who also faces cuts.

Keep in mind that building programs that generate revenue for your department is a long-term endeavor. As Matt Donovan likes to say, “Rome wasn’t built in a day!” This is great advice coming from a guy who built his annual fund from 20 donors, when he started, to over 2000 today. It is unlikely that you can start an annual fund this year and solve all of your problems. However, you can develop relationships this year with new donors, or sponsors, or through a special event that you can maintain for 5, 10, or 20 years that will provide on-going financial support for your students, coaches, and department.

My advice is to start with a plan. Use the plan to sort out the mechanisms that you will engage in to generate revenue, to estimate the costs associated with the effort, and to think about the timing involved in carrying out your strategy. Then plot the steps necessary to move forward with the plan. With some consistent effort and diligence, you will see the dollars that you generate externally grow from year to year. The key to success here is putting in the effort, engaging supporters, and building a culture in your department that supports external programs.

Revenue Generation Components:

1. Annual Fund – Booster Club or some other mechanism through which individuals or corporations can philanthropically support your efforts year round.

2.Sponsorships – Menu of opportunities that businesses may purchase to promote themselves through your department.

3. Special Events – Golf tournaments, banquets, or other events designed to raise funds.

4. Other – Facility Rentals, Ticket Sales, Concessions, etc.

The one constant about RESOURCES is that there is never enough of them! Consistently examine where your resources are going, what your true priorities are, and opportunities to find external sources to help you. If you’ll be committed to doing this you will find yourself much better off than your competition and highly valued on your campus.