"Poor Ole MSU?" SEC Endowment Analysis

[engie]

Been wanting to do this for awhile, but just getting around to it. All numbers are *1000 unless otherwise stated -- and sourced from here: http://www.nacubo.org/Research/NACUBO-Commonfund_Study_of_Endowments/Public_NCSE_Tables.html

2001
SECRnk	NtlRnk	School
1	10	Texas A&M	4,030,881
2	22	Vanderbilt	2,159,614
3	56	Missouri	738,500
4	70	Alabama	616,015
5	74	Tennessee	420,511
6	76	Florida	635,143
7	99	Georgia	399,963
8	105	Kentucky	419,211
9	118	LSU	326,122
10	119	Ole Miss	320,490
11	134	South Carolina	302,678
12	160	Auburn	258,965
13	174	Arkansas	233,858
14	237	Mississippi State	144,582

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2012
SECRnk	NtlRnk	School
1	9	Texas A&M	7,638,555
2	23	Vanderbilt	3,399,293
3	56	Florida	1,263,277
4	63	Missouri	1,171,758
5	73	Alabama	986,495
6	83	Kentucky	900,158
7	88	Tennessee	826701
8	96	Arkansas	770,550
9	98	Georgia	744,305
10	110	LSU	665,764
11	141	South Carolina	513,936
12	156	Ole Miss	461,913
13	157	Auburn	461,727
14	189	Mississippi State	343,857

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Growth Percentage(2001-2012)
School	Total	Yearly Avg
Arkansas	229.5%	20.9%
Mississippi State	137.8%	12.5%
Kentucky	114.7%	10.4%
LSU	104.2%	9.5%
Florida	98.9%	9.0%
Tennessee	96.6%	8.8%
Texas A&M	89.5%	8.1%
Georgia	86.1%	7.8%
Auburn	78.3%	7.1%
South Carolina	69.8%	6.3%
Alabama	60.1%	5.5%
Missouri	58.7%	5.3%
Vanderbilt	57.4%	5.2%
Ole Miss	44.1%	4.0%

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All #s * 1,000,000
School	33yr projection
Texas A&M	51,981
Arkansas	27,564
Vanderbilt	13,256
Florida	9,940
Kentucky	8,912
Tennessee	6,281
LSU	5,664
Georgia	4,797
Missouri	4,680
Mississippi State	4,626
Alabama	4,061
Auburn	2,617
South Carolina	2,516
Ole Miss	1,383

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This assumes the continued advancement pace of the past decade for all involved, which is of course very flawed, with a very big yearly variation, but is still the best easily-usable method of projection that we have available to us.

This should show everyone that our current business model is a very good one. It's currently the best in the SEC, outside of the financial mecca that is northwest Arkansas. As we continue to try our best to increase enrollment toward more parity with the majority of the SEC, these numbers should continue to improve for us, since we are essentially actively seeking more graduates, while many schools in the SEC are not actively looking to grow. Over time, I believe our reality will likely be better than this projection.

Thoughts?

 

[CadaverDawg]

Thanks engie. It definitely puts things into perspective. It should help everyone take a step back and look at our athletic program, and breath easier. We are often quick to jump on negatives, and try to climb that ladder so quickly that we fail to see how many steps up we've already taken in a short time.

We need to look at this as a huge positive, and everyone get on board to help push that same amount of growth over the next 10-12 years as well.

 

[HammerOfTheDogs]

Texas A&M has always had an Ivy League-level endowment, thanks to all the oilfields they own around the Bryan, TX area. I think that within 5-10 years, they'll dominate the SEC in all the major sports.

 

[DesotoCountyDawg]

The growth in the past ten years has been tremendous but I'm not sure the pace can be kept up to that standard which you pointed out.

 

[SkullCandy.sixpack]

Passing Bama and spitting distance of Georgia--both of whom have double our enrollment? The problem with the projections is a matter of starting position, and perspective. If a school started with $1 and ended up with $100, their growth rate would be astronomical, reflecting easy growth from a nominal starting position. It's unrealistic, in my opinion, to assume that a 12% annual growth rate can be maintained that long. At year 32, for example, we'd have a $4 1/2 billion dollar endowment--anyone really think that would grow 12%--about half a billion--in one year, when half a billion would be not quite double the total accumulated endowment we have now after decade? Half a billion in one year??

 

[Hump4Hoops]

I have to agree

The SEC west is going from tough to tougher. aTm is already a fantastic school in most sports, money sports or not. Add their money and new found exposure, they could be the new king.

 

[patdog]

They won't dominate. But the're going to be right up there with the top schools in the SEC in most sports, including the only one that really matters.

 

[RocketDawg]

Precisely.

 

[Maroon Eagle]

One thing I see that could be a cloud in this is that State has gotten a lot of money from the federal government for research. And there have been quite a few people as well as institutions calling for mass reductions of that type of funding. I just wonder what sort of plan MSU has in case federal funding is decreased drastically - or worse, runs dry.

 

[InaccuratePredictionsDawg]

I was wondering...

..how Vanderbilt is making tremendous strides in football & has been a consistently ranked baseball school over the last several years. They have the money to make it happen.

 

[esplanade91]

One thing I see that could be a cloud in this is that State has gotten a lot of money from the federal government for research. And there have been quite a few people as well as institutions calling for mass reductions of that type of funding. I just wonder what sort of plan MSU has in case federal funding is decreased drastically - or worse, runs dry.

Bingo. But I think MSU is safe for the immediate future. Obama has made it a priority to fund research in energy and infrastructure and MSU is known for both.

Even the GOP has made it a priority to dump money on public institutions with research facilities, and more so than wildlife, engineering gets a big nod.

The only way I see MSU not getting above average federal grants (not necessarily the levels we're getting now) is if America solves the energy crisis forever and fixes its failing bridges and logistics. I think we're safe in that catagory for the next 33 years.

In my 4 years here I've seen more and more and more PRIVATE giving each year. Pedigree and so on have increased giving. Hell, walk into McCool hall and check out the Taylor display.

 

[engie]

Federal research funding generally has to all be accounted for and spent yearly, lest we get a pay cut. That is doing minimal to help/hurt these numbers IMO. Our research funding relative to our peers also isn't as high as many seem to think.

SEC Federal Research Funding (x1000):

SECRnk	NtlRnk		2009	1990	20 yr growth
1	21	Vanderbilt	336,405	132,406	154.1%
2	35	Texas A&M	261,491	184,486	41.7%
3	42	Florida	232,737	128,175	81.6%
4	59	Kentucky	145,483	58,741	147.7%
5	69	Missouri	118,998	48,446	145.6%
6	75	South Carolina	107,504	40,838	163.2%
7	77	Georgia	106,932	87,013	22.9%
8	79	Mississippi State	102,903	42,503	142.1%
9	87	Tennessee	91,706	69,798	31.4%
10	91	LSU	86,546	46,468	86.2%
11	121	Auburn	52,911	29,020	82.3%
12	135	Ole Miss	38,836	16,336	137.7%
13	141	Arkansas	31,597	21,485	47.1%
Alabama not listed

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From here: http://mup.asu.edu/research2011.pdf

 

[Maroon Eagle]

Very good point when it comes to funding compared to other universities. Thank you for sharing the info.

Another concern is that MSU has been up there the past few years when it comes to specifically earmarked money granted to the university. And earmarks - as you know - have gotten negative attention.

It looks as if MSU is still highly dependent on federal funds though. While our numbers are not quite that high when compared to other institutions, our budget is also smaller which means federal funding plays a much larger role for MSU than it would for UGA and USC-- which like MSU do not have medical schools. In fact, I'm rather surprised to see Ole Miss rank that low in federal funding considering that they have administrative oversight over UMC. That makes me wonder if UMC is funded separately.

 

[engie]

In fact, I'm rather surprised to see Ole Miss rank that low in federal funding considering that they have administrative oversight over UMC. That makes me wonder if UMC is funded separately.

I'm pretty sure that UMC is funded separately. I believe I've seen their numbers listed before, but can't remember where.

 

[Crazy Cotton]

but those overhead funds and grant salaries means lower operating costs

I'm in the behavioral sciences, and my institution is going to take about half of my fed grant off the top as overhead - are engineering grants about the same? While that doesn't have a direct impact on the endowment, it does free up our money people to ask for endowment gifts rather than money for the operating fund - so it has a big net positive I think.

The other thing that is really promising about that 10 year growth - half of those years were in, for a lot of regions, a depression era economy - if MSU can grow endowment during that time - when a lot of schools saw their endowments cut in half when the stock market tanked (that's where a lot of that money is) and donors pull back big time, I am indeed impressed with states development people. I wonder if any of them are looking to move to Tennessee?


While our research funding may not be as high as some people think - I'm guessing MSU has about half the faculty as a lot of our SEC cohort - to be in the top half of grant receiving institutions in terms of dollars, and to be doing it with probably half the faculty as many of these guys, is pretty amazing.

 

[was21]

Texas A&M has a chance to take LSU place behind Alabama across the sports spectrum.

 

[engie]

I'm in the behavioral sciences, and my institution is going to take about half of my fed grant off the top as overhead - are engineering grants about the same? While that doesn't have a direct impact on the endowment, it does free up our money people to ask for endowment gifts rather than money for the operating fund - so it has a big net positive I think.

The other thing that is really promising about that 10 year growth - half of those years were in, for a lot of regions, a depression era economy - if MSU can grow endowment during that time - when a lot of schools saw their endowments cut in half when the stock market tanked (that's where a lot of that money is) and donors pull back big time, I am indeed impressed with states development people. I wonder if any of them are looking to move to Tennessee?

Excellent post and points.

Even in the "crash" years, MSU got hit much less hard than many around the country. Which is interesting, really, because given the yield we've gotten over the last decade, you would think we had more risk and volatility in the investments, and would have been hit harder by the recession.

My guess is that MSU has accumulated a lot of endowed assets in the form of land and natural resources -- which are both basically recession proof(talking actual products -- not speculating on futures), and have appreciated at a higher rate than other investments over the past decade(nevermind that you don't pay capital gains tax on appreciation of land until you sell it -- whereas you are taxed on the gains of invested monies yearly).

Here are the endowment percentages from the crash of 2009...

South Carolina	-7.90%
Mississippi State	-9.40%
Missouri	-14%
Vanderbilt	-18.90%
Florida	-19.20%
Auburn	-19.90%
Alabama	-20.20%
Ole Miss	-21.70%
Georgia	-23%
LSU	-23.10%
Kentucky	-23.30%
Texas A&M	-23.70%
Arkansas	-27.40%
Tennessee	not listed

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from here: http://www.nacubo.org/Documents/research/2009_NCSE_Public_Tables_Endowment_Market_Values.pdf

Like I say, our investments and the growth of our overall portfolio has been pretty consistently incredible over the past decade. Can it be continued? I don't pretend to know. But I'm just using all the data I have at my disposal to speculate that our future is a helluva lot brighter than our past...

 

[rabiddawg]

Remember that the "schools" side of UMC is administered under Institutes of Higher Learning and hospital side, where most of the large research grants go, is administered under State of MS. That's why OM ranks so low. They can really only claim funds earmarked for their main campus They can't claim that research money as their own. It belongs to University Hospital and Clinics. I worked there for nine years and even though my wife and I both worked there we were paid from two completely different entities. She was on the faculty side, which is IHL, and I was hospital side which is State of MS

 

[rabiddawg]

They also have the most affluent alumni base in the SEC. Has anyone ever met a struggling Vandy grad? Honestly speaking, Vandy is located in the nicest Town in the conference as far as campus location goes. If GaTech was still SEC they are the only school that could take that from Vandy. Tuscaloosa, not that nice. BR, ghetto, Columbia, SC and Knoxville? Ghetto. Don't really know about Columbia, MO. Gainesville? Definitely not that nice. College Station is on the upper scale of nice small college towns but all the rest in the SEC are just small college towns that don't offer everything. Nashville and surrounding areas are nice as hell.

 

[Maroon Eagle]

The money is why I likened them to Man City...

...in that EPL-SEC comparison last month.

Texas A&M has always had an Ivy League-level endowment, thanks to all the oilfields they own around the Bryan, TX area. I think that within 5-10 years, they'll dominate the SEC in all the major sports.

 

[bulldogbaja]

Mississippi's federal funding is tied very closely to one Thad Cochran. Let's hope he has a long career.