It's a “Way of Life.” Behind a Big Gift for College Athletics

The H.D. Smith Foundation recently gave $20 million to the University of Illinois Foundation. A majority of the gift—$15 million—is dedicated to the new Fighting Illini Football Performance Center. The center will feature new locker rooms, sports medicine space, coaches’ offices and more.

The gift will also create scholarship opportunities with $3 million for former student-athletes to return to campus for degree completion, and allocates $2 million toward the Illinois Carle College of Medicine for innovation at the intersection of medicine, engineering and athletics.

The gift suggests that at a time when a growing body of evidence frames college football as a money-losing proposition, not to mention a threat to brain health, a segment of donors nonetheless remain bullish on the sport.

The foundation’s largesse echoes billionaire David Booth’s $50 million gift to allow the University of Kansas to begin construction of a much-needed indoor football practice facility. “I'm familiar with the argument as to why you might not want to have a serious athletic program,” Booth said at the time. “I get the arguments. I don’t agree with them. I’m on the other side.”

As is the H.D. Smith Foundation. I’ll take a closer look into why donors continue to embrace college football in a moment. But first, let’s turn to the foundation itself.

A Textbook Higher Ed Mega-Gift

The Smith family founded H.D. Smith in 1954, which has since become a national medical wholesaler, providing services and solutions for health-care providers.

AmerisourceBergen, based in Valley Forge, Pennsylvania, acquired the Springfield, Illinois-based H.D. Smith earlier this year. AmerisourceBergen’s $815 million deal to take over the Springfield company closed in early January.

The foundation is run by Chris and Dale Smith, sons of founders Henry Dale and Betty Smith.

Aside from the foundation’s gift to the University of Illinois, I was unable to uncover any other gifts of comparable or lesser magnitude (although it may not be a coincidence that the largest gift in the history of college athletics came a few months after the company was purchased for close to $1 billion).

That said, with a few exceptions, mega-gifts of this nature usually materialize after some foreshadowing, and the foundation’s gift here fits the bill.

Chris graduated from the University of Illinois with a bachelor’s degree in business administration in 1979. He and Dale have been loyal supporters of the school’s athletic fundraising program, I FUND, and are season ticket holders for both football and men’s basketball.

“Working with the Smiths for more than a decade has been so very impactful,” Senior Associate Athletics Director Howard Milton said.

Intangible Benefits

In a philanthropic climate in which donors aim to drive maximal impact, the inherent value of a gift earmarked toward a football performance center is dicey at best.

College football, of course, is big business, but research suggests that universities attempting to make the leap into the upper echelons rarely reap the purported benefits of financial viability, increased attendance, or national acclaim.

Nor is it an encouraging sign that the NCAA reported that attendance at games played by Division I-A teams dropped by three percent in 2017—college football’s largest per-game attendance drop in 34 years, and the second-largest decrease ever. The case against trying to build big-time college football program is compelling, yet donors keep the gifts flowing. Why?

There are many answers, but one important dynamic undergirding this entire thought exercise is the fact that mega-donors aren’t as beholden to the “ROI mindset” as one would suspect. A 2017 study by the Philanthropy Workshop on high-net-worth donors, titled “Going Beyond Giving,” found that major individual donors aren’t actually obsessed with metrics or evaluation, despite the stereotype that they tend to be hard-nosed MBA types.

David Booth certainly qualifies as a hard-nosed MBA type. With a net worth of roughly $2 billion, he is the chairman and CEP of Dimensional Fund Advisors. He received his MBA from the University of Chicago.

In justifying his gift to the University of Kansas, Booth said, “This is a long-term thing. It’s like the stock market... You play for the long haul.”

But Booth also embraced a more convincing line of thinking while sounding less like a financier and more like a character from a Norman Rockwell painting.

Booth's first exposure to Kansas football came when, as a Boy Scout, he served as an usher at games. “I quit the Boy Scouts, and then I was over at the fieldhouse selling popcorn," he said. “I was one of those kids who was very irritating to people, walking around with a bunch of popcorn—‘Sit down, kid!’”

Booth also pointed to another intangible aspect of a successful college football program: “It’s a way for the alums to stay connected to the university.”

Similarly, here’s what the H.D. Foundation’s Dale Smith said about its gift to the University of Illinois:

We are incredibly excited to be able to honor our parents’ legacy in this way. Athletics, and in particular Illinois sports, were a big part of their way of life. They loved Central Illinois, their home for more than 60 years, and my mother is thrilled their support will help to build pride in this region through continued University success.

Both donors were drawn to the less-tangible benefits of college athletics and how football, in particular, cultivates a sense of pride, legacy stewardship, community, and shared history. But that still doesn’t tell the whole story.

Tangible Benefits

The New York Times recently published a piece by Albert Samah titled “The Kids Who Still Need Football.”

Samah argues that despite the sport’s physical toll, many poor and disadvantaged families and players have decided it’s a risk worth taking because it provides a pathway to a college athletic scholarship. Here’s the money quote:

The truth is, while some will decide the game’s risks aren’t worth it, others—mostly lower-income black and brown kids—continue to depend on it as a chance to climb the educational and economic ladder. Yes, football is dangerous, but so is leaving one’s future in the hands of an unequal educational system. It’s no wonder the sport still feels like a winning ticket.

There’s nothing “intangible” about poor athletes getting a college education. I imagine this line of reasoning resonates with a large segment of the donor population.

Which brings me to a related element of the H.D. Foundation’s gift. As noted, the gift will create scholarship opportunities with $3 million for former student-athletes to return to campus for degree completion. This is an important component, since most college football players won’t end up making millions in the NFL.

Just how bad are the odds? According to the NCAA, 1.6 percent of Division I men's football players go on to play professionally after graduation.

The H.D. Foundation is taking an interest in seeing that players complete their degrees and are well-equipped for a life after college athletics, and they’re not alone. Earlier this year, University System of Maryland Regent Barry Gossett and his wife Mary made a $21.25 million gift to create the Barry and Mary Gossett Center for Academic and Personal Excellence at the school to boost the academic success of student-athletes.

Tough Times

The foundation's $20 million gift comes at a precarious time for the University of Illinois system. A September 2017 piece by Dawn Rhodes in the Chicago Tribune found that enrollment at many of the state's public universities dropped that year, particularly among new freshmen wrestling with where to commit for their college educations. University leaders cited budget battles as a critical factor in both the declines and the fact that the University of Illinois at Urbana-Champaign dropped from 44 to 52 in U.S. News & World Report's highly influential university rankings.

Given the gravity of these challenges, one could argue that $20 million for a college football program might best be spent elsewhere. Then again, thanks to the power of private dollars, perhaps that line of thinking doesn’t carry as much weight as one would initially suspect.

Maybe there’s enough money to go around.

The H.D. Foundation’s $20 million gift counts toward the $300 million fundraising goal for the Division of Intercollegiate Athletics, which is part of “With Illinois,” the recently announced $2.25 billion university-wide fundraising campaign.

That’s a whole lot of money for a state school system, and administrators intend to put it to good use.

In an effort to stem the tide of students leaving the state, in late August, the University of Illinois at Urbana-Champaign announced it will provide free tuition and campus fees for in-state students whose family income is less than $61,000 a year. According to Chancellor Robert J. Jones, the university has the revenue to offer free tuition for at least four years.

The university hopes the second wave of financing will come from philanthropy.