In a year of significant -- and in some cases, controversial -- proposals for reform in Division III, there doesn't appear to be much debate surrounding a measure that would require some institutions to stop providing financial aid for student-athletes from athletics endowments.

But judging from telephone calls to the NCAA national office, a significant portion of the Division III membership may not be sure it fully understands the proposal's intent -- or its potential impact. And judging from some reporting about the proposal in newspapers and discussion in Division III fan sites on the Internet, there may be an erroneous impression that it reaches beyond financial aid to halt all donations for athletics.

The only thing the proposal actually seeks to accomplish is to end an exception to Division III financial aid legislation that was adopted more than two decades ago.

Bylaw 15.01.5 specifies that no part of an institution's financial aid budget can be earmarked for athletics in general, or specific sports. However, as a result of a proposal adopted at the 1981 Convention, institutions where endowments were established before 1979 have been permitted to use income from those funds to provide financial aid to student-athletes -- so long as the overall financial-aid package is awarded under the same criteria used in awarding financial aid to all students.

In other words, money produced from such endowments can replace funds that otherwise would be drawn from sources unrelated to athletics -- provided that the overall amount of financial aid the student-athlete qualifies for is awarded without regard to athletics ability.

That exception would end if Division III members approve the proposal recommended by the Joint Subcommittee on the Future of Division III's financial aid subgroup, and sponsored by the Division III Presidents Council as part of its reform package for the 2004 Convention.

"This is really part of the larger agenda for reform in Division III intercollegiate sports," said John Roush, president of Centre College and a member of the Presidents Council who served on the financial aid subgroup.

"If we are going to be a need-driven athletics experience in Division III, then this would be a logical time to try to clean up some of the things that have been exceptions over so many years," he said. "I see it as part of a larger reform agenda where different subcommittees have found themselves asking the question, 'Should we continue to do this -- we know we've been doing it, but is that a justification to continue doing it?' And I think we've concluded here that it is not."

"The committee was thinking that we need to get everything out on the table related to financial aid legislation," said Karen Johnson, director of institutional research at Alfred University and a member of the Division III Management Council who chaired the financial aid subgroup.

"It falls into the philosophy behind the entire reform package. The Division III philosophy is that we do not award athletics aid to student-athletes. By keeping this endowment in place, there are possibly some student-athletes who are benefiting from this. This (proposal) would level the playing field."

Birth of an exception

As is often true with exceptions in NCAA legislation, the provision permitting institutions to draw financial aid from athletics endowments was born in controversy.

In this case, it was the debate over 1979 Convention Proposal No. 57. That landmark Division III measure sought to ensure that financial aid awarded to student-athletes is packaged in the "same manner and proportions" -- as Kenneth J. Weller, then president of Central College (Iowa), put it -- as aid granted to all students demonstrating need.

Among its provisions was the wording that currently is found in Bylaw 15.01.5, prohibiting designation of any part of an institutional financial aid budget for athletics. Realizing the proposal would prohibit existing athletics endowments as a source of financial aid, delegates to the 1979 Convention discussed at length the pros and cons of exempting such funds from the legislation, then defeated an amendment-to-amendment offered by Pomona-Pitzer Colleges -- with the blessing of the Division III Steering Committee -- to allow the exemption.

The new financial aid legislation was challenged just a year later, at the 1980 Convention. The University of Rochester's David Ocorr, writing in The NCAA News in favor of scrapping the legislation, primarily focused on what he said was unjustified limitation of institutions' autonomy by preventing recognition of students' athletics skills in the same manner as students "who have special talents in other areas." But Ocorr also addressed the prohibition of financial aid from endowments.

"Some of our alumni and donors will not support athletics unless funds are earmarked," he wrote. "Otherwise, such funds have a way of sinking to the bottom of the well, only to surface in support of other college needs."

The effort to overturn Proposal No. 57 failed, confirming the Division III approach to financial aid that essentially remains intact today. But the concern about athletics endowments lingered, and the Division III membership finally resolved that issue by approving the current exception at the 1981 Convention and "grandfathering" funds established before 1979. Speaking on the floor at that Convention, Ocorr credited the Division III Steering Committee with "reacting to exceptional situations that many private universities and colleges in Division III find themselves."

'Under the radar'

Considering the fairly extensive debate about endowments 23 years ago, some are surprised that the current proposal is generating relatively little discussion.

"I'm surprised that this has gone under the radar," Johnson admits.

But even the person who holds the same job that Ocorr held in 1981 -- George VanderZwaag, director of athletics at Rochester -- anticipates very little impact from the proposal.

"It's hard for me to imagine that it's hugely controversial, given the way we use that money under current legislation. Nothing really changes for us," VanderZwaag said. "The programs that this money supports still will exist; there will just be a small adjustment to the financial aid package."

Johnson and VanderZwaag both say there has been only minimal discussion of the proposal at recent conference meetings.

"In my own conference, everyone just wanted to know numbers -- who does this effect?" said Johnson, whose school is a member of the Empire 8 Athletic Conference. "I think that if they felt it affected a significant portion of the membership, then maybe they wouldn't support it. But I'm not hearing that from anyone."

That question of who is affected is difficult, if not impossible to answer. In fact, the financial aid subgroup and the NCAA staff have been unable to determine how many Division III members might be affected by the proposal.

There still is a scholarship endowment at Rochester -- a member of the University Athletic Association -- that was established before 1979. VanderZwaag said that endowment was worth about $25,000 when the 1981 exception was adopted.

VanderZwaag said adoption of the proposal would have no significant impact on Rochester athletics programs or providing financial aid for students. "It only becomes a little uncomfortable in terms of what we now do with those endowed funds," he said.

As president of a private liberal arts college and as a former administrator with development responsibilities at the University of Richmond, Roush understands that the proposal will create similar discomfort at other institutions where endowments may have been established specifically for the purpose of providing scholarship support to student-athletes. But he believes that institutions will be able to work with donors in most cases to revise terms of the original gift.

"If the donor is alive, you can go to him or her with some language that still would allow the spirit of what the person wanted to accomplish, to support football, women's basketball, whatever...but there has to be some adjustment in the terms of how the endowment is executed so you're not in violation of NCAA rules and regulations. Most of the time -- I'm not exaggerating -- nine times out of 10 it works out."

"I assume I can work through this," VanderZwaag said. "The family that established (the endowment) is still around, and we're going to have to sit down and figure this out now. All of our efforts now go toward raising money for program support, so I think we're well-equipped to begin that discussion."

"Part of what makes (the proposal) palatable for folks is that it has a delayed effective date," Johnson said. "So, if there are any kids in the pipeline who are receiving the benefit of these funds right now, they will not be impacted."

Indeed, the proposal carries an effective date of 2008 primarily to ensure that student-athletes who currently are receiving funds from such endowments will not be adversely affected by the legislation. But Roush believes that delayed date also should give institutions adequate time to achieve modifications in the terms of an endowment with the donor or heirs.

"2008 allows plenty of time for people to take care of this business, if it can be taken care of," he said.

But, Roush concedes, there may be instances -- that 10th time out of 10 cases -- where there is a problem that can't be resolved.

"One is where a gift has been given and the donor's no longer living, and he or she may not have any heirs that could be consulted, either.

"The other problem is, when you have what could be a really rabid donor who knew exactly what he or she wanted to do with the gift, and created an endowment for the express purpose of being able to recruit a young person to college as a goalie in soccer or a quarterback in football, and by God they want it to be based on athletic merit. They don't care that the NCAA is going through reform in Division III. And those are the toughies.

"You hate to throw cold water on a hot flame from someone who really wants to be supportive of the institution, by having to say to him or her, 'We just can't do that.' I wouldn't wish that on any of my fellow presidents, and that's not a happy thing to have to do."

How far does it reach?

This athletics endowment proposal may not be very controversial, but it arguably is generating more confusion than other proposals in the Future of Division III package.

There have been questions about whether the proposal reaches beyond financial aid, to limit use of endowments for athletics facilities, equipment or other uses that may "benefit" student-athletes in some way other than providing financial aid. Members of the Presidents Council expressed concern at their August meeting that there may be confusion in the membership about the proposal's intent.

The confusion extends to media and the public. At least one newspaper has suggested the proposal means, "in other words, no Big Donor Convention Center or Fat Cat Stadium." That particular article, in turn, prompted a fan on a Division III football Web-based discussion group to ask: "Why in the world would the NCAA want to stop people from donating money to schools?"

Johnson said the proposal's only intent is to address the financial aid issue, and in no way is intended to impact donor support for athletics programs. "It was strictly financial aid," she said. "That was all we were looking at."

Roush agreed, adding that if the intent were to halt donations to athletics programs, "I would fight against that."

"For a donor to say, 'I want to put up a new backstop for the baseball field and I want to give money for that express purpose' -- for us to spend any time and energy to somehow consider that that's not right, or fair, or creates an uneven playing field, or puts other colleges at a competitive disadvantage, well...there are lots of things at colleges that are donor-driven, and that doesn't make them wrong or inappropriate.

"When good things happen at other places, I might wish they'd happen at Centre, but I don't begrudge the fact that it happened there. And I feel the same way about people who would want to give specifically for athletics, in ways that clearly relieve the budget or provide some kind of enhancement -- that's not structurally creating a competitive advantage."

But a decisive point in seeking elimination of financial aid from athletics endowments is that the option currently is available only to a limited number of Division III institutions -- those that had such endowments before 1979. The Division III membership has grown dramatically since then.

"We have judged that the financial aid issue is a competitive advantage that some Division III institutions could, but should not be allowed to exercise," Roush said.

And while the proposal, like most in the Future of Division III package, is rooted in division philosophy, Roush said competitive equity also is an important consideration.

"I think it's both (philosophy and equity), and I think most honest people would own up to that," he said. "It is a philosophy that we're not supposed to be giving aid that is athletically driven, but the reality is there are some places that are doing this or might do more of it than we would like, and over time that could put them at a competitive advantage. The whole idea is to kind of level things up."