Endowed academic chairs and professorships have helped universities attract and retain top-notch faculty for decades. That same principle is beginning to catch on in athletics departments as wealthy donors — often former student-athletes — begin to approach athletics departments with a desire to help sustain a program that was such an important part of their lives.

For some athletics departments, the transition to endowed coaching or administrative positions was a natural progression from endowed athletics scholarships, something many institutions have been doing for years.

Where the process could become problematic is if the donor demands "naming rights" that could be unacceptable to an institution. So far, most athletics department endowments are named in tribute to the donor or someone the benefactor wishes to honor, such as the Nichols Family Director of Athletics or the Joseph J. O’Donnell Head Baseball Coach, both at Harvard University.

However, academic chair endowments frequently come from corporate entities. Those same companies might someday be interested in having their name attached to athletics department endowments, creating the possibility of having a Car Company X Athletics Director, or the Head Football Coach brought to you by Soft Drink Y. Institutions will have to decide where to draw the line with commercial sponsorships of coaching positions so as not to run counter to the institution’s educational mission.

How the trend progressed

Creating endowments within athletics departments can happen in several ways. Some departments have been approached by former student-athletes indicating a desire to endow a coaching position while other schools actively sought alumni and other donors to endow positions in the athletics department.

Robert Zullo, an assistant professor at Mississippi State University who has followed the trend, called the search for people to give endowments "relationship marketing." Zullo is forming a research project about endowments in athletics departments.

He said that in his experience, donors are motivated by a variety of factors — loyalty to a school or a desire to honor a past player or coach. He called Stanford University the "grandfather" of the movement toward endowments in the athletics department. Stanford has a program in place to accept donations to endow coaching positions, scholarships and entire athletics programs. While no team is fully endowed to date, Stanford’s athletics Web site indicates a gift of $100,000 or more could establish an endowed fund named in honor of the donor.

The practice of endowing coaching and administrative (most often athletics director) positions can provide a real financial benefit for athletics departments by at least helping to pay a salary and benefits costs for an often high-profile and highly compensated coach, thereby freeing money for other uses, either in athletics or somewhere else within the institution.

Zullo cautioned that an endowment can not be regarded as a "sure thing" because the investments might falter. Zullo said the stock market was so bad one year when he was at the University of Georgia, the institution could not rely on its endowment income.

"But still, endowments make it a lot easier," he said.

Joe Sterrett, the Murray H. Goodman dean of athletics at Lehigh University, credits endowments with helping him to add full-time assistant coaching positions as well as ensuring competitive salary rates for other existing positions.

At Harvard University, endowments have been used to bolster an entire sport. Bob Scalise, Harvard’s athletics director, said an alumnus of the institution’s wrestling program has been generous.

"The person basically said, ‘I want to make sure that we always have the funds to have a wrestling coach. I don’t want money to be the reason we don’t have the wrestling program,’ " Scalise said.

Harvard does not offer athletics scholarships, and alumni interested in sustaining their sport don’t have that endowment opportunity open to them. The institution has a number of coaching positions endowed and actively pursues donors for endowing the remainder of its sports.

"Alums who really got a lot out of the sport want to make sure that they honor the coaches of the sport and want to make sure that the sport always has resources that can be used," Scalise said.

A connection to education

Honor is a key element for Lehigh athletics. The institution stresses the educational aspect of athletics, demonstrated by the renaming of the athletics director position to the "dean of athletics" at the time of the endowment, bringing the head of the athletics department in line with the nomenclature used in most academic departments.

Sterrett said the driving force behind the change was the recognition that participation in athletics is an important part of the entire educational experience.

"Sports are education, and those that are involved in the delivery of the sports experience truly are — or should be — educators," Sterrett said. "Accordingly, they should be held to the expectations of educators, evaluated as educators and treated as educators. In that sense, an endowed coaching chair is as reasonable as an endowed chair in an academic subject area."

Lehigh, like Harvard, has six endowed coaching positions. Scalise said Harvard’s donors have viewed their gifts as ways to honor their coaches, and that institution also ties the gift in to the educational experience offered by sports.

"There are people who say, ‘I learned an awful lot through my athletics participation and I want to make sure that we actually honor the people that spend so much time with us as athletes,’ " he said. "It’s a way to put a little bit more of an honor on the coaching position, and that’s what it is in academia as well."

Pursuing endowments for coaching and administrative positions is becoming more popular. Purdue University incorporated the tactic into the athletics department’s strategic plan developed several years ago. The athletics department has found donors to endow scholarships and is actively seeking to establish endowments for salaried positions.

Some institutions already have begun to take a stand with the corporate piece. Scalise said Harvard is not interested in allowing commercial entities to endow coaching chairs.

"We would not want a Nike position, for example. We’re so conservative that we don’t have that problem," Scalise said. "I think that some schools might, say, be interested in the adidas track coach."

Managing commercial risk

Greg Christopher, former Purdue associate athletics director, said that while the idea might sound unappealing on the surface, he believes any company interested in endowing an athletics coaching position would likely be doing so for purely philanthropic reasons because the return on the investment would be so small, especially when compared to what the same amount of money invested elsewhere could accomplish.

"I guarantee that the return in exposure that a FedEx or a Verizon would get for endowing the AD position is not the same return they could get buying television time or billboards with that same money," Christopher said. "The companies that have done it on the academic side, there is a little bit of exposure tied to it, but I think it’s more philanthropic in nature when they do something like that."

Zullo agreed that any corporate endowments would be more of a "goodwill gesture than a sponsorship." He questioned whether companies would be interested in such a practice because the exposure would be so low.

Administrators might encounter other pitfalls as well, Scalise warned, such as potential conflicts of interest, including the parents of a current student-athlete expressing an interest in endowing a position. That is something Harvard would not allow, he said.

Institutions also must consider the amount of the gift. A $1 million gift yielding 5 percent annually will provide only $50,000 annually.

Christopher said Purdue frames endowments as an appropriate vehicle for deferred gifts or will provisions. Because the institution is paying for the coach’s or administrator’s salary now, the department does not need the money immediately.

Several administrators also warned that any endowment contract offer contingencies in the event that a sport is no longer viable for the institution.

Christopher at Purdue said that crafting the language of an endowment, even of an athletics scholarship, can be tricky because of the number of unknowns involved.

"You don’t know how the landscape is going to change 50 or 100 years from now from a sports standpoint," he said. "The number of sports you have and the distribution over sports is usually pretty consistent, but any time you do have endowment money, you have to craft the language of the endowment very carefully so that it doesn’t tie the hands of the university 100, 200, 300 years from now. You do have to think in those terms."

Scalise explained that at Harvard, if for some reason an endowment can not be continued for its originally intended purpose, the money can be used to "ensure the continuing athletics education of the students at Harvard."

Whether athletics department position endowments will proliferate as much as they have in academe is unclear. Zullo said the strain on athletics department budgets already has led athletics directors into finding new revenue streams.

"In addition to corporate naming rights and trying to find more sponsorships and more major gifts, endowments are definitely going to become a foundation, an expectation of athletics directors. For future athletics directors, anybody that’s not doing an endowment program is going to be left behind."

Christopher said he thinks the practice will begin to grow in popularity once some institutions begin to have high-profile successes.

"You’ll see others be quick to follow," he said. "The idea is right and the academic side of campus has been able to do this by endowing professors and other academic positions. The analogy works. I also think the timing is right. You are seeing an increased emphasis on deferred gifts at academic institutions. This may be the right time to focus on it."