UGA has $77 million in reserves even as fundraising continues
ATHENS – When Georgia finally built its long-awaited indoor facility, it asked for donations from fans. They came through with more than $24 million of the $30.2 million price tag. And when the school announced plans for a $63 million renovation of Sanford Stadium last month, it did so asking for $53 million of that to be fundraised.
Through it all, Georgia has remained committed to not touching its substantial reserve fund, which DawgNation has discovered includes an additional $32 million that is invested through the school’s foundation.
All the while, however, Georgia is pledging not to dip much into its reserve fund. That fund includes more than $32 million that is invested with the school’s foundation, and not highly publicized.
The money is not secret, necessarily. It is included in a footnote in the audited financial statement, a copy of which was obtained by DawgNation. But that $32 million – set aside for “general support” of athletics – is not included in the figures presented in the treasurer’s report, handed out last month at the UGA athletic board meeting.
So in total, UGA has more than $77 million available, that is not specifically allocated for other projects or expenditures. But the athletic department wants to save those reserves, especially the $32 million, in case of emergencies.
“It’s like anything else in life,” athletics director Greg McGarity said Thursday. “There could be a curveball in your personal life, and my life, that we did not anticipate. So (that’s) the one thing that we don’t have to worry about. It’s just solid business practice. It’s probably the best way to say it. It’s the unexpected.”
But Georgia football and the SEC continue to bring in massive revenues. The SEC last year paid out $39 million to Georgia.
So what is Georgia worried about needing the money for?
“It’s a good practice to have at least six months of operating expenses in case the unforeseen happens, that we don’t know about,” McGarity said. “That’s the financial strength that our athletic board mandated, long before I arrived. So it’s a philosophy that’s been in place for decades. Thank the lord.”
That includes the $32 million that is invested with the University of Georgia Foundation, the school’s fundraising organization. According to the footnote in the UGA athletic association’s financial statement, the $32 million (approximately) “has been established for general support of athletic programs and awards.” McGarity and Stephanie Ransom, an associate athletics director, confirmed that it is separate money from the $67 million in reserve money listed in a booklet provided at the board meeting. (There is $21.6 million of that already allocated for other facility projects this year.)
Asked when that $32 million would be dipped into, McGarity answered “never.”
“That all gets into the rainy day (fund),” he said.
McGarity pointed to unforeseen expenses that have already occurred: Paying off previous head coach Mark Richt and his staff. That amounted to about $7 million. As for the future, there are still NCAA lawsuits in the system, McGarity pointed out, related to student-athlete pay and concussions. He also pointed to the NCAA in the last couple years allowing schools to pay athletes for cost-of-attendance and for increased meals.
“There are a lot of assumptions that people are making, that this revenue stream is going to be there forever,” McGarity said. “If we end up having to pay student-athletes down the road, where is that money going to come from? … There are a lot of unknowns, and what this allows us to do, and the right way, is to have a buffer there that allows us to cover the unexpected.”
So that’s why UGA is seeking to fundraise for the Sanford Stadium west end zone project, which will build the football team new locker rooms as well as a recruiting area. The generous fan response to the long-awaited indoor facility gave the school confidence it could fundraise that $53 million for the stadium. Athletics has pledged the other $10 million.
When it comes to other projects, McGarity pointed out, they have paid out of the athletic association’s own operating expenses, or the reserve fund. There is $21.6 million worth of projects previously approved for 2017, including $7.1 million to Stegeman Coliseum, and $2.85 million to the golf center. Those projects are largely paid for out of reserves.
“It’s remarkable how much we have spent, without taking on debt,” McGarity said. “I know everybody thinks we’re not using it. But the record will clearly show that that money is being spent in projects that we would call improvement projects that aren’t conducive to donor (involvement). Not should they be. It’s kind of hard to get a donor to pay for a resurfacing of a track. Or a donor to pay for a new scoreboard. Or a donor to pay for new seats in the building. That’s why we have our reserve, to take care of things that we need to take care of. Like the restrooms (at Sanford Stadium.)”
McGarity also said that with all the ongoing projects – especially the indoor facility and the west end zone project – the bills are “coming fast and furious” while pledges from fans are still turning into actual cash being received. So reserve funds have to be ready for that too.
“Those are things that you can’t predict. But you know that it’s part of the business,” he said. “So you’ve got to be prepared.”