Coaching endowments

I noticed that at some point since the end of last season Doug Derraugh became the Everett Family Head Coach of Women's Hockey. Are those endowments supposed to cover a portion or all of the coach's salary, or does it vary from endowment to endowment? Mike Schafer's position has been endowed for some time now, I believe.

Weder
I noticed that at some point since the end of last season Doug Derraugh became the Everett Family Head Coach of Women's Hockey. Are those endowments supposed to cover a portion or all of the coach's salary, or does it vary from endowment to endowment? Mike Schafer's position has been endowed for some time now, I believe.

It tends to vary from endowment to endowment, but the general aim is for a new named coaching or faculty endowment to cover at least the full salary, if not the salary and benefits, plus some of the person's budget. To endow an existing professorship at Cornell is typically $3 million, and a new professorship $5 million, these days - if I understand correctly, the minimum to endow a coaching position is $1 million, and I don't know for certain whether that would apply to a head coaching position.

Beeeej

Weder
I noticed that at some point since the end of last season Doug Derraugh became the Everett Family Head Coach of Women's Hockey. Are those endowments supposed to cover a portion or all of the coach's salary, or does it vary from endowment to endowment? Mike Schafer's position has been endowed for some time now, I believe.

It tends to vary from endowment to endowment, but the general aim is for a new named coaching or faculty endowment to cover at least the full salary, if not the salary and benefits, plus some of the person's budget. To endow an existing professorship at Cornell is typically $3 million, and a new professorship $5 million, these days - if I understand correctly, the minimum to endow a coaching position is $1 million, and I don't know for certain whether that would apply to a head coaching position.

Thanks. If they follow standard drawdown rates, it sure seems like you'd want to start with at least $3 million for a coach.

Wow. It is hard to believe that the Everett family has enough women hockey players to require a head coach.

(Yes, this is sarcastic quasi-rant against the awkwardness of auctioning off titles and the literal implications.)

If the person giving the coaching endowment includes "so long as the sport exists," otherwise it goes to Animal Rescue not the Cornell Fund, that's an incentive for Cornell not to want to shut down the sport in the future.

What is the long-term expectation for return on endowment money invested by Cornell, 5%? (We are not the Ivy leader on investment returns.) So you'd need $3 million to return $150,000, about what would cover the coach's salary and maybe some benefits.

My pet peeve is when the endowment is in the name of both spouses, maybe one of the children, and they don't have short names:
The Lurleen Matthews Wilkinson-Sword and Jeffrey Toobin Sword Family Endowed Chair takes most of the first graf of the press release. That's even wore than fitting "Glockner-Zeller" (name? sp?) on that Princeton hockey jersey of a decade ago.

billhoward
What is the long-term expectation for return on endowment money invested by Cornell, 5%?

In 2008 it was something like -20%.

i doubt 150K is getting it done for most of these coaches after you add in fringe stuff. thats like 50% over salary in some cases

I do not know what is required to endow a head coach. I do know in general how Cornell Endowments work. The gift buys shares in the Cornell University Long Term Investment pool. Over time the value of shares goes up like a mutual fund partially from growth in value and partially from reinvestment. The Trustees decide the reinvestment and pay out each year. In a recessions the pay out may go down. Generally the payout goes up or at least stays the same. For 2020 the payout was about 4.4% of the market value of the shares.

Rockey
I do not know what is required to endow a head coach. I do know in general how Cornell Endowments work. The gift buys shares in the Cornell University Long Term Investment pool. Over time the value of shares goes up like a mutual fund partially from growth in value and partially from reinvestment. The Trustees decide the reinvestment and pay out each year. In a recessions the pay out may go down. Generally the payout goes up or at least stays the same. For 2020 the payout was about 4.4% of the market value of the shares.

In 2020, the Wilshire 5000 (broad echo of the stock market) was up 21%. Perhaps Cornell has a higher administrative overhead than, say, Charles Schwab. If Cornell rolled the dice, put $3.5 billion (half the endowment) on TSLA in January, that half would be worth $28 billion, plus the half held in reserve would probably be up to $5 billion.

That would be enough money to finally settle the campus store another 10 feet down into bedrock. The original intention was no one would notice the campus store, a grassy slope except for a couple skylights.

billhoward
If Cornell rolled the dice, put $3.5 billion (half the endowment) on TSLA in January, that half would be worth $28 billion

So, what, half Harvard's endowment?

billhoward

Rockey
I do not know what is required to endow a head coach. I do know in general how Cornell Endowments work. The gift buys shares in the Cornell University Long Term Investment pool. Over time the value of shares goes up like a mutual fund partially from growth in value and partially from reinvestment. The Trustees decide the reinvestment and pay out each year. In a recessions the pay out may go down. Generally the payout goes up or at least stays the same. For 2020 the payout was about 4.4% of the market value of the shares.

In 2020, the Wilshire 5000 (broad echo of the stock market) was up 21%. Perhaps Cornell has a higher administrative overhead than, say, Charles Schwab. If Cornell rolled the dice, put $3.5 billion (half the endowment) on TSLA in January, that half would be worth $28 billion, plus the half held in reserve would probably be up to $5 billion.

That would be enough money to finally settle the campus store another 10 feet down into bedrock. The original intention was no one would notice the campus store, a grassy slope except for a couple skylights.

The payout percentage is different than the actual returns on endowment. So even if Cornell earned 20%, I don't find The 4% surprising. The Delta helps to grow the endowment, remember that you need to grow the fund to cover for inflation. Also, it provides a cushion so that payouts continue at a similar rate even in future years with low or negative returns on the fund.

Exactly right. No big pay outs and if at all possible no big decline in pay outs. In many decades of getting endowment income to manage I only recall one year where it went down and it bounced back the next year. Cornell is playing the long game. I had one endowment with the principle amount of $50 created in the late 19th century that was paying out much more than $50 per year in the 21st century.

Rockey
Exactly right. No big pay outs and if at all possible no big decline in pay outs. In many decades of getting endowment income to manage I only recall one year where it went down and it bounced back the next year. Cornell is playing the long game. I had one endowment with the principle amount of $50 created in the late 19th century that was paying out much more than $50 per year in the 21st century.

What was the $50 endowment for?

abmarks

Rockey
Exactly right. No big pay outs and if at all possible no big decline in pay outs. In many decades of getting endowment income to manage I only recall one year where it went down and it bounced back the next year. Cornell is playing the long game. I had one endowment with the principle amount of $50 created in the late 19th century that was paying out much more than $50 per year in the 21st century.

What was the $50 endowment for?

Pulleys for Mechanical Engineering ?

The athletics department posted a story about the endowment.

Really nice article -- Thank you for posting the link.

So this thread isn't about "lil Mike"?

Trotsky

billhoward
If Cornell rolled the dice, put $3.5 billion (half the endowment) on TSLA in January, that half would be worth $28 billion

So, what, half Harvard's endowment?

Harvard endowment is $42B, maybe forty-three if they got in and out of Gamestock at the right time, Yale is $30B, Stanford is $28B, Princeton is $26B. Princeton is the wealthiest school if you measure the endowment per student, with about $3 million in the bank for each of its ~9,000 students.