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Raising Cane Rob Perez |
Saint Louis field comes
at expense of student aidA private education foundation that exists largely to provide scholarships for Saint Louis School students spent nearly $1 million several years ago to pay for a new athletic field on campus, a move that seems questionable now that the financially strapped organization is dramatically cutting the amount of aid it gives.
The main reason for the aid cutbacks, according to the St. Louis Education Foundation, is the hammering its investments have taken in a tanking stock market. But spending $938,980 to upgrade Saint Louis' practice field, which got a state-of-the-art artificial surface in 2000, has exacerbated the organization's financial woes and has some donors privately criticizing the foundation's priorities.
They question why the education entity spent so much money -- roughly 10 percent to 20 percent of its net assets, depending on what year is used as the gauge -- on something so far afield of its main mission of providing scholarships.
Getting a new practice field was a major priority for Cal Lee, the private Catholic school's influential athletic director and former football coach who transformed the Crusaders into an unrivaled gridiron powerhouse.
The old grass-and-dirt field, the foundation was told, was too hard and hazardous for players and students to continue using.
Yet why did the relatively small foundation so willingly take the snap on this project, given its limited resources and its primary focus of helping pay for students' education?
What the foundation spent on the field was roughly three times what it gave in financial aid to around 360 students last fiscal year, according to the group's most recent tax return.
Worse, the foundation in that same year changed the $938,980 field expenditure on its books from a loan to a contribution (essentially a gift to the school), further eroding the foundation's asset base. The group ended that 12-month period through June 2002 with a deficit of nearly $690,000; its net assets plummeted 33 percent to about $4.4 million.
At the same time, its financial aid for that year totaled roughly $290,000, about half what it was in 2000, according to the foundation's tax returns. That aid is expected to drop substantially again in the coming school year, meaning fewer students likely will be getting foundation help. For some students, that help is the only way they can afford to attend Saint Louis, which is raising its high school tuition to $7,800 in the coming year.
Tony Guerrero, the foundation's president, said the organization's mission is broader than just financial-aid funding, although he acknowledged that providing such aid is its primary purpose.
When the school asked for the field loan, the foundation was able to accommodate that request as well as provide all the money Saint Louis sought for financial aid that year, Guerrero said. "They put in a request, we grant it -- if we have it," he said.
The foundation's initial commitment on the field loan was made before the stock market began its three-year dive in early 2000, a dive that has cost the foundation -- and most other investors -- dearly.
The field project was not the first time the foundation has provided funding for school construction projects. It previously paid about $2 million for classroom renovations and also gave money for installation of wiring for campus computers, Guerrero said.
But if the foundation got a request today to fund a practice field, it would react much differently because of the current financial situation, he added. "To put it in today's context, that's a much different story ... If the school would ask today for a football field, definitely the answer would not be yes."
Guerrero said conversion of the field loan to a contribution was basically an accounting change because the foundation wasn't expecting to be repaid anyway.
Asked whether the foundation would have had more money for scholarships had it not funded the football field, Guerrero said that wasn't necessarily the case. If the foundation had invested that money in now-bankrupt Enron Corp., for instance, the money would be gone, he said.
The foundation's invested funds are held and managed by First Hawaiian Bank, where Guerrero is a senior executive.
The bear market of the past three years has meant that the foundation has less investment income to fund scholarships. Like most foundations, it doesn't tap its corpus, or the principal amount initially invested.
Guerrero said the foundation expects to give more than $100,000 and possibly as much as $175,000 in financial aid in the coming school year, down from about $254,000 this year.
The continued decline in aid comes as the demand for help has been on the rise. Guerrero said 52 percent of Saint Louis students receive aid, up from 34 percent in recent years.
In addition to the foundation, a variety of other sources, such as the school itself, the alumni association and individual donors, provide financial aid.
While the funding of the athletic field is bound to bolster criticism that Saint Louis puts too much emphasis on its football program at the expense of academics, Guerrero bristled at the notion. "We are not a football factory," he said.
The field gets good use by the school. Among the users: students in physical education classes, the soccer team and, of course, the football team.
One notable non-school user: the Hawaiian Islanders, a professional arena football team coached by Lee, the Saint Louis athletic director.
While several donors I talked to were upset that foundation money was used for the athletic field instead of scholarships, no one was willing to voice their criticisms on the record. They said they were fearful of repercussions if they publicly challenged the decision of the foundation's high-powered, influential board of directors.
So I'll voice what they told me: What in the name of academia were you directors thinking when you made that cockamamie decision?
Needy students are now paying for it.
See the Columnists section for some past articles.
Star-Bulletin columnist Rob Perez writes on issues
and events affecting Hawaii. Fax 529-4750, or write to
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu 96813. He can also be reached
by e-mail at: rperez@starbulletin.com.