NAAA is a non-profit that has raised funds for various projects, often in partnership with the Naval Academy Alumni Assn, also a non-profit independent of USNA, a DOD entity.
Donated funds are often earmarked for specific projects, with the donors understanding that their funds are going to Project X. NAAA operating expenses are what is out of whack here. Revenues taken in from those $5 pretzels at the Stadium are not keeping up with outlays. Personnel overhead (salary and benefits) are usually one of the biggest costs of any for-profit or non-profit organization, and the first place cuts are made to control recurring costs.
As for club sports and broken gym gear, that is DON appropriated (taxpayer) funds, part of the Supe’s budget, completely separate from NAAA. I believe NAAA administers the club sports program for USNA. Appropriated funds flow from DOD to DON to the Fleet, including shore establishments. The first priority will ALWAYS be operating units. Shore commands and schoolhouses usually go hungrier than operational units. That AF money also comes in different flavors, such as maintenance/repair, acquisition, new construction, operating expenses (fuel, etc.), personnel, MWR. The money for those pots is generally not allowed to cross between pots. When times are lean in DOD, the MWR pot is one of the first to be skimmed. That’s also the pot that funds recreational services, athletic teams, gym gear and sports programs at every homeport. There are no doubt broken ellipticals at NAVSTA Norfolk.