III. Building Blocks and Positioning
The precipitous decline in traditional revenue sources and rising pressure to moderate tuition growth have increased the need for fundraising on most campuses, public and private. In addition to its traditional role of providing support for students and faculty, philanthropy has become an increasingly important source of strategic investment in new initiatives and facilities. Boards tend to prioritize fundraising ability when selecting and evaluating presidents, yet many new presidents begin their tenure with minimal experience in this important work.
As a new president, where do you begin? How do you set the tone for truly aspirational fundraising as you lay the groundwork for a culture of philanthropy on your campus? How do you quickly get up to speed on the existing strategies, evaluate their effectiveness, and assess the potential for growth? What information do you need to make this assessment? How do you build institutional commitment? How can the time you spend with donors deepen your knowledge and help you become a better leader on campus? And how much of your busy schedule should you devote to these responsibilities? This chapter explores these and other questions.
Historic declines in traditional revenue sources and pressure to moderate tuition growth have heightened the need for fundraising on public and private campuses. Increasingly, institutions turn to private support to help underwrite strategic initiatives, new or improved facilities, and support for students and faculty. Universities often prioritize fundraising in selecting new presidents, deans, and other leaders. Yet many new leaders have had minimal exposure to the field. For example, a new president may have had experience raising money as a dean or provost, but for most, this will be the first time they have had responsibility for university-wide fundraising and alumni relations. Meanwhile, board members and others point to fundraising successes at comparable institutions and say, “Why not here?”
Where to begin? Achieving aspirational fundraising goals involves a lot of teamwork and many moving parts. How do you set the right tone and lay the groundwork for success? Who are your key partners? This chapter focuses on developing excellent development and alumni relations programs, but from the start you must keep in mind that success will also require best-practices work in areas like marketing, internal and external communications, and government relations. The president provides leadership and direction for all these programs and must ensure coordination among them.
Early on, the institution will look to you to build a culture of success, set and achieve aspirational goals for fundraising, and broaden engagement. Your team will need you to engage volunteers and get the message right. You need to quickly evaluate the effectiveness and potential of existing strategies and programs, being watchful for needed change. How much time should you devote to these responsibilities, and what’s the best way to spend that time? This chapter explores these and other questions.
Do I Have the Right Culture to Grow Philanthropy?
Your most important question may be the one that asks whether you have the right culture to grow philanthropy. Success will be less a product of structure and reporting relationships, and more a result of effective communication, collaboration, and broad-based ownership of the program’s objectives. Simply revamping the organizational chart might be tempting as a first, but it’s usually better to leave the existing structure intact at first, concentrating instead on leading by example as you foster teamwork and lateral collaboration.
Various structures can work well if there is a university-wide commitment to the program and a culture of collaboration. In private universities, the advancement program will typically be a division of the institution, reporting to the president through a senior vice president. This person should become a valued member of your leadership team.
In public universities, the structures are often more complex, involving outsourcing, or partial outsourcing, to independent foundations with their own board. A few campuses have multiple foundations, and reporting relationships vary. Typically, foundation CEOs report to their board, but it’s best practice to have the CEO also participate on the university leadership team. Also typically, the president serves on the foundation board, which will give you an avenue to communicate directly and confidentially with the board regarding the CEO’s performance. Similarly, other academic leaders should have the ability to provide input regarding the performance of their development and alumni relations teams.
A strong, trust-based relationship between the president and her or his vice president or foundation CEO is a primary requirement for this culture of collaboration. You set the tone for the entire program, and the two of you must have each other’s back, such as when the donor community expresses concern about a decision you’ve made. A president I worked with had to make a difficult decision about renaming a building because of issues in its namesake’s past. He worked closely with the foundation’s leadership to make sure the voices of donors to that part of the university were heard. The foundation also played a key role in helping donors understand and appreciate the campus perspective. Take the time to develop your relationship with your chief development officer, and there will be many dividends.
Fundamental concepts are the same for those who lead a development program within an institution. Don’t squander your time trying to change the structure. Focus instead on fostering transparency, communication, collegiality, and teamwork.
Once you’ve familiarized yourself with the structure and with how well communication flows within the organization, learn how the institution manages relationships with its very best donors. How are decisions made about when and how to approach these donors, especially those with multiple interests? Ideally, you will soon develop your own strong relationships with these key friends of the university, and decisions about the relationships and potential requests for support will flow through you.
You also must learn how the institution (or your unit) establishes fundraising priorities. Is it a collaborative effort between the university and the foundation? What role does the provost play? How are deans involved? You want enthusiastic buy-in across the university. The fundraising program should never set priorities, but it should participate in the process and test the market appeal of major initiatives. As you evaluate these processes, it’s important to appreciate that development revenues are a source of strategic investment and that, as one president put it, they are “not an unlimited resource.” Do your development objectives reflect this thinking?
Once priorities are established, how well does the development team work to match strategic priorities with donor interests? And how agile is the institution when responding to major funding opportunities that may not be included in the strategic plan, which is often the case with many of the biggest potential gifts. Having productive conversations about whether you can align your objectives with the vision of a potential megadonor can be historically important to your institution.
Finally, if your structure includes a foundation, is there an MOU that defines the relationship between the university and the foundation? The MOU is typically a legal document prepared by counsel and reviewed by the university and foundation boards. What are the principal elements of that agreement? When was it last updated? Does the MOU afford you the ability to help select and evaluate the performance of the foundation CEO? Are academic leaders able to provide input on the development goals and on the performance of their development and alumni relations team? Do these conversations occur regularly? Does the foundation’s overall behavior reinforce the culture of communication and collaboration, and build broad-based ownership? Asking these questions will establish you as the leader of the program and will send the campus a message about the type of program you want to build.
How Do I Encourage Aspirational Goals for Fundraising?
One of the most important roles a new leader can play is to raise the bar for university aspirations and for the fundraising to help meet them. In proposing new levels of achievement, it’s important to be aggressive and realistic at the same time. Process is important. Hope may not be a strategy, but an aggressive goal, based on professional analytics and coupled with compelling objectives, will inspire your constituency. However, unrealistic, shoot-from-the-hip expectations undermine your credibility with staff and volunteers. Your own enthusiasm and personal commitment of time and effort to active participation in the fundraising process is critical.
One new leader took the reins at a research university that had never launched a comprehensive campaign and had been bogged down in strategic planning. Knowing that he needed to convince the campus that a comprehensive campaign was really going to happen, he set a deadline for completing the strategic plan and hired new, experienced leadership for the development program. Working with the provost, he established development expectations for deans. He set a compelling example by tirelessly meeting with prospective donors and asking for gifts when appropriate. A few large early gifts got attention on campus. Within a few years the university community began to believe donors would make significant investments across the campus. Development activity accelerated and in five years, the university more than doubled its yearly fundraising. This included gifts that would help dot the campus skyline with construction cranes on a campus that hadn’t had a new building in twenty years.
In another situation, a new president at a smaller land-grant institution raised expectations by challenging the foundation board and development team to double the fundraising goal for a much-needed athletic project that had been dragging. A few key donors stepped up and pushed the effort past its goal. The institution built on this success to develop a campus-wide major gift program, and today, several years on, that foundation has increased its productivity significantly, and the president is regularly collaborating with the foundation to bring in eight-figure gifts.
The new leaders in these examples understood how to set ambitious goals and discern donors’ motivations. They fostered a contagious confidence that more diligent attention to fundraising would produce better results.
All of this depends on setting goals that are both aspirational and achievable. The key to that is in your data. In establishing a long-range goal for your fundraising effort, look at what the program has done over the last five to ten years. Can you lift this trajectory? What evidence supports this? Are the potential donors there? What investments in the program will have the best ROI? How can you fund those investments?
As you review the fundraising totals, there will likely be “spike” years, but look for the trend line. In a healthy program, it will move steadily upward and will typically increase more dramatically during university-wide campaigns. Proprietary research by a national consulting firm discovered that growth rates in campaigns at one group of research universities they work with averaged 9 percent, compared to 4 percent at institutions that were not in campaigns. Over the course of a ten-year campaign, this five percent margin represents a very significant difference. Once you understand your trajectory, your goal will be to bend that trend line upward. This is not a simple task and requires analytics, strategy, and, in most cases, investment. Launching a comprehensive university-wide campaign that has the support of your entire community is one of the best ways to do that. (See Kevin Heaney’s chapter for more information on campaigns.)
The right target growth rate for your program depends on various factors, including institutional leadership, campus engagement, investment in the program, and the availability of large gifts. Compare yourself to peer institutions. Are your results comparable to those of leaders in your peer group over a statistically significant time? If you’re lagging, why? Peer comparison data is available through the Council for Advancement and Support of Education (CASE), located in Washington, DC. In addition, many consulting firms will prepare a customized report for your organization.
It’s also valuable to pay for an external assessment of the fundraising potential of your alumni/donor database to determine whether you have the potential to achieve what you have in mind. In other words, can you identify a sufficient number of people with the financial capacity to make a significant gift. You have probably heard of the 80-20 rule, which today is more like the 90-10 rule. Simply put, this principle holds that 90 percent of your fundraising capability will come from 10 percent of the donors. This formula has been validated in many fundraising campaigns. Many institutions will engage an external consultant to help evaluate the financial potential and interest level of the donors who will be asked to give 90 percent. In addition, the study will tell you whether your development officers and academic leaders are spending time with those top prospects. The external review should identify new prospects. Does the development program have a strategy to reach out to newly identified people with significant potential?
Other questions to consider: Are your academic leaders prepared to make a major ask? Are you helping them develop their capabilities? Is additional investment in the major gift program warranted to meet the goal of building relationships with those who will provide most of the giving? Again, while all these questions can be addressed internally, I’d recommend seeking the perspective of an independent consulting firm. CASE can provide information on firms that do this work.
Once you have a sense of the program’s trajectory and the potential of the donor pool, it’s time to talk about realizing that potential. One school of thought holds that the best way to incentivize outstanding results is to call for “Big Hairy Audacious Goals” (BHAGS). Be careful with this. One president was encouraged by the board to set a ten-figure goal for a campaign, even though a feasibility study done by a very good consulting firm recommended an ambitious but more modest objective. For twelve to eighteen months, the big number seemed to get the attention of the deans and development officers, but when the leadership gifts failed to materialize, faculty became disenchanted, development officers took new jobs, and the president eventually moved on. The next president had to unwind the campaign and rebuild the development program.
Fundraising is a discipline that rewards hope and ambition if those are accompanied by rigorous attention to detail and process, and if the goals are based on reality. Jim Collins describes this as the Stockdale Paradox in Good to Great. “Retain faith that you will prevail in the end, regardless of the difficulties, and at the same time confront the most brutal facts of your current reality, whatever they might be” (Collins 2001, 86). And of course, as president (or as leader of an academic unit), you need to be disciplined too. Changing priorities unpredictably will undermine the efforts of everyone around you.
To summarize, your institution’s fundraising trajectory over the next decade will depend on five things:
- compelling funding priorities based on the strategic plan,
- your current trajectory,
- the potential of the donor pool,
- campus-wide engagement, and
- investment in the program.
Set your expectations for success based on a professional evaluation of these factors and you will likely succeed beyond your expectations.
How Do I Build Institutional Commitment and Support for a More Ambitious Fundraising Effort?
Achieving aspirational fundraising goals requires a three-way partnership involving academic leadership, the development and alumni relations staff, and volunteer leaders, such as members of your governing and foundation boards, alumni association, and constituent advisory boards in the colleges and athletics. The Association of Governing Boards in Washington, DC (AGB), is an excellent source for guidance on building strong boards and committees in higher education.
Generating enthusiasm and aligning these groups with the goal is essential. It takes a combination of vision and process. A shared vision helps everyone see the potential benefit to the institution and the people it serves. Process creates the daily discipline of making it happen. In both areas, you must set the tone. In this spirit, one successful president has adopted Collins’s mantra of “disciplined people, disciplined thought, disciplined action” (Collins 2001, 121). Her university has achieved remarkable success in its development program during her decade-plus tenure. Another president, also a Collins fan, told his development team to look at the campaign priorities as a “to do” list, not a wish list. This disciplined approach helped his team have great success guiding donors with institutional priorities that were clear, strategic, and consistent.
To achieve buy-in to a shared, compelling vision, ask yourself: How recently have your institution’s vision statement and strategic plan been updated? Does the institution use the plan? Does the provost hold deans accountable to the plan at budget time and during annual reviews? Do key audiences on and off campus understand the plan? Is the plan aspirational enough to motivate increases in philanthropy? It might be important to start a new visioning and planning process as a prelude to an enhanced fundraising effort, but maybe all that’s needed is an update of the plan to make sure it reflects your priorities.
Be sure to work with your provost to share iterations of the plan with faculty groups, the foundation staff and volunteer leaders, inviting feedback. Yes, the fundraisers’ job is not to tell the university what to do, but they can provide valuable feedback on whether the ideas in the plan will make sense and resonate with donors.
It’s also important to make fundraising effort a priority in the performance evaluations of academic leaders who are responsible for development work. Does the provost evaluate deans for their performance in advancement? As a dean, what are your expectations for your department chairs? Similarly, how is development officer performance measured? What metrics are used to manage and evaluate their performance? How are performance management issues addressed?
But successful development work is not just about metrics. It’s about relationships. Donors absolutely hate having to “break in” a new development or alumni relations officer every year or two. What’s your turnover rate in advancement, and how does it compare to industry standards? This information is also available through CASE. Ideally, your rate will be close to the norms. High turnover can suggest an unstable organization, but very low turnover rates may suggest people are too comfortable in their positions. If either rate seems off, ask why and seek mitigation. A strong process for evaluating performance and careful monitoring of staff attrition are essential elements of a strong development and alumni relations program.
How Do Volunteers Add Value to the Development and Alumni Relations Program?
Volunteers play many valuable fiduciary and strategic roles. Their active engagement and personal generosity set a tone for the entire community. Healthy advancement programs effectively engage volunteers in a wide array of roles and source these volunteers from many areas, including alumni as well as the business and professional communities. Many institutions also build ties with underrepresented communities to increase their volunteer participation. This type of engagement serves to deepen commitment to the institution, often leading to an increase in personal philanthropy. Roles can be as diverse as working as a docent in your museum to serving as a member of the campaign steering committee. What role do volunteer leaders play in your advancement program. How does the institution orient them? Do you seek their feedback? What’s their level of satisfaction, and their giving rate?
This business of engaging volunteers and encouraging them to be ever more active in their support of the university is crucial. It’s a truism that volunteers desire meaningful engagement, but are they getting it? Are volunteer leadership meetings a series of PowerPoint presentations followed by cocktails and dinner? Or do the meetings encourage meaningful dialogue between the volunteers and university leaders?
Look into the role of the alumni association. These organizations play a pivotal role in maintaining relationships with graduates and others. Today, associations work hand in hand with their development partners and often lay the groundwork for relationships that will result in generous gifts in the future. One donor I worked with shared how his experience with his alumni association started a process that led many years later to a transformational gift to name his college of business. “They kept sending me these requests for help,” he told a student audience on the day his gift was recognized. “We could hardly pay the bills, but I couldn’t throw that envelope away. One day I decided to send them $5.00. We’ve given every year since then, more generously as we were able. The relationship grew and here we are today. I’m not sure it would have happened if we hadn’t started the habit of giving back long ago. I encourage you to do the same.”
Although this relationship between friend-building and fundraising has always existed, many alumni associations in recent years have taken steps to spell out the role they will play in building relationships and have established metrics to measure their results. Some universities have launched “fundraising and engagement campaigns” to elevate giving and participation. The association owns and monitors metrics for engagement goals, such as in this example from a current university-wide campaign. The alumni association has set these goals:
- Enhance student and educational success, through a wide array of support programs offered through the association.
- Support advocacy and government relations efforts.
- Contribute to diversity, equity and inclusion goals by building programs and events that are welcoming and accessible to all.
- Increase giving and revenue, including activities to maximize the pipeline of donors.
From a development perspective, the most meaningful form of engagement is on the mission side, where volunteers can mentor a student, engage with a professor, or perhaps even lecture in a class. These experiences can change lives and deepen participants’ commitment to your institution. More information on alumni goals in a campaign is available through CASE.
As president (or academic leader), you have a unique ability to acknowledge your volunteers and note the incredible resource their service represents. Your presence at their meetings and activities, even for a few moments, conveys the institution’s belief in the value of their work. Many presidents make a point of spending serious time with volunteers across the university community, often building trusting relationships. As Ed Ray observed: “This is a group of smart, dedicated, and experienced people. Why wouldn’t I want to elicit their advice?”
How Much of My Time Should I Devote to Advancement Work? And How Should I Spend That Time?
Prioritizing this work in your own schedule is the clearest way to set an example for other campus leaders. Best practice suggests allocating about 20 percent of your time for this activity, and more is better if you can manage it. This often requires diligent attention to your calendar. Before you even arrive on campus for your first day, people will be busy deciding how to use your time during those first months on campus. While their input is valuable, it is important to recognize that it will reflect their priorities and not necessarily yours. Make sure to block time for development visits and meetings and strategize with the development team about how to best use that time.
During your “rollout” to your new university’s community, you’ll be asked to make remarks on a regular basis, ranging from casual to formal. Staff will likely provide talking points for these engagements, but they’ll need your guidance if you want the words to reflect your message. Spend some time before you arrive thinking about your own priorities and the messages you want to present early on, building on what you shared during the interview process. Don’t miss this early opportunity to openly support enhanced fundraising. Presidents are often asked to make a formal address to a faculty gathering at the start of the academic year. Often a president will labor over this speech, knowing that he will be able to use the key messages repeatedly over the course of the year.
While it’s often necessary to devote time to board meetings and receptions, make time to meet one-on-one with the institution’s top donors. For example, a good travel day might include three or four visits with individuals, followed by a reception with a larger group during the evening, and perhaps a small dinner afterwards.
Ideally, you will be able to schedule a meeting with each of your institution’s top fifty donors in your first six months, in addition to spending time with leaders like the chairs of the alumni association and the foundation. The development staff should brief you for these meetings, including a short bio of the person you will be visiting, a summary of their relationship with the university, and a suggested outline for the conversation.
Much of this development activity can be scheduled in a disciplined and well-structured way, but occasionally you’ll need to be flexible and opportunistic. I was in Texas with our president once. The donor we were visiting suggested we change our plans for returning home and make a stop in Colorado. It turns out he’d spoken to a fellow graduate and had arranged for us to visit with him about a seven-figure gift. The president rearranged his schedule, completed a successful ask, and initiated an impactful long-term relationship for the university. If we had worked through the normal scheduling process, it may have taken weeks to get that appointment, and the donor’s inclination to generosity may have receded.
Another issue to consider ahead of time is whether you will want to be staffed for your development meetings. The staff you inherit will have expectations about how this should work. It’s a good idea to find out what their expectations are. If yours are different, explain how you would like to work, and why. I strongly recommend including a senior development officer for most donor meetings, typically your vice president for advancement/foundation CEO or another senior colleague. These senior staff members will likely already have a relationship with these donors, and can help organize the agenda, submit a contact report and initiate follow-up as needed after the meetings. In addition, the travel time between meetings will afford you the opportunity to develop a collegial relationship with your senior development officers, and for you to learn more about the program.
Another issue to consider is whether to include your spouse/significant other in social occasions with donors if he or she is inclined to participate. These lunches and dinners can be very effective in building relationships. In these social situations, I would typically not include development staff, although there may be situations where it is a good idea based on the agenda or the development officer’s relationship with the donors.
What Is Your Message?
Hone your message during your first few months on campus. Keeping in mind that you’ve been asked to make increasing philanthropy a top priority, how can you raise sights both internally and within the donor community? Both audiences will relate to your vision and passion for the mission of the university. They will wonder why you wanted to become a part of this community. What attracted you, and how does it tie to your personal story? For example, one president of a land-grant institution connected his experience of becoming the first person in his family to get a college degree to his passion for the land-grant mission of broadening access. He overcame great odds to get a degree and eventually a PhD. His short but compelling story resonated with the institution’s alumni, many of whom had similar backgrounds. Stories about personal connection to the mission will resonate more than talking about institutional achievements. “Pride points” are important, but generating an emotional connection with donors helps them relate to your vision.
While fundraising can seem to be a distraction from your other obligations, it can also provide an avenue for gaining perspective and great understanding of the institution’s work and impact. One president, reflecting on his initial exposure to development as dean of a major college of arts and sciences, shared that he was anxious about doing development work when he first stepped into the job. But as he met with many donors over the years, he gained perspective on the work of his college that far surpassed what he may have gained by spending all his time on campus. In addition, he built lifelong relationships for the college and raised a great deal of money.
At its best your work in advancement will be fully integrated with your work on campus. Raising an institution’s fundraising productivity to a new level is an immense challenge but also very rewarding. It all comes back to having the right culture, setting the vision, and meticulously following the process.
Collins, Jim. 2001. Good to Great: Why Some Companies Make the Leap and Others Don’t. New York: HarperBusiness.