Institutional Advancement

Transcription

1 Institutional Advancement Timothy C. Caboni Vice Chancellor for Public Affairs Professor of Educational Leadership and Public Policy University of Kansas Presentation to the Tennessee Independent Colleges and Universities Association December 2016

2 History of U.S. Educational Philanthropy

3 Difference between Charity and Philanthropy Charity - concerned with the immediate condition of individuals and connotes serving the poor Philanthropy - more impersonal and dispassionate approach to bettering the human condition through institutionalized giving - focused on root causes of human problems andsystematic reform

4 Early American Origins Began in Massachusetts Bay Colony Sent 3 clergymen back to England to raise money to support Harvard This process of sending solicitors to England for college fund raising continued for almost a century Revolution ended this

5 Many Early American Institutions Named for Benefactors John Harvard - gave 779 pounds and a library to start Harvard Yale s initial gift to Collegiate School in CT was a modest shipment of goods from England Nicholas Brown provided $160K to the College of Rhode Island Charles Tufts gave land Henry Rutgers gave a bell and $5,000 to the trustees of Queens College University of Chicago stands out - John D. Rockefeller - $600,000 gift in 1889

6 The Annual Alumni Fund First Formal Association of Graduates - Williams College - Society of Alumni 1821 Oldest Alumni Fund - Brown 1823 Oldest Public Alumni Fund - Michigan 1897 Early imitators were: Princeton, Amherst, Dartmouth and Cornell 1936 Survey - fewer than half of American colleges had an annual alumni fund

7 4 Eras of Fund Raising Era of Non-specialists ( ) Era of Fund Raising Consultants ( ) Era of Transition ( ) Era of Staff Fund Raisers ( Present)

8 Noteworthy Trends Shift away from church-affiliated and individual and personal solicitation to direct institutional appeals of an organized and professional nature Shift from charity to philanthropy Fund raising plays an important role in all aspects of institutional life, rather than being limited to crises or major changes in direction Widespread acceptance of fund raising among state-assisted colleges and universities

9 THEORETICAL CONSTRUCTS

10 Theories of Fund Raising Systems Theory Interdependence of Organizations and Their Environments History of Philanthropy in the U.S. Giving is about 2% of GDP Theory of the Commons (Lohmann) Commons form to produce common goods (desirable outcomes) Social Exchange Theory

11 Theories of Fund Raising Stakeholders and Boundary Spanners Autonomy and Accountability Fund raising driven by institutional needs Resource Dependence Diversification of funding streams (protects autonomy) Magic Buttons Coorientation Theory Matching institution needs with donor needs (mutually beneficial)

12 Theories of Fund Raising Situational Theory of Publics (Grunig and Hunt) Level of Involvement, Problem Recognition and Constraint Recognition (active, aware and latent publics) Hierarchy of Effects Repeat Behavior Fund Raising Techniques (Mass Media, Controlled Media, Interpersonal Communication Ladder of Communication Effectiveness ) Integrated Relationship Management Fund raising encroachment

13 FUNDRAISING ETHICS

14 Core Traits of a Profession Extensive period of training and socialization Professional associations Code of conduct or ethics Systematic body of theory and mastery of knowledge Ideal of service and client welfare Fund raising clients - institution and donor Autonomy

15 Professional Self-regulation Greenbrier II - No body for sanctioning Formal social control mechanisms Code of Ethics and Donor Bill of Rights Informal social control mechanisms Norms

16 What are Norms? Shared beliefs about how an individual should act in a particular situation Prescribed and proscribed patterns of behavior Without a normative structure, individuals in the profession would be free to act as they saw fit Norms assure that professional choices adhere to the ideal of service Collective conscience of the profession

17 Two types of norms Inviolable Violation is the most egregious and warrants the most severe sanctions Admonitory Inappropriate behavior, but does not require the severity of sanctions reserved for violation of an inviolable norm

18 Inviolable Norms Exploitation of institutional resources Taking advantage of an institution s funds, or other things of value the institution possesses for personal gain Institutional disregard Behaviors which would damage the reputation of the fund raiser s employing institution Misappropriation of gifts Using funds for purposes not intended by the donor

19 Admonitory Norms Commission based compensation Fund raiser s salary is paid in-part, or in-full as a percentage of dollars raised Dishonest solicitation Untruthfulness when asking for a gift Donor manipulation Exploiting individuals who have lost, or are losing the capacity to make sound decisions

20 Admonitory Norms Exaggeration of professional experience Embellishing the fund raising work done for a previous employer, or at one s current institution Institutional mission abandonment Attracting gifts for activities and programs for which the institution has no need Unreasonable enforcement of pledges Taking legal action against a donor or their families in the pursuit of gifts promised to the institution; refusal to return a gift when a donor is unhappy with its use

21 What Does this Mean for the Profession? Moral boundaries do exist for the practice of fund raising in colleges and universities Because fund raisers presumably use norms to selfregulate, it is an additional marker of professionalism Identified normative patterns protect both institutional and donor clients Mirror the formal code of ethics and Donor Bill of Rights for CASE (revision is necessary to incorporate the institutional client)

22 Beginning Questions Is an appropriate volunteer fundraising board in place, and do its members fully understand their leadership role and responsibilities? Has your institution systematically examined its fundraising potential? Is the development office appropriately organized and configured for optimum productivity and results? Has your institution made the prerequisite investments in institutional advancement to attain the desired results? Does the president play an appropriate role in leading the fundraising program and integrating it into the institution s superstructure?

23 ANNUAL FUNDRAISING

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29 Gift Pyramid 60% of gifts come from 10% of donors 15-25% of gifts come from 20% of donors 15-25% of gifts come from 70% of donors

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39 Measuring Annual Fund Returns Average gift = total dollars / # of gift Percent return = number of gifts / # mailed Projecting potential returns = # mailed x % returned x average gift

40 Building and Maintaining the Base Acquisition mailings Enlist new donors Never Givers Renewals produce income (sybunts, lybunts) First time givers renew at 50% rate, after that, 70-80% 50% or your returns come in the first week

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43 MAJOR GIFT FUNDRAISING

44 Pyramid of Giving PLANNED GIVING Bequests Wills/Legacies Estate Gifts Net Worth Gifts MAJOR GIVING Endowment Campaigns Capital Campaigns Special Projects Investment From Individuals/Corporations & Foundations Involvement Interest ANNUAL GIVING Support Groups Special Events and Benefits Annual Campaigns Direct Mail Program The general public Information Identification

45 Efficiency vs. Effectiveness Difference between effectiveness (maximizing the net between total gifts less fund raising costs) and efficiency (minimizing the average cost per dollar raised) The objective of an institution's fund-raising program should not be to spend as little as possible each year to raise money, but to maximize the net.

46 Efficiency vs. Effectiveness A program that annually produces $2 million at a cost of $160,000, or 8 percent, may look good and is indeed efficient, but one that produces $3 million at a cost of $300,000, or 10 percent, is presumably of more help to the institution [i.e., more effective] -- it is bringing in $860,000 more.

47 Return on Investment Analysis ROI = Funds raised as a percentage of fund raising expenses Bottom line cost percentages are not a useful measurement for internal management purposes Performance of one kind of fund raising program cannot be evaluated against others

48 ROI Analysis

49 Moving from strategic plan to campaign plan: Translating strategic objectives into fund raising objectives Striking a balance among campaign goals The product line scalability and marketability Making the rules clear and simple The campaign prospectus and case

50 The feasibility study and the role of counsel Choosing and using counsel Design and purpose of the feasibility study

51 Volunteers and staff Real work for real volunteers Job descriptions Choosing the campaign chair Staff-driven or volunteer-driven?

52 The Value of A Campaign Identifies and develops new leadership Focuses public attention on your institution and its programs Unites constituents; strengthens staff and volunteer morale Has positive effect on public image Identifies new prospects for ongoing annual support programs and deferred giving Raises donor sights for annual giving and future campaigns Helps set institutional priorities

53 Phases of the Campaign: The quiet phase or nucleus fund The kick-off and early public phase The importance of intermediate goals Charting progress: the trendline

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55 Campaign phases (cont.) The homestretch Victory, celebration, and the renewal of the planning cycle

56 Principles of Gift Charts The first two gifts should equal 10% of the goal: $100,000 The next four gifts equal an additional 10% of the goal: $100,000 The remaining gifts are flexible and can be broken down into various categories: $800,000. This chart is most effective with fundraising goals of $25,000 or more

57 $1M Gift Table

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59 A move is: A change in solicitation status; (e.g. when a prospect moves from the cultivation stage to being ready to be solicited.)

60 Compared with an action : Which is the activity, or interaction you have with the prospect. (e.g., a phone call, a meeting, or a campus tour)

61 Pipeline concept Distribute prospects throughout every stage of the solicitation cycle, Continually introduce new prospects into the cycle and, Move existing prospects to the next level of engagement.

62 Realities of Major Giving; 3 to 4 prospects for each $100,000 gift You get 75% of what you ask for It requires 7 to 8 personal meetings and 18 to 24 months to cultivate and solicit

63 Establishing a Reasonable Prospect List Available of days per week multiplied by Number of contacts per day multiplied by Number of weeks per year divided by Number of meetings per prospect

64 Sample calculation (dw x c) (3x2)=6 ((dw x c) x wy) (6)x48=288 ((dw x c) x wy)/mp (288)/4=72 ((dw x c) x wy)/mp ((3x2))x48)/4=72

65 Penn Moves Management System 200 Meaningful moves per year 5-6 Moves per week 40 Weeks (52-vacation, training, etc) Broken into: 50% (100) Cultivation 30% (60) Solicitation 20% (40) Stewardship 25 Major Gifts closed per year $625,000 (25 x 25K)

66 Northwestern University Fundraiser Evaluation

67 Stages in the cycle 1 Identification 2 Research 3 Planning 4 Cultivation 5 Solicitation 6 Stewardship 7 Renewal

68 Asking for a Gift From Individuals: The Solicitation Conduct solicitation in comfortable setting Decide on best solicitor(s) Frame and focus your introduction Discuss benefits and the vision of a gift Ask the prospect to consider of a gift of $X Wait for a response -- Do not speak again Agree on next steps before concluding

69 Making the Ask: Raising Sights We hope that you will consider a six figure gift so that I hope that you will consider making a leadership gift in the $$$ range Your participation at the $$$$ level would enable the school to We hope that you will consider funding the first 21 st Century Professorship at the $1M level

70 Possible Negative Donor Responses Tell us more about the project Who else is supporting this The timing is bad That s a lot of money We re not as wealthy as your other donors I m not sure I want to support this project I need to check with my advisors

71 Responses to Objections to the Project: Ask them how they envision the project and then let them describe their vision of what they want to accomplish. Take that information back and see if it fits into your organization s mission or what your organization is trying to accomplish. Set another meeting with the prospect two weeks later to discuss the revised proposal. If necessary, be prepared to say that the project the donor wants to do may not fit with your organization s priorities.

72 Concern Over Ability to Make the Gift: Get a sense of the donor s complete financial picture. Listen to their needs and fears. Develop a package that won t adversely affect them financially. Educate them about various gift-giving vehicles and payment methods available and then suggest that they work with their own financial planners in deciding how to make the gift.

73 Objections to the Amount: Focus the ask not on the amount, but on the project. Build a case for what the project will do and then get them to respond more from the perspective of how to get it done rather than on the amount needed to get it done. That way, you can have more negotiating room on the amount. Once they ve expressed a certain level of interest in the project, they ll do whatever they need to get it done.

74 Intellectual Barriers to Success Not making the case clearly Not showing need Asking for too much or too little Not having done the right research Not showing or defining success Not having engaged prospect during cultivation Not timing solicitation properly

75 Personal Barriers to Success Seeing fundraising in a negative light Fearing rejection Feeling inadequate to receive support Feeling uncomfortable with wealthy people Not having/projecting positive self image Not feeling part of success

76 Contact Information Timothy C. Caboni Vice Chancellor for Public Affairs University of Kansas 230 Strong Hall, Jayhawk Blvd Lawrence, KS publicaffairs.ku.edu