The Chronicle of Philanthropy features Senior Vice President Patricia B. House, Ed.D. as she details the current trends that may be causing a decline in giving to higher education, and the four steps university and school development teams should consider in order to prevent philanthropic stagnation in education.
The 2017 Giving USA™ philanthropy report notes that donations to educational institutions rose by only 3.6 percent in 2016, a much lower rate of growth than the 8 percent increases in each of the previous two years. While it’s not quite time to push the panic button, the data suggest that some donors may be questioning the impact of their giving to education, and whether their gifts to universities, colleges, and independent schools make a real difference to society.
This change in philanthropic motivation hit home with me last year when a donor I visited declared he had lost interest in supporting the fine schools in his region – even those his grandchildren attended – because doing so felt like “gilding the lily,” because other organizations seemed in greater need.
What’s fueling the trend?
Since that interview, a number of other wealthy and generous individuals have expressed similar sentiments, saying they get more bang for the buck by supporting other types of initiatives, such as an urban research center that advances social justice. Higher-education institutions and independent schools could certainly claim they have major impact in furthering social justice by teaching critical-thinking skills, supporting research, and encouraging community engagement, yet donors are choosing to bypass that giving opportunity. One alumna of an independent school for girls told me she would rather write a check to an organization with a more direct impact than her alma mater seems to have.
Educational fundraising isn’t easy, despite the idea in the nonprofit world that schools and universities enjoy an advantage in having donor pools that are refreshed every year with new parent and alumni.
The reality is that alumni giving has declined at most institutions. Many external factors are contributing to the decline: large endowments viewed as greedy savings accounts in the face of increasing tuition; perceived administrative bloat on campuses; scandals in athletics and Greek life; clashes over freedom of speech; a weak job market; and a rise in the number of graduates earning so little that they move back home to make ends meet.
Generational trends are another challenge. With millennials seeking out causes bigger than themselves, supporting a class-reunion campaign pales in comparison to providing clean water in Africa or strengthening the rights of the disenfranchised. Recent graduates mired in college debt are often not receptive to direct-mail appeals by their alma mater. Time is currency for those of younger generations, who are more likely to give by participating in alumni functions or volunteering for causes they support.
So what can a college development team or independent school do to win the battle for private donations? To stay competitive, educational institutions must be relevant, test new approaches, focus on retention, and continually review their return on investment.
Staying relevant requires making a case that aligns with the motivations of donors and ties their support to impacts that extend beyond the institution’s walls.
The alumni-relations department has a critical role in ensuring relevancy in donor programs. Today’s alumni seek career connections, social-media activity, and informative webinars rather than branded credit cards or old-fashioned alumni directories. Make alumni your brand ambassadors, your admissions advocates, and the power behind your Facebook page by providing volunteer opportunities they can sink their teeth into and by giving them regular updates and messaging.
Don’t overlook opportunities for cultivation and stewardship by appealing to faculty-student relationships and collaborating with athletic fundraising efforts that tap into the positive experiences of former student-athletes.
Test new approaches
Adopt a big-ideas approach to development and embrace “there-is-no-box” thinking. Work with prospective donors to move your institution forward by collaborating on initiatives that align with their philanthropic priorities.
Storytelling is highly effective for motivating donors to act. Gather stories from administrators, such as the student life vice president, career-services director, library dean, or lower-school head.
Rather than constantly expanding the number of fundraising prospects in your portfolio, think about limiting them. More prospect visit activity alone doesn’t increase dollars. Gift officers with more realistic, attainable, and strategic visit goals raise more money. Engage in strategic portfolio management and set individualized goals.
Adjust communication approaches to meet donor desires. Move from print publications to customized microsites. Create a crowdfunding platform for mini-campaign projects to attract donors who don’t make regular donations to the annual fund but may occasionally make modest gifts.
Appeal directly to female prospects and help them make their largest philanthropic gift ever. Forego the usual ladder approach and ask targeted prospects to increase giving tenfold in one year; for example, ask a $25,000 annual donor to give $250,000. Adjust the period over which donors can fulfill their pledges.
Focus on retention
Be transparent. Show donors that their dollars are being spent wisely. Share frequent stories about the impacts of annual fund gifts.
Put time and attention into stewarding donors. Create a new-donor welcome packet, distribute timely and easy-to-read endowment reports, demonstrate effective management of funds, and invite brick-and-mortar donors to tour the facility they have helped build. Review acknowledgement letters to be sure “you” shows up twice as much as “we” in the message.
Annual giving isn’t the only way to assess donor interests. Be sure to define and track engagement. Find out who opens email blasts, likes you on Facebook, responds to surveys, or attends events. Maximize your database by consistently recording donor activity, and measure conversion rates on visit requests and solicitations.
Figure out what works – and what doesn’t
Assess the return on investment of your alumni chapters to determine how much effort staff expends and whether your alumni are making meaningful connections with the institution through that avenue.
Stop guessing and start listening. Consider investing in a survey to gather feedback on donor preferences regarding communication, programming, and fundraising. Establish a donor advisory board.
Evaluate the effectiveness of traditional galas and auctions. Consider reallocating some of the money you currently spend on events to donor-retention efforts.
Support staff by investing time in coaching and money for attendance at professional conferences. Encourage involvement on nonprofit boards and establish better methods of performance review. Refrain from giving management responsibilities to major-gift officers so they can spend more time doing what they do best.
Concerns about making gifts that don’t make a difference may seriously affect the philanthropic decisions of today’s education donors. In this age of disruption, when institutions compete for support like never before and donors have a myriad of options at their fingertips, organizations must continuously adapt their fundraising approaches to stay one step ahead of the curve.
– Patricia B. House, Ed.D. is Senior Vice President at Graham-Pelton Consulting.