Saturday, October 10, 2009

Appropriate To The Times

The ways in which organizations pursue their philanthropic goals may vary but all must develop fund-raising strategies appropriate to the times. And, in these times, when donors are living with less and worrying more about their financial futures, it essential for these organizations to address their fund-raising aspirations in the context of cost-containment. To prove this point, let’s take a closer look at the dilemma of educational institutions.

When the economy suffered a dramatic contraction, virtually every school, college and university realized there would be a corresponding demand for new levels of financial aid. Urgent appeals were issued and poignant cases were made to help donors understand that more and more families were struggling to pay for their children’s education. Yet, those appeals were often made to prospects whose net worth had precipitously contracted. Above and beyond the obvious problem of asking for more from people who had less to give was the issue of whether additional money would make any real difference if tuition was not capped. After all, if schools continue to increase their costs, the need for financial aid will rise in direct proportion. The only way for new financial aid dollars to make a significant difference is to keep costs from increasing.

Tuition payments have become an ever larger portion of the average family income and, in the case of many prominent schools, now exceed that benchmark. So, without cost containment, what becomes of ever larger amounts given in the name of financial aid? If the answer is, “Well, it will keep us from falling even farther behind and slow the rate at which we price ourselves out of more and more markets,” few will be motivated to give. The only satisfactory answer is, “We will contain costs at the same time we seek greater financial aid support to ensure access to students from a greater socio-economic range.” There’s a greater goal to be reached, a difference to be made, therefore, a reason to give.

Philanthropy, as interpreted through the American cultural lens, is about making something better, about helping worthwhile organizations and causes to go from good to great, not from survival to mediocrity or to prevent them from lapsing from greatness into something less. We don’t make large investments in organizations that are struggling, whose expenses are out of control, or in decline. So, the best case that can be made for an organization that finds itself with fewer resources or greater expenses is that it will contract strategically to maintain focused excellence. And this is exactly what we see universities like Princeton, Cornell and Duke doing.

When so many business have had to make strategic cuts in hopes of emerging stronger and so many families have had to reorder their priorities or give up on some dreams, it makes little sense for philanthropy-seeking organizations to claim they need more without first showing they have done all they could to reduce their overhead and focus their resources on doing the fewest, most essential tasks as well as they possibly can.

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