Sunday, November 15, 2009

Notes From the Field

I thought I'd share with you some issues that came up in the last week and my response to them.

1. A donor was nice enough to offer her apartment in Paris for an auction. It's a wonderfully generous offer from an exceptional person but I tend to steer clear of auctions for all the reasons mentioned in my last few blogs; it suggests philanthropy is about getting something in return. I know; I shouldn't be so picky. In this case someone has offered a property that can be converted into cash for philanthropic purposes but, if you do too much of that, doesn't it contribute to a culture of "so what do I get for my giving?" Silent auctions are preferable but I wonder if events that rely heavily on them have a tendency to attract more "bargain hunters" than a philanthropists, and if we bring out too many of the former do we scare away or turn off the latter? Live auctions are more troubling to me. They seem to detract from the dignity of a philanthropic event which should be much more about the spirit of giving, the love of humanity and how the organization in question has made a lasting difference in the lives of those it exists to serve. I worry about making a spectacle of bidding on luxuries when we should be promoting the quiet contemplation of how we can work together to help those in need. Finally, I'm very skeptical about the efficacy of one-time or stand-alone fund raising events like galas and black tie events. The overhead for such events is usually very high, sometimes as much as one-third to one-half of the proceeds. If one took the same amount of money and invested it in field work (discovering and engaging prospects), it would generate more philanthropy in the long run. The best events are those that a highly substantive, that showcase the most selfless activities, and are part of a much longer approach to community building.

2. Several members of my staff did some exceptional work in looking at the number of prospects required to run a successful $2 billion campaign, then comparing that goal to the number that we currently had at all levels, where the largest gaps were, how many leads would be necessary to generate a sufficient number of prospects, how many discovery visits it would take to convert leads into qualified prospects and how many development officers would be required to complete the task. The exercise proved to be a great management tool and a teaching aid; it vividly demonstrates the time it takes to build a broad prospect base and how labor-intensive it is. It also demonstrates the need to keep a portion of an organization dedicated to discovery even during the most intensive campaigns so that there is the potential of greater sustained support after the campaign than before.

3. Though our work at Georgetown University over the past few years has produced a much broader field of prospects, appointments with those prospects are proving more and more difficult to secure. Where it once took about 10 calls to secure one face-to-face appointment with a new prospect, it now takes 20. And, we still see a large number of donors who, because they are very skittish about the stability of the economy, are reluctant to make multi-year pledges.

4. Donors continue to ask what institutions of higher education are doing to keep their tuition in check. Today's New York Times has an article about universities who have hired Bain Consulting to find ways to reduce their costs. Such efforts, whether they are guided by external consultants or the result of rigorous internal reviews, constitute a responsible reaction to changing times and growing public concern.

Monday, November 9, 2009

Admissions, Development and Institutional Integrity

After holding forth in my last two blogs about what philanthropy-seeking organizations can do to lessen the tendency of donors to engage in quid quo pro gift-giving, I heard from a friend who said she understood my larger points but still wasn’t sure what a development officer was supposed to do when confronted with an aggressive parent who whips out a checkbook and says, “Okay, exactly what do I need to give to get my daughter admitted?”

Here’s what I would recommend: When asked “what it will take,” a development officer should say, “I can track your child’s application and advocate on his/her behalf if the dean of admission tells me that he/she meets the general criteria for acceptance (in other words, your giving, past or prospective, cannot compensate for poor academic performance; your son or daughter has to be a credible candidate). The advocacy of the development office can be brought to bear when the dean of admission is trying to make a choice among equally qualified applicants and we can point to one who comes from a family with a long history of support of this institution or (if the parent is not an alumnus) an impressive philanthropic record elsewhere -- and the longer that history, the better.”

Development officers should not offer to advocate on behalf of an applicant if the parent puts a particular sum on the table or asks, “how much?” They should say they will have to recuse themselves from the admissions process if a direct offer is made and advise the parent that such an approach will not be well-received by the institution at any point.

In my ideal world, universities should give philanthropic preferences in this order:

1. To alumni families who have given consistently to, and been active volunteers over many years at the institution to which their child is applying;

2. To alumni families who have given years before their child applied;

3. To alumni families who gave just before their child applied;

4. To non-alumni families with impressive philanthropic records elsewhere.

Development officers and other institutional representatives should be exceptionally wary of parents who throw around promises of large gifts should their child be admitted. Parents with great financial capacity but no record of philanthropy anywhere are a high risk. If their child is admitted, they are likely to find reasons for reneging or to put additional quid pro quo conditions on their giving.

Considering a family’s philanthropic record if the child is admissible is ethical in my estimation. Admission directors will tell you that there is a bell curve to every admissible pool of applications with an eminently qualified group on the right tail and a marginal group on the left, and a “great middle” within where the differences between candidates are so slight or so subtle as to render them indistinguishable and statistically insignificant. A family’s philanthropic record, particularly if considered in the context of their means, is a legitimate way to differentiate among that group. And, the practice of “development admits” is even more defensible if the institution has a real commitment to “need blind admission” and to identifying and encouraging applicants from the most modest economic circumstances. A “development admit” should not displace a more qualified or a less economically-advantaged applicant.

If such policies and practices are in place, and the development staff is well-trained on how to articulate them, the efforts of those who try to buy their child’s way in can be blunted, the interests of constructive, consistent donors with qualified children can be protected, and the conscience of the school can be preserved.

Monday, November 2, 2009

Replenishing Our Philanthropic Soil

In my last blog post, I compared the American philanthropic culture to a “remarkably rich soil from which many wonderful things have grown." I voiced my concern about fairly widespread “hard sell” fund raising tactics that deplete the soil, that exploit the obligation that many Americans feel to “give back” by asking for “more, more, more” without feeling an equally insistent institutional obligation to actually do more. If too many institutions put more energy into raising money than they do in planning the most economic or efficient use of the funds raised, our philanthropic soil will become ever more depleted and more and more of what we call philanthropy will look increasing like quid pro quo deals.

Conversely, if we ask how we can best replenish the soil that has served so many so well for so long, my answer would be to think very carefully about the promises we make to donors, then to do as we promised. In too many cases, the promises are overly broad and overtly self-serving. Even institutions that do a good job of accounting for the dollars they raise often fall short in defining the explicit qualitative gains that have been achieved, particularly the difference they have made in the day-to-day lives of those that they exist to serve. No, I’m not saying that philanthropy-seeking organizations should not make promises; I’m saying that should make very specific, practical, well-thought-out promises and do all they can to deliver on them. I’m saying those promises should be less about creating more distinguished institutions and more about helping others. And, finally, those promises should be made only after institutions listen to their constituents and find where there is collective will to achieve a greater societal good.

The next best way for institutions to replenish our philanthropic soil is to commit themselves not only to creating a culture of gratitude but a culture of commitment. If we accept a gift, we accept a partner. A true partner is one with whom we keep faith even if he or she is not present. That involves everything from making sure the language of fund raising is not unduly depersonalizing (e.g. “targets” or “suspects” to be “nailed” or “hit on”) to ensuring that we never expend private funds for purposes that we would prove embarrassing or awkward if donors were in front of us demanding an explanation, and from requiring the institutional recipients of private funds to carefully document their use to creating systems that allow us to preserve “donor intent” over time. Too idealistic? Well, I’d say that idealism is one of the richest ingredients in our philanthropic soil so, if we’re going to draw on it and prosper from it, we’d better make sure to put enough of it back.

If we are authentic in abiding by our ideals, assiduous in the pursuit of our mission and scrupulous in the management of our resources, we can call our donors to a selfless philanthropic standard. But, if we let gaps grow between our word and deed, or allow ourselves to feel entitled to the automatic support of others, or become too transactional in our fund-raising approaches, or make philanthropy too much about what we want, we cannot feign surprise when donors ask, “Then what’s in it for me?”