Hard Questions

One of the best ways to create a compelling case is to imagine, and answer before they are ever asked, the hardest questions that may be put to you on that particular topic. Since many institutions are trying to raise ever larger amounts for financial aid, let’s explore the hard questions associated with that topic to see if we’re prepared to answer them. Here’s a potential scenario:

Prospect:

What’s your top priority?

Fundraiser:

Financial aid.

Prospect:

Why?

Fundraiser:

So many families have been hard hit. They’ve seen their savings cut by at least a third and the value of their homes have declined by equal or greater amounts; both were primary vehicles for paying for their children’s education.

Prospect:

Then why did you raise tuition?

Fundraiser:

Well, it was our lowest increase in many years.

Prospect:

But why did you raise it at all?

Fundraiser:

Some of our costs continue to rise.

Prospect:

Why didn’t you just cut costs?

Fundraiser:

(If you can’t say you did cut costs in the past two years, your case is now substantially weakened; if you can you say, “We did,” the prospect might ask:)

Prospect:

What percent of the expense side of the base budget was cut? And what percent of the income side of the base budget did the tuition increases represent?

Fundraiser:

(If you didn’t cut as least as much as you raised through tuition increases your case is further weakened.)

Prospect:

Aren’t you creating the need for more financial aid every time you raise tuition?

Fundraiser:

Yes, but more of our budget is going for financial aid than ever before.

Prospect:

Where does the increased amount for financial aid come from?

Fundraiser:

(If you say “tuition, the prospect might ask:)

Prospect:

So you’re raising tuition to reallocate more to students with financial need? Wouldn’t it make more sense to hold the line on tuition by cutting the budget or even lowering tuition by cutting deeper?

Fundraiser:

(If you say the increased financial aid dollars are coming, “out of endowment,” the prospect might say:)

Prospect:

So, how long can you afford to do that? The value of your endowment declined in 2008 and you didn’t make up the difference in 2009 or 2010 (which is true in most cases). Is this the time to be eroding endowment even further?

Fundraiser:

(If you argue that tuition increases are essential to preserving quality as measured by faculty excellence, student-to-faculty ratios, curricular choices or first-rate facilities, the prospect might say:)

Prospect:

So you have no deadwood anywhere? No inefficient practices or systems? No duplication of effort? No bureaucratic inefficiencies? No chronically under-subscribed courses?

Fundraiser:

(If your institution hasn’t cut costs and your answer to all these questions is no answer of “no,” how do you then respond to these questions from the prospect?)

Prospect:

So if I give to financial aid, chances are it’s just a patch. I may help the school or some of the students with their present debt load but I’m not really making a long-term difference. Even if I give a substantial endowment for financial aid, chances are that the value of that endowment will be eroded by future tuition increases -- which seem inevitable. If I give current use dollars, I’m just eliminating or alleviating the burden of a few students. If the school doesn’t cut or contain costs for several years, I’m making no real difference. And, if people like me continue to give just to patch over the problem, does the school have any real incentive to cut or contain costs? It seems to me that if the school pledged to hold costs, maybe even cut them slowly but steadily over the next five years, you could make the case that my gifts to financial aid were closing the gap between need and ability to pay. Without that kind of commitment, giving just to stay even or to keep from losing even more ground isn’t appealing. I want to make a difference.

You see, then, why I say fundraising today must address the three Cs: cost, case and connection. If you aren’t containing costs, every case you make for private support is weakened. Philanthropy provides the margin of excellence; charity provides the margin for survival. People give far more to philanthropy than they do to charity. And, if you don’t have deep emotional ties to many prospects, you’d better have one helluva case. And, even if you do have lots of strong emotional ties to your prospects, you don’t want to weaken them by making a case that has too many holes in it.