My wife recently participated in the Susan G. Komen 3-Day Race for the Cure (of breast cancer). The popularity and success of this event, which is staged at different times in different cities across the country, can be attributed to way it taps into the deep roots of American philanthropic culture. In particular, the event works because it:
1. Defines common cause ("race" underscores the urgency while "cure" defines the purpose; an audacious goal stated in clear and simple terms);
2. Promotes community (the event attracts thousands of walkers who trek together over three days, ultimately traversing 60 miles, bonding with each other as they go and with the many well-wishers who line the route and offer their encouragements);
3. Encourages individual expression (with walkers donning all sorts of costumes and get-ups, and coming up with names that incorporate or pun on "breast" or its more colorful synonyms, and, yet, it is e pluribus unum -- "out of many, one" at its best);
4. Requires a significant investment of time and effort (walkers are required to raise a minimum of $2300 and walk 60 miles but they get so much out of it precisely because they put so much in);
5. Makes effective use of symbol and ritual (there's an opening and closing ceremony for the walkers, a ritual beginning and end; in the closing ceremony the walkers enter a large circular enclosure while the "inner circle" is reserved for the cancer survivors; for many of those survivors, crossing the finish line brings closure to their struggle; they "made it" with the help of family and friends);
6. Combines solemnity with celebration (many walkers carry "in memorium" messages of love ones they have lost, as do the well-wishers along the way but they also celebrate those who survived; the celebration of life exists side by side with the sorrow of loss).
These six success factors serve as a check list for all philanthropy-seeking organizations who wish to find the way to strike the most resonant cultural chords. As you evaluate your messages, events and other channels of communication, ask yourself how well you stack up against this criteria.
Tuesday, December 1, 2009
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.
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.
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?”
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?”
Sunday, October 25, 2009
A Cultural Shift?
A friend and colleague wrote last week to share her concerns and invite my reaction. She reported “seeing an alarming trend” in the attitudes manifested by “pipeline” prospects, age 40-50. There is, she says, “so much quid pro quo among this next generation of donors.” Increasingly she is asked by these prospects if she can get their son or daughter, or even a neighbor, admitted or get better football tickets or even secure an introduction to another prominent alumnus for business purposes. “This worries me,” she says, “and makes me think a lot about the messages we will need to deliver to hopefully capture this crew at some tipping point in the future. You think a lot about the history and power of philanthropy and how it has changed and shaped our nation in so many fabulous ways. Do you think we are nearing a change in the fundamental concept that has made us great?”
It’s a huge and terribly important question. I don’t know if we are nearing a fundamental cultural shift in our outlook on and practice of philanthropy but I have worried about, and written and spoken about it for some time. I have pointed out that Americans have engaged in an unprecedented and unparalleled voluntary transfer of wealth over more than two centuries. I have characterized it as “the American Philanthropic Revolution” and argued that the good done by it has greatly advanced the ideals borne of the American Revolution and mitigated the prospects of violent social upheavals. In addition, I have explained that the origins of this remarkable philanthropic spirit can be traced back to our earliest roots, to the creation of communal constructs designed to yield civic and social improvements, and that we operated as “we the people” long before that phrase was coined in the preamble of the Constitution. And, when visitors from foreign universities came to me seeking to understand and export American fund-raising techniques, I took pains to point out we owed our success much more to the culture than the tactics of fund-raising. In my seminars and conferences, I say that I and other highly-experienced practitioners could take everything we have learned over decades to another country and not enjoy anything close to the success that we enjoy in this one. So, I have asked myself over the years and now ask openly at the outset of my seminars, why is it that so much of our training focuses on the application of technique and so little on achieving a deeper understanding of the culture that allows it to work.
To me the American philanthropic culture is a like a remarkably rich soil from which many wonderful things have grown, and will continue to if we don’t take more from it than we give back. Widespread fund raising practices that employ hard-sell, short-term, sometimes exploitative tactics slowly leeches our philanthropic soil of the nutrient of good will. Incessant fund raising in pursuit of “more, more, more” robs the soil of the nutrient of trust if those asking do not have a well-thought-out plan to actually do more as efficiently and effectively as possible. And so it goes. Everything selfish and short-term that we do, everything that is inefficient and ill-conceived, depletes the soil that has given us so much. To my friend’s question, I have to ask, “To what extent has the growth of technique-oriented fund raising operations created a jaded consumer?” What if that quid-pro-quo prospect pushes back and says, “If you’ve turned philanthropy into an entitled, incessant clamor for what you want, why shouldn’t I clamor for what I want?” or “If I can’t really see the difference my dollars make (unless I give you millions), why shouldn’t I try to get something out it?” or “How can you fault me for linking my giving to better football seats when your athletic department predicates its fund raising on it?”
If we see Americans becoming more selfish, short-term or demanding in the way they give, we should not only ask if the culture is changing but if we have contributed to change. Change begins with us, the practitioners of philanthropy.
In my next blog post, I will speak to the ways that we can replenish the American philanthropic soil. In the meantime, I invite your comments? Am I being too hard on us? Are we seeing a cultural shift toward more quid pro quo giving and away from selfless philanthropy and, if so, what can we do about it?
It’s a huge and terribly important question. I don’t know if we are nearing a fundamental cultural shift in our outlook on and practice of philanthropy but I have worried about, and written and spoken about it for some time. I have pointed out that Americans have engaged in an unprecedented and unparalleled voluntary transfer of wealth over more than two centuries. I have characterized it as “the American Philanthropic Revolution” and argued that the good done by it has greatly advanced the ideals borne of the American Revolution and mitigated the prospects of violent social upheavals. In addition, I have explained that the origins of this remarkable philanthropic spirit can be traced back to our earliest roots, to the creation of communal constructs designed to yield civic and social improvements, and that we operated as “we the people” long before that phrase was coined in the preamble of the Constitution. And, when visitors from foreign universities came to me seeking to understand and export American fund-raising techniques, I took pains to point out we owed our success much more to the culture than the tactics of fund-raising. In my seminars and conferences, I say that I and other highly-experienced practitioners could take everything we have learned over decades to another country and not enjoy anything close to the success that we enjoy in this one. So, I have asked myself over the years and now ask openly at the outset of my seminars, why is it that so much of our training focuses on the application of technique and so little on achieving a deeper understanding of the culture that allows it to work.
To me the American philanthropic culture is a like a remarkably rich soil from which many wonderful things have grown, and will continue to if we don’t take more from it than we give back. Widespread fund raising practices that employ hard-sell, short-term, sometimes exploitative tactics slowly leeches our philanthropic soil of the nutrient of good will. Incessant fund raising in pursuit of “more, more, more” robs the soil of the nutrient of trust if those asking do not have a well-thought-out plan to actually do more as efficiently and effectively as possible. And so it goes. Everything selfish and short-term that we do, everything that is inefficient and ill-conceived, depletes the soil that has given us so much. To my friend’s question, I have to ask, “To what extent has the growth of technique-oriented fund raising operations created a jaded consumer?” What if that quid-pro-quo prospect pushes back and says, “If you’ve turned philanthropy into an entitled, incessant clamor for what you want, why shouldn’t I clamor for what I want?” or “If I can’t really see the difference my dollars make (unless I give you millions), why shouldn’t I try to get something out it?” or “How can you fault me for linking my giving to better football seats when your athletic department predicates its fund raising on it?”
If we see Americans becoming more selfish, short-term or demanding in the way they give, we should not only ask if the culture is changing but if we have contributed to change. Change begins with us, the practitioners of philanthropy.
In my next blog post, I will speak to the ways that we can replenish the American philanthropic soil. In the meantime, I invite your comments? Am I being too hard on us? Are we seeing a cultural shift toward more quid pro quo giving and away from selfless philanthropy and, if so, what can we do about it?
Tuesday, October 20, 2009
Reflections From the Field
I had a number of interactions with donors last week which seemed to provide larger lessons about the changing nature of philanthropy.
The first was with a young donor who had pledged a million dollars earlier in the year. The night before I was to meet with him, I read my research brief and was struck once again by how generous a gift it was from one so young. Then I began to wonder, "Is he the youngest person ever to have given a gift of this size to Georgetown?" I sent an e-mail note to my research director asking her to check and, sure enough, he was. That important distinction had not been noted at any previous point. When I sat down to the dinner the next day with that donor, I was able to share the news in the form of a toast. Yes, we have been fortunate enough to receive million dollar gifts from a good number of donors but his gift was unique. Putting it in the perspective of our 220-year history helped him understand just how truly remarkable it was and, therefore, why it was particularly valued. It's important to look for those kinds of distinctions and, if at all possible, celebrate something unique about every major gift, not just lump all of them into one category or giving society. Looking for distinctions within categories -- whether it is the first to give to an important new initiative , the youngest to give at a particular level, giving in proportion to one's means, or giving in someone else's name -- is an important element of effective stewardship and good donor relations.
The second was with a prospect who had become intrigued by a phrase in our President's vision statement --"to produce leaders who make a disproportionate difference in the world." This donor thought that goal was quite important and was considering a million dollar pledge in support of it but he wanted to know how we proposed to identify those potential leaders. He believed that those who would make a disproportionate difference in the world were likely to have overcome
disproportionate adversity or taken on a disproportionate challenge early in life. If we simply looked for the same old criteria -- very good grades, high board scores and evidence of leadership -- we might miss some very unusual talents or late bloomers, he argued. This prospect was seizing on a key element of our vision statement and challenging us to challenge our own assumptions about how we might get there. Being able to say where an institution is going and why is essential to building philanthropic support but, increasingly, we must be prepared to show how we propose to achieve our goals and to consider innovative means of getting there. Every element of a vision must be backed up with a set of specifics to show how that goal is to be reached, and we must be willing to incorporate different ideas from different donors on the best way of achieving it.
The third was a prospect who liked the idea we had put to him, that of underwriting a distinguished speaker series in one of our schools, but he questioned if we really needed the endowment we were asking for. He wanted to see how we came to that number, including how much the school had spent on distinguished speakers in the past two years (including travel, lodging, security, etc.). He suggested we should carefully calculate those annual costs and then ask for an endowment gift that was twenty times that amount not just pull a nice round endowment number out of the air. When I asked the development officer in that school for the supporting budgetary material, he confessed that the proposal was more "concept-based" than "budget-based." My advice to him and to all of us is that all future proposals, especially when we are seeking commitments, must be budget-based.
Our everyday interactions with donors provide any number of insights into where the world is going and how philanthropic patterns are changing. If we listen, respect and adjust, we'll keep up and maybe even stay ahead.
The first was with a young donor who had pledged a million dollars earlier in the year. The night before I was to meet with him, I read my research brief and was struck once again by how generous a gift it was from one so young. Then I began to wonder, "Is he the youngest person ever to have given a gift of this size to Georgetown?" I sent an e-mail note to my research director asking her to check and, sure enough, he was. That important distinction had not been noted at any previous point. When I sat down to the dinner the next day with that donor, I was able to share the news in the form of a toast. Yes, we have been fortunate enough to receive million dollar gifts from a good number of donors but his gift was unique. Putting it in the perspective of our 220-year history helped him understand just how truly remarkable it was and, therefore, why it was particularly valued. It's important to look for those kinds of distinctions and, if at all possible, celebrate something unique about every major gift, not just lump all of them into one category or giving society. Looking for distinctions within categories -- whether it is the first to give to an important new initiative , the youngest to give at a particular level, giving in proportion to one's means, or giving in someone else's name -- is an important element of effective stewardship and good donor relations.
The second was with a prospect who had become intrigued by a phrase in our President's vision statement --"to produce leaders who make a disproportionate difference in the world." This donor thought that goal was quite important and was considering a million dollar pledge in support of it but he wanted to know how we proposed to identify those potential leaders. He believed that those who would make a disproportionate difference in the world were likely to have overcome
disproportionate adversity or taken on a disproportionate challenge early in life. If we simply looked for the same old criteria -- very good grades, high board scores and evidence of leadership -- we might miss some very unusual talents or late bloomers, he argued. This prospect was seizing on a key element of our vision statement and challenging us to challenge our own assumptions about how we might get there. Being able to say where an institution is going and why is essential to building philanthropic support but, increasingly, we must be prepared to show how we propose to achieve our goals and to consider innovative means of getting there. Every element of a vision must be backed up with a set of specifics to show how that goal is to be reached, and we must be willing to incorporate different ideas from different donors on the best way of achieving it.
The third was a prospect who liked the idea we had put to him, that of underwriting a distinguished speaker series in one of our schools, but he questioned if we really needed the endowment we were asking for. He wanted to see how we came to that number, including how much the school had spent on distinguished speakers in the past two years (including travel, lodging, security, etc.). He suggested we should carefully calculate those annual costs and then ask for an endowment gift that was twenty times that amount not just pull a nice round endowment number out of the air. When I asked the development officer in that school for the supporting budgetary material, he confessed that the proposal was more "concept-based" than "budget-based." My advice to him and to all of us is that all future proposals, especially when we are seeking commitments, must be budget-based.
Our everyday interactions with donors provide any number of insights into where the world is going and how philanthropic patterns are changing. If we listen, respect and adjust, we'll keep up and maybe even stay ahead.
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.
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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