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The Giving Gap
The Giving Gap

What can be done about the gulf between public and private institutions in alumni giving?

By Diane Webber-Thrush


Janusz Kapusta/Images.com



Christy Deardorff has seen the gulf from both sides. Now the director of annual giving at East Carolina University in Greenville, N.C., Deardorff began her career in development at her alma mater, Randolph-Macon Woman's College (now Randolph College) in Virginia. The two institutions—one public, one private—have provided Deardorff with a clear view across the gulf.

"From the time students sign their financial aid applications at Randolph, they are reminded that they are getting assistance because of alumni giving," says Deardorff. "Almost everyone qualifies for either financial aid or a scholarship. It's not hard to develop a culture of philanthropy in that context."

During Deardorff's tenure at Randolph, alumni participation in the annual fund ranged between 40 and 60 percent. The culture of philanthropy is more elusive at a large public university like ECU. But that hasn't stopped Deardorff and her colleagues from trying to build giving and alumni participation at the 27,000-student institution.

"Last year, ECU had its best fundraising year ever," says Deardorff. In the midst of a $200 million capital campaign, ECU has seen its number of donors to the annual fund increase steadily since 2006, topping 12,300 in 2008–2009. Deardorff has taken the participation rate from less than 8 percent to more than 10 percent in three years—in spite of the recession. "The response has been surprising," she says. "We were prepared to stay flat this year because of the economy. But we found that people were ready to give again."

Still, what of this gulf? Alumni participation rates of 40 percent and more are not uncommon at private baccalaureate institutions in the United States. At most publics, there is real cause for cheering when the rate peaks over 10 percent.

Researchers Peter Wylie and John Sammis document the gulf in their 2009 paper Benchmarking Lifetime Giving in Higher Education. Wylie and Sammis analyzed alumni lifetime giving rates at 81 colleges and universities: 29 publics and 52 privates. "The [differences in] giving rates between these two types of schools are striking," Wylie and Sammis report. "The top 5 percent of donors in the average private institution have given at least $3,000 lifetime; the top 5 percent of donors in the average public institution have given less than $450 lifetime."

Part of the problem is simply the math. With larger pools of alumni, public institutions face much higher costs, for instance, to send out a letter to all alumni. They also have a larger denominator when calculating participation rates. No one would scoff at 1,000 new donors to an annual fund, but at a public institution, that may be a dispiriting increase of less than 1 percent of the alumni pool. The same number of new donors at a small private institution could raise the participation rate significantly—and be cheaper to acquire, since the cost of mailing or calling the full pool of fewer alumni would be less.

So, what to do? Development professionals working at public institutions can begin by acknowledging that there are some less-than-optimum circumstances for fundraising for publics that cannot be changed. But which circumstances can be changed?

Tell it well

For Michael Westfall, the foundation executive director and vice president of university advancement at Eastern Washington University, the answer to that question, in part, is communications. The state of Washington has weathered a very dire financial storm over the past two years. In 2008–2009, EWU's scholarship program was threatened by a 24 percent hit to its endowment. In 2009–2010, an early state budget proposal would have eliminated all financial aid. Students have had two consecutive years of 14 percent tuition hikes. "We had a choice," says Westfall. "We could sit on our hands and blame the economy, or we could respond in a way that really told our story."

Westfall's team produced two YouTube videos that were e-mailed to all EWU supporters, alumni, and campus community members telling the story. The 2009 video was a direct "save our scholarships" appeal, using interviews with students, deans, and the provost. It generated $100,000 in gifts, including one anonymous $30,000 gift, and it led to EWU being included in a national story by the Associated Press on the impact of the recession on university endowments. The 2010 video, titled "Listen," is stark and dramatic, with no spoken words. Instead, students hold up handwritten signs about their reliance on scholarships and financial aid. It ends with the appeal, "You need us. We need you. Give to EWU today."

EWU created the videos in-house, using students and Westfall's designated social media staff member. "These cost me nothing other than staff time," he notes. "EWU was the first line in the AP story. That was national exposure that didn't cost me a dime."

Leadership and strategy

For Westfall and other advancement leaders at publics, a key piece of the puzzle is having a clear institutional vision and leadership that fully supports advancement. This was the starting point for Missouri State University. MSU is in the middle of a $125 million campaign and, like ECU, those efforts have yielded increased dollars, in spite of the recession. The exercise and discipline of the campaign have been clarifying in other ways, reports MSU Vice President of University Advancement Brent Dunn.

Prior to the campaign, the institution embarked upon a name change. In 2005, Southwest Missouri State became Missouri State University. "It better reflects who we are," says Dunn. "Our students are from every county in the state, 48 states in the country, and more than 80 countries in the world. We are not a regional university anymore."

In keeping with this broader identity, MSU now strives for "persistent, consistent" events in St. Louis and Kansas City, where MSU has identified significant numbers of alumni and potential donors. The university is also laying the foundation for future giving by paying special attention to the annual fund. "We've gotten very strategic with our calling program," says Melanie Earl-Replogle, director of annual funds at MSU. "We segment our list and call our best donors first. That gives us momentum that we can build on."

Earl-Replogle is also experimenting with online strategies and social media. She ran a targeted ad on Facebook that garnered 400,000 impressions for a very low cost, and she is expanding her e-mail efforts to better support the annual fund's calling and mailing initiatives.

At Bowling Green State University in Ohio, strategy is also key to building engagement during the recession. The institution has sought to align all its activities with one of four desired outcomes, says Marcia Sloan Latta, BGSU's interim vice president for advancement and president and CEO of the foundation. "We want all of our alumni programming to be intentional," says Latta. "Does it help with recruitment, image enhancement, job placement for recent graduates, or fundraising? If it doesn't fit one of those four priorities, we don't support it."

Being very strategic with resources is also important to Rosie Dale, head of annual giving at the University of Bristol in England. Universities in the U.K. are facing challenges similar to those of public institutions in the United States, as government support has waned and tuition fees have been implemented for the first time. Dale has achieved a 6 percent alumni participation rate, one of the higher annual fund rates in the country, by being very consistent with asks and by testing her messaging. The approach increased the number of donors to the Bristol annual fund by 23 percent last year.

Like many of her U.S. counterparts, Dale struggles to establish a robust culture of philanthropy for Bristol. "People in the U.K. aren't accustomed to thinking of a university as a charity," says Dale. "But I think that is changing. As more of us begin fundraising, the momentum builds."

Internal and external audiences

Rick Reiss has made the opposite journey across the gulf from ECU's Deardorff. Reiss, who is now vice president for university advancement at the private Fairleigh Dickinson University, formerly led the advancement operation at the public William Paterson University.

At both institutions, which are located in New Jersey, Reiss has focused on major giving and on getting buy-in from internal players. "Fifteen years ago, when I was just starting out at William Paterson, my mentor told me, ‘Get a big gift and get it fast.' When you do that, people see what is possible," says Reiss. "You make believers out of them."

Reiss says that buy-in from faculty members, for instance, has been critical to his success with major donors. "It's the enthusiasm of the faculty for their work that is going to convince people to give, so I need faculty to be fully engaged," says Reiss.

If internal audiences need to hear what's possible, some external audiences may need to hear what's necessary to run an institution of higher education in 2010. "We've had to educate a lot of people who think we are totally funded by the state," says MSU's Dunn. "Next year, state support will be only 30 percent of our funding. Thirty years ago, it was 80 percent of our funding."

Latta at Bowling Green cites similar numbers. In the 30 years between 1978 and 2008, BGSU saw Ohio's share of funding shrink from 68 percent to 29 percent. One-third of the student body at BGSU are first-generation college students, and the average student graduates with $28,000 in debt, Latta says. "What we do in fundraising has always been important," says Latta, "but it is critically important now."

Dunn concurs. "When we talk to alumni who are 30 years out, they say, ‘How in the world do students afford this today?' Missouri State remains a good value, but our donors need to know that so many of our programs and facilities are possible only because of private support."

Board on board

Consultant Karen Osborne, president of the Osborne Group, points to another issue that is more challenging at publics than privates: board leadership. Most private institutions have one board of trustees that is responsible for both governance and fundraising. The process of appointing these trustees is fairly straightforward. At public institutions, there are usually at least two boards: one responsible for overall governance and a foundation board for fundraising. In many states, university trustees are appointed by the governor.

"If the board of trustees gets to make all the decisions, and the foundation board is responsible for fundraising but has no seat at the table, that tension is going to prevent them from functioning well," says Osborne.

Another problem Osborne sees for public institution fundraising is low expectations for alumni giving. "It becomes a self-fulfilling prophecy," says Osborne. She notes that public institutions often point to their larger percentage of first-generation college students, immigrants, low-income students, and adult students as reasons for unsuccessful fundraising. "The belief is: This kind of student doesn't give," says Osborne. "But these students take that education, and they work themselves out of poverty, and they might end up being successful, philanthropic people who are very grateful to your school. There is no good excuse for not having all your best practices for fundraising in place."

For all the challenges that public colleges and universities face in raising private funds, none are as daunting as the basic belief that it can't be done.

"Every organization that I've ever come across says, ‘We are different. We are special. We are unique, and we have these challenges that nobody else has,'" says Osborne. "And I say, ‘It is true, and that is not a reason why you can't raise money. That's a reason why you have to do it really, really well.'"

About the Author Diane Webber-Thrush
Diane Webber-Thrush is a senior editor at CURRENTS.

 

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