Universities are engines at the heart of national and international prosperity. Yet they are inherently costly to run, let alone expand.
With reduced levels of public funding and increased competition both at home and from overseas, universities must work harder than ever to find the resources to support world-leading research and teaching.
With intense pressure on funding, income diversification is an important strategic driver in helping universities become more financially sustainable. Diversification can take many forms:
Exploitation of intellectual property,
Research and teaching contracts (including student fees),
Revenue generation from estates and conferencing,
Philanthropy in higher education is not new. Many great educational institutions were founded on the philanthropy of church leaders, royalty and farsighted patrons.
In recent history, although many governments have provided significant funding to educational institutions around the world, the income from private philanthropic sources (individuals, trusts or foundations, corporations, etc.) is an increasingly significant – and needed – component of the funding mix.
Philanthropic income is particularly useful in these ways:
It provides flexible income to support the projects and activities that shrinking core funding cannot finance,
It enables universities to build upon their strengths, enhance their student experience, extend their research programmes and create the best possible environments within which people can excel and
It builds networks of friends and supporters who contribute to the long-term well-being of the university in many ways beyond their financial contribution, e.g., acting as ambassadors, providing links with industry and mentoring current students.
Fundraising in the context of the higher education sector can be challenging. The complex activities of universities can be difficult to communicate to a wide range of audiences, and some people do not perceive universities as ‘causes’ – especially in countries with a history of strong public funding for higher education.
Fundraising professionals need to break down misconceptions about how universities are funded. Fundraising is an opportunity not only to raise financial resources but also to communicate both the purpose and importance of universities in the world and the impact they have on all our lives – not just the people who study and research within them.
It may be helpful for institution leaders and the development director to discuss (or even document) their viewpoint of why it is valuable to raise private, philanthropic funds for their institution. This conversation will help in creating a few key talking points when ‘making the case’ to prospects and others at the institution.
University of Cambridge Prof. Robert G. Edwards, winner of the Nobel Prize in Physiology or Medicine, was unable to secure funding to push forward his pioneering research on in vitro fertilisation until a private donor stepped forward and offered to help.
The term advancement encompasses alumni relations, communications, development, marketing and allied areas as described in this detailed definition by CASE.
Whilst the focus of this resource is development and fundraising activities, the link with alumni relations is integral (and often a part of the same department). It demands significant attention when thinking about your start-up activities, vision and strategy and about how you make your case.
Without strong alumni relations, your prospect pool will be significantly reduced and your chances of significant fundraising success compromised. Alumni have the potential to be your most loyal and generous supporters.
What Is an Alumnus?
It is important for your institution to decide how it defines an alumnus and to document this to avoid any confusion.
The classic definition of alumnus is a graduate or former student of a specific school, college or university. Different institutions develop their own definitions of what alumnus means
Some restrict the term to graduates.
Others widen the definition to include all former students (even those who failed to finish), retired staff and other associates.
Why Is Alumni Relations Important?
In the past, alumni relations, or engagement, tended to be treated as a stand-alone activity divorced from fundraising and other advancement activities. Indeed, some alumni associations were entirely independent of their parent institutions, and whilst their members interacted with each other, they had very little interaction with the institution.
Today, alumni relations is an important part of an institution's advancement activities for many reasons:
Alumni are an institution's most loyal supporters.
Alumni are fundraising prospects.
Alumni generate invaluable word-of-mouth marketing among their social and professional networks.
By engaging alumni, an institution can continue to benefit from their skills and experience.
Alumni are great role models for current students and are often well placed to offer practical support to students as they start their careers.
Alumni are often in the position to engage the expertise of the institution in their professional lives.
Your alumni are your international ambassadors. They take their knowledge of your institution to their hometowns and countries and into their professional and social networks.
Maintaining a positive relationship with your alumni means that the messages they share about your institution will also be positive – and current.
If the relationship between your alumni and your institution stalls when they leave campus, their knowledge of your activities and achievements will no longer evolve. The messages they will share with people will be out-of-date and could reflect poorly on the progress your institution has since achieved.
Maintaining communication channels with alumni means you can keep them informed of your achievements and make them part of your institution's future, not just its past.
Good alumni relations benefits alumni as well as the institution. If you support your alumni in their professional and personal lives through activities such as the facilitation of social and professional networks, preferential access to on-campus expertise and facilities and negotiated benefits with third-party suppliers, they are likely to be your loyal life-long supporters. Your support may also help your alumni achieve positions of success and influence, which will in turn benefit your institution as they begin to give back.
By helping the institution become bigger, stronger and more successful, alumni are also enhancing the value of their own degree qualification.
Alumni as Prospects
All alumni are fundraising prospects. They are the most likely group to give (if the institution has done its job right), as alumni should have a sense of gratitude and want their institution to succeed.
A strong link between alumni relations and fundraising will enable you to spot alumni who have the capacity and inclination to make significant gifts. It will also enable you to effectively segment the majority of alumni who might only give smaller amounts so that you can match them to the ask that has the highest likelihood of success.
Don't Be Overprotective
It is tempting to keep close control over your alumni and funnel all contact with them through the development or advancement office, but this can have negative consequences. The capacity of the office to deal with alumni contact might be overwhelmed, frustrating the alumni who want to get in touch. A bond between an alumnus and the institution that is focused on a single point will be weaker than a bond focused on multiple points.
Good alumni relations should be flexible enough to allow an alumnus to maintain a positive link, not only with the office, but also with his old tutor, former football coach, careers adviser and any number of his peer group. This broader network experience is far more enriching both for the individual alumnus and the institution.
The trick is to be aware of these links, capture the information and make sure these interactions are recognized as a part of the overall donor cultivation process (as multiple links are a strong indication of an individual's favour toward the institution and probability to give).
Define alumnus for your institution – and document that definition.
Outline a few key ways in which you are maintaining positive relationships with your alumni (in partnership with other departments).
Outline in your fundraising strategy how you would like to focus the support of your alumni (in partnership with other departments).
Traditionally, the masculine plural noun has been used when referring to both genders, though groups consisting of both males and females can also be referred to as alumni/alumnae or the alumni and alumnae of our institution.
Alum is an informal term that is occasionally used to describe an alumnus or alumna, often when the gender of the person is unknown.
You have recruited a new director of development, given her a budget and desk and convinced your senior management that all this investment is worthwhile. What more is required of you, and what can you reasonably expect in return?
It Will Take a While
Philanthropic income will not begin to pour into the institution from day one. It takes a considerable length of time to identify, cultivate and solicit donors, whether they are giving small amounts on a regular basis or making major donations.
Like many fledgling businesses, your new development office may take up to three years to generate a return on your investment. That said, you may enjoy some modest ‘early wins' from prospective donors who are already committed to and engaged with the institution and who have been waiting to be asked.
You may be keen to set fundraising targets from the outset, but you need to appreciate that your development director will first need to investigate the fundraising potential of your prospect pool. Without some preliminary research, fundraising targets based on need rather than potential will be meaningless at best, and if they discourage long-term approaches, they may even be detrimental.
In the beginning it can be better to focus on activity rather than income when assessing performance - even when there has been success in securing gift income.
Leadership Is Vital for Success
History has shown that, without support from their institution's leadership, development offices are likely to fail.
You should expect to lead by example by setting a strong vision, spending considerable time with prospects and donors to support the director of development and even becoming a donor yourself. You need to encourage other senior staff to follow suit.
Development Is a Team Effort
Development activities are not confined to the development office but demand the expertise and commitment of staff across the institution, notably the finance office, careers office, international office, senior academics and the estates development staff.
You May Face Criticism
Some people believe that higher education should be publicly funded and that asking for donations is akin to begging. This criticism may emerge both from colleagues within the institution and from external contacts.
You must be prepared to spend time educating people about the value of philanthropy in higher education and developing a supportive culture.
Not Everyone Will Say ‘Yes’
Fundraising includes a level of unpredictability, and you can minimize uncertainty through diligent prospect research and cultivation before solicitation, but there will still be occasions when, despite all the positive signs, a prospect says ‘no’.
You must be able to handle these disappointments gracefully, take time to understand why the answer was a ‘no’, determine if the answer is really ‘not now’ and remain positively focused on the many who will say ‘yes’.
You Will Need to Identify Fundraising Projects
Fundraisers can only raise funds if they have projects for which to fundraise.
Donors who will support an organisation with unrestricted funds are rare. Most donors want to be inspired to donate to something tangible (or at least have a tangible example of what their gift equates to, even if providing unrestricted funds).
You will need to set time aside to decide what these projects will be and to ensure that they align with your overarching institutional priorities whilst being attractive to donors.
It is not the job of fundraisers to decide what to fundraise for. They may have views about what projects donors are more likely to support (and you may get valuable feedback from current supporters), but it is ultimately the decision of the institutional leadership to prioritise which faculties and projects will receive what resources.
You might find it useful to talk to the leaders of comparable institutions to benchmark your expectations.
As you get started, outline your specific expectations.
Get feedback on these expectations from a peer.
Review and revise often during the start-up phase.
The culture of philanthropy in higher education is still maturing in many countries, but some people maintain reservations about its appropriateness and value for the sector. Here are some common concerns and how they might be addressed.
Surely it is the government’s role to fund higher education.
Higher education has always been funded from a variety of sources: government, industry, student fees, commercial activities and philanthropy all play a part. Philanthropy in higher education is not new; indeed, many universities were founded on the philanthropy of education visionaries.
Yes, governments have a continuing role, but it is unwise to ignore the additional funding that can be secured. This additional income enables higher education to achieve great things both in education and in research that make a difference to the lives of us all.
Philanthropic income is not a replacement for government investment but an additional force for good. One U.S. public university states it succinctly: ‘Fundraising enables us to provide the taxpayer with a better university than they could otherwise afford’.
Isn’t fundraising just another form of begging?
It is misguided to equate fundraising in higher education with holding out a begging bowl. Begging is born of desperation and poverty in the recipient, prompting pity in the giver. Fundraising, by contrast, emanates from a position of strength, vision and aspiration in the asker, which is matched with passion on the part of the giver.
A good fundraising experience is one that benefits both the recipient and the donor. The recipient receives the funds needed to achieve its institutional goals, and the donor gets a sense of satisfaction from doing something good and the chance to further a cause in which he believes.
Fundraising partnerships tend to be long-lasting and aimed at achieving jointly held goals. A donor who wishes to see the suffering of cancer patients alleviated will take great satisfaction in donating to a research programme that is designed to achieve that goal. The donor has the capacity to give; the recipient has the expertise to fulfill the donor’s desire to help cancer sufferers. This is not begging: it is a mutually beneficial arrangement. ‘Begging’ must be treated like a four-letter word. Banish it from your institution.
We will never make enough money to cover our fundraising costs, let alone make a difference to the institution.
Since it began in 2001, the UK-based Ross-CASE Survey has shown an increase in both the number of donor numbers and the value of their gifts. In 2010–2011, the survey showed that:
Cash income received by universities in 2010–11 increased by £43 million (from £517 million to £560 million),
New funds secured (new cash gifts, pledges and gifts in-kind) increased from £608 million to £693 million and
The number of donors reached an all-time high of 204,250 (up from 184,945 in 2009/2010).
Yes, fundraising has costs associated with it, and an effective development office needs to be properly resourced. However, the median cost per pound of funds raised is actually decreasing as higher education institutes successfully demonstrate to donors that they are a worthwhile cause. For example:
In 2007–2008, the median cost per £1 raised was £0.32.
This fell to £0.27 in 2008–2009, and again, to £0.22, in 2009–2010.
That cost was maintained at £0.22 in 2010–2011.
The money raised for higher education has funded buildings, scholarships, research, academic staff, student experience projects, environmental projects and countless other innovative projects. The income vastly outweighed the costs, and the difference it made was significant.
Not only do donors come with much-needed funds, they also bring their personal support, access to their professional and social networks and an enthusiasm for the goals of higher education that enriches the sector.
Higher education isn’t a ‘cause’.
Some would argue that higher education is not a ‘cause’ as it does not distribute food to the needy or offer protection to the vulnerable, but a ‘cause’ can be thought of in a more complex way.
Higher education is important to the health and prosperity of the world.
Its institutions educate people who will leave to become engineers, teachers, doctors and other professionals whose work will make a difference to the lives of many.
These institutions also provide the research to support everything from medical breakthroughs to the discovery of new energy sources.
Higher education enriches our cultural and artistic lives.
Most of the world’s significant innovations can be traced back to a university.
Finally, higher education asks questions of governments, industries and other powerful bodies, examining their effectiveness, veracity and purpose and challenging them to always do better.
Higher education is a force for good on so many fronts that it is not just one ‘cause’ but many, and people who are asked to support it should see their donations, not as an act of charity, but as an act of philanthropy.
This may work for elite institutions in the United States, but not here.
When UK universities started to invest in fundraising, many people within academia doubted that it would work. It was common to hear people complain, ‘This is not America, you know! It may work in the United States, but not here in the UK’.
Today, most UK universities have a development office, and those that have invested in this effort properly over a number of years are proving to be very successful.
It is now common to hear people in other countries say, ‘It may work in the UK, but it can’t work here’. With courage, conviction and creativity, universities around the world are now demonstrating that with just a little adaptation, fundraising can work in their context, too.
We don’t have a culture of giving.
Similarly, it is common to hear people complain that there is ‘no culture of giving’ in their country. There are very few places in the world where this statement is entirely true. What is often actually meant, and what may be true, is that there is no culture of giving to education.
Professor Eric Thomas, vice-chancellor of the University of Bristol, chaired the UK Government’s Task Force on Increasing Voluntary Giving to Higher Education. He and his colleagues encountered this view repeatedly during their research. However, in the task force’s 2004 report, Thomas noted that the underlying issue was that within many universities, there was no culture of asking.
The Ross-CASE survey has charted year-on-year rises in the total number of donors making a gift to a UK university. As universities become more skilled in asking for gifts, a culture of giving to education is now beginning to emerge.
My gift is too small to make a difference.
When hearing about very large gifts to an institution or large fundraising targets for capital projects, some people might feel that the modest level at which they can make a gift is insignificant and can’t possibly make a difference.
It is important to emphasise that every gift is important and valued and to find opportunities for gifts at all levels to make a tangible difference. Smaller gifts are often directed at things like scholarships, student support, books for the library and so on, which are not commonly funded by large gifts. When used in this way, even small gifts make a positive impact.
This concern for the significance of one’s own personal giving can also be turned into a positive response by suggesting that the individual ask friends and former classmates to join him or her in supporting the institution and that together they can achieve something quite remarkable.
List the concerns you think you might encounter in your own context and prepare your rebuttals.
Make sure you share your list with senior colleagues and others involved in development that might also be questioned about your institution’s commitment to development.
Learning from the experiences of others is invaluable.
CASE has supported numerous institutions as they have established development office. By being a part of CASE, you can come into contact with institutions comparable to yours that are willing to share their experiences.
This section details some fundamental lessons these offices have learnt during their first years of operation.
Know What You Have to Work With
The foundation of realistic expectations and good planning is an awareness of your starting position. You need to know what you have to work with to achieve your goals and where the gaps are. Stand back, take a long, hard look at your institution and ask yourself these questions:
Do you know what you will be fundraising for and why?
Do you have sufficient contactable prospects to approach?
Do you have the backing of your colleagues?
Do you have the procedures and policies in place to provide a stable backdrop for fundraising?
Do you have a database and data?
Where do you need to target your investment?
Know What You Want to Achieve – and Be Realistic
You need to know why you are fundraising. It is important to keep long-term goals in mind that are integrated into the overall strategic plan for the institution. These goals must be realistic and carefully articulated, as they will form the foundation of your plans.
Don’t Rush into Things
Spend sufficient time planning and establishing the resources you will need to be successful at fundraising. You will need data, a database, some analysis and research of this data before you can properly begin to identify whom you will approach for support.
It is a myth that the more fundraisers you hire, the more income you will raise. Recruiting a fundraiser is not often the first step you need to take, as he or she will have no platform to fundraise from and nothing to fundraise for unless you have taken the time to assess, strategise, prioritise and put the basics in place.
Embed Awareness of Fundraising into Your Institution
Effective development work is a team effort. Your development strategy should be integrated into your overall advancement strategy and align with the institution’s larger goals.
Staff members from every department across the institution need to be thinking about fundraising, integrating it into their long-term plans and working with the development office to take action.
Take a Long-term, Realistic View
You might be lucky and secure a few gifts in the early days from donors who seem to have been waiting in the wings to be asked. Do not be lulled into thinking that this is an indication of how things will continue.
Fundraising is hard work and time-consuming. It typically takes one to two years for a major gift to come to fruition and several years before a substantial income stream is established. Although you should prioritise ‘low-hanging fruit’, do not be tempted to compare your progress with that of other institutions unless they are of comparable standing. Such comparisons are false and disheartening.
As your development activity grows and its success gains momentum and scale, keep things going by investing wisely and at the right moments. Tardy or insufficient investment can create a stop-start effect that stifles progress by stalling momentum. Be proportionate in your investment – it must reflect success and the relative size of the institution.
Work Out How You Will Measure Success
One of the first things you need to decide is how you will measure your success. This extends beyond income levels and covers indicators such as number of addressable alumni or number of visits to donors. Set targets against these indicators, but make sure they are realistic.
If you secure a significant donation, celebrate it loudly and often while thanking all those involved in the process – even if their role was minimal. Such recognition makes the donor feel appreciated, helps win the support and co-operation of colleagues and inspires other donors.
Celebrations should not be confined to campus but should also publicised externally to show the world that you are actively seeking funds and can use them wisely.
Note: Always ask a donor about sharing his or her name before publicising externally.
Strong Leadership Is Essential
Development work needs the vision, endorsement and involvement of the institution’s leadership in order to be successful. Without it, the effort will lack credibility and fail.
Directors of development need to use the time of their senior leaders wisely. Senior staff members need to lead by example and become supporters of their institution or they may lack credibility when asking donors to support.
There is a very technical aspect of fundraising that covers law, accountancy and tax and ethics. Be professional in your approach to these and become expert in how they relate to philanthropy.
Your professionalism will be reassuring to donors and help you to maintain control of your development activities. Do not bluff or guess. If you don’t know, tell a donor you will find out, and then follow up promptly.
Establish a Pipeline
Invest in your current students (they will be your supporters in the future), and make sure a gift of any size is appreciated as a valuable contribution. Growth is dependent on having a pipeline of prospects and donors. Establish a ladder of giving opportunities, which donors can move up. Many regular or large gifts started as one-off small gifts.
Above all, you will need to be persistent, resilient, optimistic and resourceful.
As you set up your development office refer regularly to this list of lessons learned to maintain an objective focus.
Continue to refer to this list as you review your strategy during the start-up years.
Networking with peers and keeping abreast of advancement trends and philanthropy trends through organisations such as CASE can be helpful in keeping your expectations, goals and strategies relevant.
Fundraising is not an exact science. What works at one institution may fail at another. You will need to adapt and modify your practice to suit the individual characteristics, resources and audiences of your institution.
If you are in a start-up situation then do not be daunted by the success stories you hear from other institutions – the millions they have raised and the number of alumni they are engaged with. Instead, listen to how they achieved their success and consider how their activities might be adapted to your own institution.
You may hear their stories less often, but many institutions have suffered setbacks and failures. Listen to these stories and learn from their mistakes as well.
Organisations like CASE can help you find institutions that have a profile similar to your own. They can also broker an introduction to a more experienced director of development, who would be happy to share his or her experiences with you. Opportunities like the annual CASE conference are great places to hear about the experiences of others and to share your own experiences.
One Size Doesn’t Fit All
The scale of activities must be proportionate to the size of your institution.
You cannot expect to immediately be up and running with multiple fundraising and communication channels. You need to roll out activities in a carefully considered manner, constantly reviewing and tweaking them until you find the right formula for your institution and stakeholders.
Listen to your stakeholders and develop an awareness of their attitudes around fundraising. It is likely that you will have to spend some time educating and engaging them before you can begin a fundraising campaign.
If you try to do too much too soon you will fail, as you will not only alienate your potential supporters, but you will spread your resources too thin.
Testing out new fundraising materials, fundraising activities or alumni services can be a great way of evolving an activity that will produce the optimal results for your institution. It is also a way of engaging your stakeholders in development efforts.
Know Your Context
Where you are fundraising can make a real difference to how you fundraise. How you ask a prospect for a major gift in the UK is likely to be very different from the process you would follow in Singapore or Kenya.
Attitudes toward philanthropy, money and being ‘asked’ can vary significantly among cultures. You need to amend your practice according to where it is being applied and respect cultural differences.
That said, the basic premise of identification, cultivation, solicitation and stewardship is universal. It is the application of these basic tenets that needs adaptation.
After you outline your basic strategies and processes, make sure these are adapted for the individual characteristics, resources, audiences and cultural context of your institution.
Prioritise activities. Determine which are the most relevant and feasible to generate some initial success, which can be scaled down to ‘test’ the idea and scale up later and which can wait for year two or three.
Find an industry partner outside your institution to have as a resource and offer a fresh perspective.
Instead of sending an e-newsletter or appeal to all 30,000 of your alumni the first time, send it to 1,000 and see what response you get. Then choose a manageable number to follow up with, and call to hear how your alumni are responding to the piece. Did they receive the piece? Was this helpful information? What would they like to know more about? What would they alter? Then tweak your future communications or activities accordingly.
Please note that the term advancement is often used when talking about fundraising in an educational context. As defined by CASE, the term encompasses alumni relations, communications, fundraising, marketing and allied areas.
Whilst this resource touches on all areas of advancement, its primary focus is on fundraising, or development. The terms development office and development director have been adopted to reflect this approach.
Many institutions have broad-based advancement offices, and the CASE website provides in-depth guidance on the wider aspects of advancement, including alumni relations, communications and marketing.