The One Revenue Stream You Can Increase Mid-Year
Photo by Virginia Johnson on Unsplash
Happy New Year It’s June Already!
CFOs at traditional colleges and universities can put most of the year-end financial statements together now. Generally speaking, there are two major revenue variables in the year – fall enrollment and spring enrollment. By now, every president should know how many students transferred out over break and how many transferred in.
By and large, the numbers are set for the year, and there is only peril in ignoring the facts or relying on hope as a plan to skate by a deficit at year-end. Closely tied to enrollment numbers are auxiliary revenue streams like room and board. Those won’t change much either between now and fiscal year-end.
What do You Do if You Project a Deficit?
Adjusting your endowment spend rate is a bad option. It is easy to become addicted to higher payout percentages in a bull market only to be devoured by the bear when it returns. You may have some cohort programs – online or on campus – you could push a little harder, but enrollments there are generally stable and predictable.
There is only one revenue stream that you can adjust mid-year if you start now: Charitable Giving. With apologies to all my advancement colleagues who, like me, don’t think it is healthy long-term to put this kind of pressure on a donor pool, it is, in fact, the one revenue stream you can grow beyond budget between now and June. Here are 3 steps to do just that.
3 Steps to Take Now
Do a Progress Check: As of December 31st you should have raised at least 60% of your budget-relieving support for the year. If not, you may be behind the eight ball already. Compare this year’s progress to last year’s progress and use that to create a prospect list for Step 3.
Defer Capital and Endowment Goals: Use your remaining months of staff time and donor resources to focus on budget-relieving gifts and solicit larger than planned annual fund gifts from prospects originally slated for capital and endowment asks this year.
Create a Second Mile Challenge: Go to that one benefactor who is always there for you and ask for a challenge grant equivalent to one-half of the increase in your year-end goal. (Go now with a plan rather than waiting until June to ask for a bailout.) Use the challenge grant to motivate the larger donors in Step 2, the lapsed donors in Step 1 and to issue a second-mile challenge for donors who have already given this fiscal year.
Become a Development President
Your institution needs you to be – and your board expects you to be – a Development President. You were hired because of the vision you will inspire for your college or university. No matter your background coming into the presidency, you have to find a way to fund that vision. The broken financial model plaguing most of a disrupted industry is thwarting even the most compelling missions. Fundraising should be a strategically integrated component of a long-term strategy for financial health and should not be used as a ripcord every year. But it is the only revenue stream that can also be a ripcord.
As a Development President, be agile in moments like this to move from strategic to tactical as needed. Implementing even a short-term plan requires a plan – one that is focused, efficient and effective. There are ways, even in crisis mode, to work smarter not harder to meet short-term demands and fund your long-term vision.
If you need to work smarter, not harder NOW, call me, NOW!
In the meantime, Download: 3 Things Every College President Should Know About Fundraising.