Deliver Prosperity to Avoid Austerity — The Development President

Why Now Is Not the Time to Cut University Foundation Budgets

With public health expenses soaring and tax revenues shrinking, state funding for universities is at least as imperiled as it was during the Great Recession. With unpredictable enrollment and rising technology and professional development costs, many universities have already initiated austerity plans using all tools at their disposal, from furloughs to program elimination.

When it comes to reducing expenses, higher education is notorious for making quick across-the-board cuts that lack strategic intent.

Despite their corporate independence, some foundations are reliant on university budgets for salaries and operations. Even if completely independent, university norms and expectations often shame foundation CEOs into “doing their part.”

Here’s three reasons why that’s a bad idea, especially now:

Most university revenue streams are strangled. State funding will be reduced, athletics gate receipts are almost nonexistent, students’ ability to pay is decreasing, and net auxiliary revenues are either mothballed with empty residence halls or overextended by expensive health safety accommodations.
Fundraising ROI remains virtually unchanged. The asset donors who can make the biggest difference when the university needs it most are still able to give. As of the end of September, the Dow had climbed back to last year’s value.
Alumni need their universities in new and demanding ways. Navigating this troubled economy, recent grads, especially, will pressure alumni engagement programs to transform into alumni empowerment programs, featuring reskilling, strategic networking, and personal branding.

Foundation CEOs should also look internally to be sure they are credibly making the case by restructuring major and principal gift programs to run as efficiently and productively as possible, by systematizing annual giving using the latest technology, and by reducing “friend-raising” activities in favor of efforts that yield direct financial results.

Cutting foundation budgets right now may be one of the least strategic moves a university could make. Charitable giving constitutes the one revenue stream that can grow midyear and that, so far, has demonstrated some level of immunity to the pandemic.

When you are ready to invest in fundraisng for maximum return, call me.

In the meantime, Download: 3 Things Every College President Should Know About Fundraising.

…and please share this post with another current or aspiring Development President!

With over 25 years of education leadership experience, B. David Rowe is the interim president of Lancaster Theological Seminary and the immediate past president of Centenary College of Louisiana and of Lake Highland Preparatory School. Having held held senior level positions in university advancement and strategic planning, he currently advises college leaders and trustees as the Innovation and Transformation practice leader for the Association of Governing Boards and as principal consultant at The Development President.