3 Results Boards and Presidents Can Expect From Advancement This Year

Photo by Frans Vledder on Unsplash

Renew, Re-Engage and Raise the Bar

Apart from counting noses at orientation, the jury is in. Enrollment is pretty much set for the fall. That budget the board approved in April likely needs to be adjusted now to reflect new realities.

Many colleges and universities spent the summer trying to figure out what to do with excess plexiglass dividers while realizing the emergency federal relief will all be counted in last year’s totals. The schools that didn’t blow through the assistance with uncontrolled costs may have some cash reserves to lean on, but the revenue and expenditure story this year is looking much like it did pre-pandemic – if not worse.

With inflated discount rates and re-set expectations for how much a single room will cost, student-generated revenue will not rebound as quickly as masks come off. This will put added pressure on two revenue streams that always seem to jump off the page this time of year – fundraising and endowment spend.

Leave endowment spend alone. Follow your policy. If you have had good discipline of keeping that spend rate at or below 5% of a three- or five-year rolling average, don’t stop now. The market was up in 2007 too, and many schools were overdrawing their endowments before the crash. This left previously over-subsidized budgets woefully underfunded for the next five years.  Don’t make the same mistake now.

While you want to keep your endowment spend rate low, colleges and universities should be looking for higher gift levels this year. Frontload efforts in the fall as asset donors start hedging their bets against the possibility of higher capital gains taxes, a market correction or both.

Here are the three things that boards and presidents should be expecting from their advancement offices this year:

Renewal

This is the year to increase your investment in stewardship efforts and activities. Effusively thank the donors who stuck with you through the pandemic and were fine with Zoom solicitations rather than face-to-face fundraising calls. Make sure you know what motivated last year’s largest donors and work to demonstrate how effectively their philanthropic objectives were achieved and how continued support will deepen and further their aims.

Re-engagement

Let’s talk LYBUTNTS and SYBUNTS – donors who gave Last (or Some) Year But Unfortunately Not This (year). Hopefully your development team will be impressed with your command of the jargon when you ask for a plan to reach out to those who had a habit of pre-pandemic giving but fell off last year. The strategy should be targeted and customized to all levels of giving. This year is your last chance to re-establish the pattern. Next year, you will have to reignite it.

Raising the Bar

Be realistic about where you set your fundraising target this year, but don’t be gloomy about it if you had a bad 2021.  Likewise don’t create a self-fulfilling prophecy by overcorrecting for an unexpectedly strong finish last year.

Set your goal by looking at your 5-year average gift total. This will smooth out exceptional peaks and valleys. Look at the trendline as well. Normally I’d say look at last year as a third data point, but whether it was a positive or negative outlier, just factor it into the average this year. And, finally, don’t forget to take into account what you and your gift officers know about the disposition of the top 10% of your donors this year.

Even though you feel pressure to increase revenue, I wouldn’t raise your goal higher than the projection of a positive trendline, but I also would be comfortable raising a pessimistically set budget target to at least the average of the last five years.

Set metrics for renewal and re-engagement but remember that your bottom line depends on raising the bar. So weight heavily the renewal and re-engagement of your largest donors and bring everyone else along for the ride.

Join me for my upcoming, complimentary AGB webinar on how to rebound this year with higher levels of giving and lower endowment spend rates. 

Give and Take: Achieving Financial Sustainability through Effective Fundraising and Responsible Endowment Spend Management.

Thursday August 12, 11-12 ET. 

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

With over 25 years of education leadership experience, B. David Rowe served as the interim president of Lancaster Theological Seminary and as president of Centenary College of Louisiana and of Lake Highland Preparatory School after holding senior level positions in advancement and strategic planning. An education strategy consultant, he advises presidents and trustees as the Private Higher Education and Foundations practice leader with the Association of Governing Boards and as principal at The Development President.