Sustain Funding Growth:

Leadership Guide to Navigate Tough Times

Rod Miller leads Executive Institutional Advancement Exchange and for more than two
decades has been an advisor and led institutional advancement in higher education in
North America and internationally.
Abstract
This paper provides senior leadership teams with steps taken to sustain funding growth
during economic tough times. Experiences of chancellors, presidents, advancement
leadership and consultants who report ongoing fund raising accomplishments are
described. Three steps to navigate the economic restructuring are outlined and applied to
a constructed case study of an educational institution for its three ages of institutional
advancement, namely formative, emergent and mature operations.
Keywords:
fund raising, strategy, funding growth, tough economy
Email: rod@execiae.com Web: www.execiae.com

Introduction
It is important to understand how economic turmoil impacts an institutions fund raising,
and why for some educational institutions this makes for the best of times and for others
the worst of times along with what actions institutional leaders take to seek the best of
times despite the economic challenge. The focus of this paper is to clarify how
institutions sustain and grow fund raising in tough economic times. The purpose is to
help gather and organize a coherent approach to planning and executing a sustainable
fund raising program in these times. By drawing on the experiences of leaders of
institutions, institutional advancement, volunteers and consultants, the paper proposes a
3-Step approach to gather the best thoughts pertinent to an institution to help sustain fund
raising an approach that would also be good for the best of times. The conclusions and
recommendations here are based on inquiries, consultations and observations of best
practices in the United States, Canada, Britain, Australia and New Zealand during the
tough economic times of 1987, 1990-91, 2001 and the 2008 meltdown.
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NEWS FLASHES:
where donations to universities are still a relatively new conceptThe University of
Auckland, New Zealands largest, launched the campaign with the announcement it had
already raised $48 million from a range of significant donors November 23, 2008
(universityworldnews.com)
Despite beginning and ending during serious economic recessions, the most ambitious
fundraising campaign in state history soared past its $600 million goal to raise $853
million January 30, 2009 (pmr.uoregon.edu)
Indiana University and its fundraising partner, the IU Foundation, today announced that
they are raising the goal by $100 million, or 10 percent, to $1.1 billioncampaign, which
runs through 2010, already has realized 95 percent of its initial $1 billion goal
February 6, 2009 (iufoundation.iu.edu)
Over half of companies increase their philanthropy in 2008, despite economic decline.
June 2, 2009 (corporatephilanthropy.org)
During the economic meltdown of 2008, these items of good news amid the repetitive
gloom of most news media might have been heartening for some and considered to be
against trend by others. On a more tangible level though, personal experiences were
similar. In mid-October 2008, a head of a regional higher education institution reported to
colleagues that a donor had visited to write a check for half a million dollars and to affirm
the next three annual payments of the same amount. An institution that provides after-
school educational programs nationwide continued to have donors calling to establish, to
renew or to upgrade giving. Another educational institution in the quiet phase of a
comprehensive campaign targeting half a billion dollars, reported a ten percent increase
at J une 2009 on the result the year before. Consider too, that in J une 2009 when
chancellors, presidents and other senior leaders of state liberal arts colleges were asked at
the beginning of a workshop to share some good fund raising news, the responses were:
$3 million gift plus matching funds; alumni giving up; annual fund up; and three
institutions reported increased philanthropy for financial aid for students. The following
week, during a telephone call with a consultant, the mention of this event stimulated his
observation that even a soup kitchen (a client in a major city, and to many a classic
indicator of the state of the economy) had experienced a record increase in funds raised
through direct mail (Miller, 2009, personal communication).The anecdotal hypothesis
suggested during the telephone call to explain these successes was that the institutions
that invested substantially in organized fund raising programs were being successful. On
reflection, this was not a satisfactory explanation, since almost half the cases above were
modest start-up, formative or pre-emergent fund raising programs.

It was noted among the sampling of educational institutions surveyed for the Target
Analytics of Higher Education Fundraising Performance for 2008 that donor counts were
down and dollars were up (Blackbaud.com, 2009). It was also observed in this report that
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although the donors who were giving tended to give more, donors were becoming more
selective about the charities they supported. The same report noted that private
institutions saw a modest decrease in median revenue per donor and public schools had a
modest increase. These observations were consistent with personal reports that at the
onset of the downturn (particularly, early in 2008), institutions that were successful in
accomplishing fund raising goals had put more emphasis on soliciting gifts from trustees,
other lead individuals, private foundations and planned gift prospects (Miller, 2009,
personal communication).

Economic distress and fund raising success
Some education-related institutions sustained and expanded income when fund raising
was systematically intensified and both the mission of the organization and the case for
fund raising focused on areas of perceived high value, such as for STEM (Science
Technology Engineering and Math Education), or for research to improve the diagnosis
and treatment of medical conditions that affect substantial population groups. As in
normal economic times, more was needed to secure fund raising success than the
institutions mission being world-changing and well expressed, or the institutions
enjoying positive media coverage. Early in 2009, personal reports and first responses to a
survey of how institutional advancement leaders were addressing the economic
challenges identified the following factors as pertinent to fund raising success in the new
reality.

1. Non-profit direct marketing seemed to lag the economy and the effects on giving
did not necessarily parallel other financial declines, such as consumer spending.
2. Institutions with community-relevant missions showed the most potential to
sustain higher levels of giving.
3. Shifts of effort toward soliciting larger gifts, especially from trustees, other lead
individuals (including past donors for both current needs and planned giving) and
private foundations, helped to offset declines in some other areas, such as the
annual fund.
4. Institutional leaders with access to or engaged with well-networked
philanthropists were most able to reach out to secure new larger gifts.
5. Institutions that were to fare best had leaders who conducted fund raising in what
might be called an ongoing campaign mode, with an integrity of communicated
expectations and participation among leadership and the advancement team,
creative problem-solving, flexibility and a hands-on commitment to calling
prospects and ensuring follow-through.
6. Some formative and emergent fund raising programs (in which a few new major
gifts had a relatively large impact) fared better than some mature programs. The
reliance of mature programs on a small number of very large donors dealt a
serious blow to some mega-campaigns whose lead donors financial losses were
substantial (including some to Bernard Madoff), which prevented their honoring
campaign pledges. (Miller, 2009, personal communication)

The common sense for effective fund raising underpinning these observations was not
generally evident and institutions varied considerably in executing common sense.
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Anxiety about the economy induced a sit on the hands approach in some. Rational
reminders that the biggest reason prospects do not give is that they are not asked provided
little or no inducement for some to overcome personal inhibitions about talking with
peers about giving. With economic stress fueling personal stress, perhaps this was not a
time for clarifying the different understandings among an institutions leading players
about what constitutes good practice in fund raising, much less development and
advancement. Institutions with strong leadership or that otherwise found ways to get
some clarity and unity of purpose were able to conquer the structural, cultural and
leadership blind-spots that can work against the execution of effective advancement.

Institutional advancement for engagement
Differences of opinion among an institutions leaders about what are the appropriate
philosophy, roles and processes for advancement became especially evident in times of
stress. One area of such differences, later discussed as key to effectiveness in tough
times, is nicely illustrated in David J . Weerts descriptions of what he called the
traditional model of advancement and the engagement model of advancement (Weert,
2007, pp. 96-97). Briefly, the institutions that follow a traditional model for advancement
will focus most effort toward matching the cultivation, solicitation and stewardship of
stakeholders by college, department affiliation or degree (in the case of alumni). For the
engagement model, however, institutions articulate the overall vision and needs of the
school/college/institution in the context of the community agenda and facilitate team
leadership and stakeholder selection toward cultivation, solicitation and stewardship that
are matched to advancing this agenda (Weert, 2007, p. 97) and pay no heed to the silos of
the academy that are based on disciplines. As the name implies, the engagement model
brings stakeholders into contact with the institution or area of the institution that helps the
stakeholder genuinely participate in developing new ideas to address community needs. If
the traditional model assumes the educational institution to be the repository of
knowledge, the engagement model assumes the stakeholder and community are
participants with the educators in the development of knowledge. In a time of economic
meltdown, institutions already functioning more in the engagement model or able to put
together teams of internal and external stakeholder/leadership would be best positioned to
handle some of the realities of economic challenge.

The substantial economic changes of 1987, 1990-91, 2001 and 2008 all produced
restructurings of capital, industries and jobs. Through the engagement of stakeholders
who are sufficiently insightful and in-touch with the economic changes occurring,
institutional and advancement leaders who sought and listened for linkages to the winners
within the economic change discovered opportunities to sustain funding growth. These
times also provided the opportunity for higher education leaders who had the flexibility
to adjust operations and emphases of the institution to match more closely longer-term
educational, research and community service needs, with the support of information,
knowledge and resources jointly identified and developed by the academy and the
community.

For example, some large technology companies in times of economic challenge shed
substantial numbers of jobs designed for the development of previous services or
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products that would not be needed for the next stage of the companys operations or
technology development. Concurrently with announcing such job losses, these firms
sought to recruit for new jobs with needed skill-sets to support the companys next stages
of development. Although education and industry institutions operate on different time
cycles for shifts in program design and offering, an advancement function based on the
engagement model would enable sufficiently early-stage understandings to be developed
among a variety of community and educational leaders to explore mutual interests and
funding opportunities in parallel.

Not only are educational institutions at very different stages of evolution between the
traditional and engagement models but also intersecting this evolution are at least three
distinct Ages of maturity of advancement in various institutions, namely Formative,
Emergent and Mature. In order to draw out characteristics and principles that
confront institutional leaders in these different ages, the author presented generic
descriptions of the three ages within the framework of a university/college setting to a
workshop group of chancellors, presidents and other senior educational leaders of liberal
arts institutions. The leaders were asked to recommend an institutional advancement plan
that addressed the 2009 economic conditions and the next five years to sustain and
expand fund raising. Some generally applicable recommendations were found to emerge
for the formative, emergent and mature versions of the institution described.

Institutional case study
The hypothetical institution was given the name College of Arts and Sciences
Advancement (or CASA) to provide a familiar framework for the workshop
participants and the facts outlined were generically applicable to educational
institutions. The author presented workshop participants with the same guidelines and
questions to pursue. Three groups of seven participants in each group addressed one of
the Ages below, with the charge to help identify and organize issues to address,
information to gather and changes to recommend, and to consider the facts about each
age of the institution by focusing successively on a Repositioning Strategy (Step 1),
Organizing Advancement Process (Step 2) and Integrating Priority Behaviors (Step 3).
Each group compiled a list of TO DOs for each of these steps, and then selected only
the top priority for each step to serve as the basis for a three-point plan to sustain and
expand fund raising for the institution in the tough economy. Questions distributed to all
participants to guide each groups consideration of each step in relation to the institution
were:

Step 1: Reposition Strategy: How would you determine why your institution is uniquely
valued? From whom would you seek input to describe the value of the institution and its
programs? What would you most like to know from whom? Why? What is a good sized
board of trustees for advancement purposes?

Step 2: Organize Advancement Process: Which prospects (or suspects) should you
engage most closely and ask? How do you determine what funds should be raised for and
how much should be requested of prospects? What tracking of outreach needs to be in
place? How should the advancement budget be set? Why?
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Step 3: Integrate Priority Behaviors: What are priority activities for each of the following:
trustees, senior management and advancement staff? Who are the key members of your
advancement team? What is a good rate of visits to engage prospects and ask for major
gifts? Who should you engage in advocacy, door-opening, asking or follow-up? Why?

Following are the challenge scenarios for the institution at its three ages of the
advancement function that were considered -

CASA Formative Age
Institution has some name recognition, though mainly in local and regional communities.
Has a reputation for delivering programs well, including program-related events and
occasions that foster interaction with the community.

Some trustees bring a variety of community leaders to the institution to meet the
president and tour facilities or attend events. Most trustees regularly attend meetings
related to board activities and important public events. For more than a year, the
advancement function has not been led most appropriately.

Fund raising targets are set based on the previous years achievement, with annual
adjustments that are influenced somewhat by expectations of trustees, program leaders
and/or other stakeholders. The list of potential larger donors is still being developed and
these folks are yet to be systematically engaged. Philanthropic income is not yet four
times the size of the advancement budget.

CASA Emergent Age
Institution has good name recognition and reputation among most key stakeholders.
Community outreach programs are many and the numbers of community members
attending events in a variety of interest areas is continuously high.

A small percentage of trustees use personal networks to bring their contacts to events and
follow-through with the president and/or program leaders to find a match for giving. The
president and an experienced leader of the advancement function cooperate to build
outreach through trustees and vigorously drive advancement staff visits to some key
stakeholder groups.

The comprehensive campaign target for the quiet phase of the campaign was set before
the most recent economic downturn, with some years further to run on the original time-
line for the campaign. Most of the identified larger prospects have been solicited.
Philanthropic income is more than five times the size of the advancement budget.

CASA Mature Age
Institution has national and international name recognition among key stakeholders.
Program leaders and other staff are much sought after as expert commentators or
participants on significant community undertakings, including policy input. Seminars and
cultural events of the institution are generally regarded as the reference in the field.
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A substantial percentage of trustees and program advisory boards are well-networked
philanthropists and corporate leaders, who have decision-making capacity for significant
budgets and who recommend and facilitate engagements with key philanthropists. After
ten years at this institution, the experienced leader of the advancement function is now
working with her third president to strengthen further the number and quality of well-
networked philanthropists who will be recruited as trustees and advisory board members,
sustain leaders of key advancement areas and refine emphases in effort.

The annual targets for philanthropy are determined by the president in consultation with
advancement volunteers, deans of faculty and advancement staff leadership, who are
expected to collaborate to build fund raising teams of colleagues, community leaders and
advancement staff to grow philanthropic income. Although the institutions most recent
major campaign was successfully completed as the economic downturn was
commencing, and philanthropic income has not declined overall, larger gifts are being
secured from fewer donors and donor retention has declined. Philanthropic income
annually is more than ten times the advancement budget.

Summary advancement plan elements
Institutional leaders in the different groups that addressed the three ages of the institution
facing the economic meltdown were asked to report the groups priority actions for an
incoming President, and indicated the following:

Formative Emergent Mature
Reposition strategy Create centers of
excellence.
Clarify the role of
trustees to seek
resonance with the
community through
outreach.
Use networks to
find new donors.
Organize advancement
process
Set advancement
goals to address
needs and to
establish a central
advancement
organization.
Initiate six-month
review for how
each part of
advancement
contributes to
raising funds for the
institution.
Add advancement
staff, refresh the
case for fund
raising and identify
the institutions
program experts to
be engaged in fund
raising.
Integrate priority
behaviors
President to set the
agenda with priority
on getting the
President into the
community.
Secure firm
commitments from
trustees to funding
and fund raising.
President to
commit serious
time to fund raising.

Table 1: Advancement Plan Priorities: Case Study

What this summary of the different groups priorities made most evident were the
similarities of emphasis on the pro-active responsibility of trustees and the president to
chart a course that engages institutional leaders with the community. With perhaps some
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adjustment for institutions at different stages of evolution of an engagement model of
advancement and differing maturities of the advancement function, a composite of what
the institutional leaders presented above would be a valuable starter-kit to grow the
advancement function in the best or worst economic conditions.

Drawing on the discussion of the groups and other observations expressed more widely
about the best responses to the economic stress, it is suggested that the best return on
investment from the advancement function might be accomplished through

1. Repositioning institutional strategy by engaging stakeholders very closely to
say why the institution is valued.
2. Organizing the advancement process by building actions for teams of the right
trustees, faculty leaders and advancement professionals to partner with the
president to set the pace as an example for vigorous outreach to major gift
prospects.
3. Integrating the priority behavior of making connecting conversations happen to
move forward on big opportunities every day.

Leaders of the institution who helped to keep focus on such actions to reach out to the
right prospects on the right big opportunities might make a relatively small number of
successful solicitations, yet these efforts potentially have great impact over time. During
economic stress, large credible dreams likely keep attracting a following, as long as fund
raising success matches the expectations of stakeholders. Leadership has special
responsibility to frame, monitor and help adjust expectations to match what becomes
iteratively known about potential donors and the specifics of unpredictable time frames
that surround larger-gift fund raising.

Some pre-requisites for moving such actions forward in tough economic times were
derived from the observations and responses of institutional and advancement leaders in
workshops, conversations and an ongoing survey of new practices. The points were
gathered from a wide range of sectors as a preliminary list of priority actions for these
times.

1. State what gifts are now especially meaningful.
2. Engage trustees, foundations and individuals with large capacity for giving, who
are closely matched in interests with the gift opportunities.
3. Emphasize new prospects for larger gifts.
4. Revisit and solicit past donors of larger gifts.
5. Seek endowment and other longer term security, such as pledges over multiple
years and planned gifts.
6. Speak to the impact of the gift, and be ready during the solicitation of larger gifts
for the donor to want to spread payments over a number of years.
7. Build a very close team of the president, chief financial officer and the head of
advancement, with regular open discussion and joint problem-solving.
8. Increase the prospect pool and the number of love visits and calls to prospects
and donors.
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9. Redouble all personal contact, especially solicitation (Miller, 2009, personal
communications).

Building advancement performance
With some guide to strategy and priorities for process and behaviors in hand, it was also
important to try to keep perspective on what constituted effective advancement
performance. The economic challenges provided quite sufficient confusions and
opportunities for differing views about the most productive actions for the institutions
advancement. The agreement of expectations and understandings about what constituted
an effective institutional advancement function was most important. J ust as academic
reputations are built over time, it takes time to build advancement accomplishments.

In order to make a comparison of performance in different institutions at one time,
advancement leaders who were asked to provide information about areas of process
provided the following metrics which were distributed to institutions participating in a
benchmarking project (Miller, 1994). By consulting advancement leaders in four
countries for five institutions that commenced fund raising at different times within a five
decade timeframe, a grid of varying comparison points was collected. This grid included
the age of advancement operations, scale of fund raising income, size of endowment,
number of field fund raising professionals, number of alumni of record, estimated
average number of visits of a major gift officer each month and estimated average
number of asks or solicitations managed by a major gift officer each month.

USA 1 USA 2 Canada UK Australia
First Year of
Fund
Raising
1936 1960 1946 1990 1987
Fund
Raising
Income/year
$182M $27M $37M $1.3M $1.5M
Endowment $2.7B $262M - $8M $184,000
Number of
Fund
Raising
Field Staff

85

18

16

11

4
Alumni of
Record
129,160 57,449 120,000 45,000 1,600
Major Gift
Officer
Visits/month

15

27

12

14

12
Major Gift
Officer
Asks/month

4

4

3

2

2

Table 2: Higher Education Reality Check

As the institutional leader, trustees, advancement and faculty leaders set out together to
raise funds, discussion about where the institutions current and targeted locations within
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a grid such as Table 2 would provide some metrics to make a reality check on unframed
conversations about the process or growth targets appropriate for a particular institution.

Key considerations to frame conversations about targets would also include careful
assessment of the indicators of the maturity of the advancement function, such as the
level of engagement and philanthropic capability of an institutions constituents, the
engagement of well-networked philanthropists and the involvement of leadership in
walking the talk of fund raising. Other factors related to advancement process were
also found important to understand what constituted a mature advancement function.
Although generalizations about this become especially difficult because of variations that
arise from variations in constituencies, the age of the program and many other factors, a
rough guide of characteristics of a mature advancement function could include

Cost/Revenue at less than 20 percent, with some institutions in campaign mode
or with a strong major gifts programs claiming less than 6 percent.
Annual fund at 10 percent of total giving.
Solicitations of bequests coordinated by each planned giving officer at a rate or
1-2 per month.
40-50 hot prospects managed at any time by each major gift officer.
Major Gift Officer (after three years) might be expected to manage 150-200
prospects, with an expectation of $600,000 to $3M plus per year in gifts,
depending on the characteristics of the constituency and other factors.
Up to 6-8 involvements to ask a prospect for a gift.

New practices in tough times
In conclusion, the new economic circumstances brought both new opportunities and
requirements for leaders of education to develop flexibility, engagement and some
empirical framework to guide performance. It was observed in one of the early writings
on benchmarking institutional advancement, that although the key areas requiring
improvement at any time will differ from one institution to another according to the stage
of development, emphases or styles of leadership and institutional priorities, three sets of
principles underpin effective institutional advancement. These are (1) strategic, (2)
process, and (3) behavioral (Miller, 1995). For the effective integration of productive
actions for fund raising in tough times, the new practices offered in this paper should
collectively embrace the Repositioning of strategy, Organization of advancement process
and Integration of priority behaviors to maximize the institutions Return On Investment
in the advancement function.


References

Brown, J . (2009) University of Oregon Raises Record $853 million in Campaign Oregon.
online article, 30 J anuary: Pmr.uoregon.edu.

Over Half of Companies Increase Their Philanthropy in 2008, Despite Economic
Decline. (2009, 2 J une), online article: Corporatephilanthropy.org.
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Gerritsen, J . (2008) New Zealand: Universitys $100M Fundraising Campaign, online
article, 23 November: Universityworldnews.com.

Indiana University Foundation IU Raises Matching the Promise Goal to $1.1B. (2009, 6
February), online article: IUfoundation.iu.edu.

Miller, R.G. (2009), Pooled Research Study: Best Practices in Tough Economic Times,
Princeton, MA: Executive Institutional Advancement Exchange Inc.

Miller, R.G. (1994), Benchmarking for Major Gift Growth: Project Description.
Brisbane, Australia: Queensland University of Technology.

Miller, R.G. (1995), Briefing to Benchmark Institutional Advancement. Paper presented
at AITEA Conference; 28 April, Gold Coast, Australia.

Target Analytics Index of Higher Education Fundraising Performance Q4 2008. (2009,
14 April), online publication: Blackbaud.com.

Weerts, D.J . (2007), Toward an Engagement Model of Institutional Advancement at
Public Colleges and Universities, International Journal of Educational Advancement, 7,
2, pp. 79-103.

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