July 06, 2011

Breaking the Rules: Fund Raising in Hard Times

While many fund raisers are taking a back-to-basics approach to dealing with the bad economy, as my colleagues and I note in The Chronicle's cover story last week, others are turning conventional approaches upside down.

Among them: Barrett Carson, vice president for development at Georgia Institute of Technology.

Mr. Carson knew he had a problem soon after the stock market fell in 2008 and he saw something he'd never witnessed before: The amount donors were paying on past pledges exceeded the amount fund raisers were obtaining in new commitments.

"I’ve been doing this for 30 years and have never seen this type of reversal where new gifts and pledges go below cash flow," Mr. Carson says. "Everything just shut down."

Mr. Carson decided that Georgia Tech should keep sending fund raisers out to visit big donors. But he told fund raisers that he was dropping the dollar goals they previously had to meet each year as part of their performance evaluations.

For instance, in the past a fund raiser might be expected to raise at least $2.5-million, but now he or she would only be required to make 200 calls to potential donors—the number of visits it usually took to generate that amount.

"We wanted them to stay close to donors and prospective donors, but we didn’t want them to ask for an inappropriately timed gift," he explains. "But if a gift was possible, they were encouraged to go ahead."

When fund raisers were told that they didn't have to meet the dollar goals, "there was an almost audible sigh of relief," Mr. Carson recalls.

The fund raisers knew intuitively that pressing donors for commitments during the economic crisis "was just the wrong thing to do," he says.

Donors responded well to the calls, Mr. Carson says, and several expressed appreciation that fund raisers had stayed in touch but not pressed them for commitments.

The economy has now recovered enough that Mr. Carson has gone back to evaluating fund raisers based on dollar goals every year. But he did so only after contributions--still well below pre-recession levels this year--showed a small uptick last year. "We followed donors' lead," he says.

I'll share more stories of new approaches in coming days, and you can find more innovations that are working as part of our coverage of the release of "Giving USA."