News and analysis
August 05, 2014

Colleges Plan on Big Jump in Fundraising Next Year

Colleges and universities are aggressively planning to increase donations by a median 16 percent in their 2015 fiscal year, according to a new survey of 335 chief advancement officers in education.

Nearly 60 percent of the survey’s respondents, most of whom were from American colleges and universities, plus a few Canadian participants, said they are aiming for an increase of 10 percent or more in giving next year. More than one in four are planning for a more than 25-percent jump in donations in fiscal 2015, which began July 1 for most colleges and universities.

The survey, which included nearly 100 respondents whose organizations failed to meet their fundraising goals this year, shows that leaders in higher education—regardless of their institution’s size—are placing more pressure on their top fundraisers to bring in money, the researchers said.

The pressure, they said, stems from flat or declining revenue, with recent reports showing that revenue growth in higher education is not keeping pace with inflation.

Forty percent of colleges and universities in the survey, conducted by researchers at Academic Impressions, a training and research organization, are investing new resources in fundraising, while another 40 percent are investing reallocated dollars in their advancement operations. The remainder are investing a mix of reallocated and new resources to increase giving.

Most of the new investments, however, are not being used to hire new staff members except major-gift and donor-relations officers. That suggests that colleges and universities are relying more on their existing donors to provide "larger and more transformational gifts" than on trying to find new supporters, the researchers said.

But that poses problems. "Because the strength of your donor pipeline is the best long-term indicator of your advancement health, this is a worrisome sign that new prospects aren’t being added as regularly as existing prospects are being targeted," the researchers wrote. "Adding to the reasons for concern: Many midsize and larger shops aren’t making comparable investments in advancement services to provide for critical data mining, prospect research, and stewardship of current donors."

Another sign of increased pressure on fundraisers in the survey: Almost none of the respondents reported spending less on any donor-engagement method, including social media, even when it was found to yield few, if any, donations.

Amit Mrig, one of the survey’s authors who helped found Academic Impressions a dozen years ago, said he was surprised to learn that smaller institutions like community colleges, which tend to have less sophisticated fundraising programs, are also pursuing major gifts aggressively. "I thought they’d be investing more in the annual fund and alumni relations," he says. Among the smallest colleges, those trying to raise less than $2.5-million annually, 56 percent said their biggest investment for 2015 would be in major gifts, up from 29 percent in 2013.

Mr. Mrig and his fellow researchers urged colleges and universities to find ways to retain fundraisers who seek large gifts. Other research has found it takes major-gift officers two to three years to reach full productivity in a new job, but they tend to stay for three and a half years, on average. Other studies have found average tenure to be just 16 months.

The survey identified five fundraising strategies that appear to be working well for respondents: Challenge gifts that offer to match new donations, blended gifts that combine a large outright gift with a bequest or other planned gift, tailoring solicitations and donor-recognition efforts to individuals’ preferences, seeking endowed scholarships, and expanding the ways companies can get involved with a college or university.

The researchers also identified some promising fundraising tactics that few institutions are investing in: customized thank-you and recognition plans for individual donors, using alumni to help recruit students, and getting students engaged in fundraising.

But nearly 90 percent of the survey respondents were not using a tool called Net Promoter Score, which the researchers said has been used successfully by at least two large universities. Net Promoter Score, a tool developed by Bain & Company, helps colleges and universities identify alumni and other people who are good "ambassadors" and can therefore help an institution raise money.

"Given the successes and usability of this tool," they write, "we question whether the Net Promoter Score is the biggest untapped opportunity for advancement offices in the coming year."

A free copy of the executive summary of the "Higher Ed Impact Executive: Driving Decisions for Advancement Leaders" survey is available free on the Academic Impressions website. Full copies may be ordered at a cost of $195 for survey participants and $295 for all others. The company is also offering a free webinar about the survey on August 19 at 1 p.m. Eastern time.

Send an e-mail to Holly Hall.