Campaign Fever

CHARLIE LEIGHT/ASU NOW

Days before the end of a campaign that attracted hundreds of millions for the medical institution Cedars-Sinai, senior fundraisers Arthur Ochoa and Melissa Coleman sat in his office already planning the next one.

The Campaign for Cedars-Sinai came hot on the heels of another multiyear drive, Discovering for Life, which raised $350 million. On June 30, the Campaign for Cedars-Sinai, begun in the recession year of 2010, ended with $615 million, surpassing its goal.

Campaign Fever: Inside a Boom in Fundraising Drives

More organizations than ever are running multiyear campaigns with eye-popping dollar goals. But as donor interests change and competition for fundraising talent grows more intense, many organizations are rethinking the smartest ways to raise such big dollars.

And then on July 1, Cedars-Sinai began counting every penny donated and pledged for its next drive — a campaign that would not be approved by the organization’s board until eight months later, setting a goal of $1 billion.

The Campaign for Cedars-Sinai rode to success after eight years last June by driving home to donors the need for cutting-edge medical care and research, bolstered by stories of babies saved by its neonatal intensive-care unit and adults who benefited from its world-class heart-transplant surgeons.

Ochoa and Coleman worked to get everyone involved in fundraising — even billing-office clerks and parking-garage attendants — to help make patients and their families feel generous toward the institution.

But as campaigns nationwide grow in number and ambition — and more and more go on as endlessly as Cedars-Sinai’s — even the fundraisers running them wonder if it’s time to reimagine how to attract big dollars and nurture a new generation of donors to give generously.

New technology tools are making it easier than ever for nonprofits of any size to embark on ambitious drives, and changes in donor patterns are forcing a rethinking. So, too, are concerns that there’s not enough fundraising talent to fuel all the drives now underway — and that a recession could force donors to close their wallets.

Still, as nonprofits rethink how to run campaigns, it’s clear they have far more staying power than other approaches like annual funds and direct mail. In fact, the success of the biggest drives is inspiring nonprofits of all kinds to jump into the game. After Harvard shocked the fundraising world last year by announcing it had raised $9.6 billion, a record for any campaign, other organizations saw their goals in a new light.

Harvard’s example “just shows what is possible,” says John Hewko, general secretary of Rotary Foundation of Rotary International. The service organization, which works to eradicate polio worldwide, is seeking to raise $2.025 billion for its endowment by 2025.

“Harvard has a big alumni base. We have a big member base,” says Hewko, whose organization has 1.2 million members worldwide. “It encourages us.”

The rising campaign tide helps every type of nonprofit, say some fundraisers. “Smaller organizations, they may feel crushed by all these big campaigns going up around them,” says Lisa Cauda, vice president for development and alumni relations at Rochester Institute of Technology, which is running a $1 billion drive. “But success begets success.”

‘Bespoke’ Stewardship

Because of the popularity of campaigns, many of the nation’s biggest cities have multiple drives underway. Just across town from Cedars-Sinai, the University of California at Los Angeles is speeding toward the finish line of a seven-year plus campaign, already surpassing its $4.2 billion goal ahead of its centennial celebration.

And there’s more:

• The Los Angeles Philharmonic, also celebrating a 100th birthday, is raising money on a $500 campaign goal.
• The Academy of Motion Picture Arts and Sciences is raising $388 million for a museum.
• Next door, the Los Angeles County Museum of Art is trying to finish raising $600 million for a new building.

The University of Southern California, with more than $7 billion raised on a $6 billion goal, just ended its campaign in December. It made news in 2017 with plans to keep rolling after reaching its goal. Since then, USC’s fundraising juggernaut slowed, hampered by a welter of scandals, including a $215 million settlement in October for a case brought by former patients of a university gynecologist accused of abuse.

One way UCLA has managed amid all that competition is to increase the size of its development staff. Since 2012, it has hired 50 additional fundraisers and created new roles for people who acknowledge supporters and tell them how their gifts are being used, says Rhea Turteltaub, the university’s vice chancellor for external affairs.

“We knew if we were going to be asking for more, then our thanking game would have to improve,” Turteltaub says.

For large, transformative gifts, she says, fundraisers have created “bespoke” thank-you efforts.

For instance, Meyer Luskin, chairman of Scope Industries, which produces an animal-feed ingredient, and his wife, Renee, pledged $100 million in 2010. The contributions included $40 million to help build a conference center, which opened in the fall of 2016, that carries their names.

“We’ve spent a lot of time thinking about how we can thank the Luskin family,” Turteltaub says.

From fundraisers’ relationship with the Luskins, she says, they learned that the family enjoys traveling together. So before the conference center opened, “we invited then to spend a night in the conference center — the Luskins, their three kids, and grandkids — to effectively christen it and create a family memory.”

Billions and Billions

Campaigns have staying power, largely because that’s where the money is — and will be for many years to come, even if the economy swoons. The potential estate wealth poised to change hands over the next several years is unprecedented — a projected $9 trillion by 2027, according to an analysis released last year by e2 Entrepreneurial Ecosystems.

Also, fundraisers are more empowered than ever, with more of them coming to the field with classroom training and more access to fundraising and planning tools. Many can now jump into the campaign game without the expensive hand-holding provided by consultants.

Michael Eicher has helped the megacampaign trend grow and seen it explode. Now president of the Ohio State University Foundation, he’s overseen multibillion-dollar drives in his current role and at UCLA and Johns Hopkins University. Ohio State will launch the public phase of its next campaign in October.

Back in the mid-1980s, when his career was starting, he recalls how the fundraising world was rocked when Stanford University launched the first $1 billion campaign. “We all held our heads and said, ‘How long can this go on?’ ” Eicher says.

Recently, doing research to lead a panel discussion about the trend, he counted about 170 higher-education campaigns since Stanford’s that have posted goals of $1 billion or more. “I don’t frankly see any end in sight.”

On the Bandwagon

For small organizations, campaigns are often a way to jump-start major-gifts fundraising. But that’s not always a great idea, says Gail Perry, a fundraising consultant in Chapel Hill, N.C “It’s going to make your capital campaign much more painful. And slower,” she says.

She’s done many feasibility studies for clients, trying to figure out whether their donors would embrace a campaign, and too often, she says, it’s clear supporters and community leaders don’t know enough about the organization to enlist in a campaign. “They haven’t been cultivated at all,” she says. “It breaks my heart to spend the time and then have to go back to the organization and say, ‘You need at least a year.’ ”

Sooner or later, though, a campaign presents itself to organizations of all sizes as the answer to the never-satiated need for more resources.

“In order to sustain growth, you need to bring in more money than what you’ve been doing annually,” says Nina Diefenbach, deputy director for advancement at the Barnes Foundation, a cultural and educational institution. Her institution announced a $100 million capital campaign in January.

“There is the constant management mandate to adjust budgets, but you can only do that so much before you have to starting bringing in more cash — to experiment and try and dream a little.”

Several other museums and big nonprofits in the city are also running ambitious drives. But such intense activity doesn’t necessarily run the risk of wearing out donors’ goodwill, Diefenbach and other fundraisers say, and is good for philanthropy in general.

“In a vital community, every institution should be involved in a campaign of some kind,” Diefenbach says. As for donor fatigue, “I would argue that donors are used to the constant cycle.”

In fact, she suggests, they may like that “you have a bandwagon to climb onto, which is what the campaign structure provides. It gives confidence to donors to have that structure in place. It makes donors feel even more compelled to give and happy with their choice.”

Minnesota Public Radio

‘Chasing Bentleys’

The mantra of big campaigns — that 90 percent of the money comes from 10 percent of the donors — is a key reason campaigns are doing so well in a nation where wealth is increasingly concentrated. The new wave of campaigns is relying heavily on major donors, who are digging deeper than ever.

“Five is the new two,” says Ochoa of Cedars-Sinai, meaning the institution received the same number of gifts of $5 million in the campaign it completed last year as it did $2 million gifts in its drive that ended in 2010.

With giving by middle-income donors fading since the Great Recession, campaigns are often the measure of the depth of an organization’s support, not the breadth.

Several fundraisers say they’d like to see future campaigns court midlevel donors more aggressively.

Brian Gawor, vice president for fundraising research at the consultant Ruffalo Noel Levitz, also foresees a greater emphasis on midlevel donors. Too many fundraisers, he says, are “chasing Bentleys,” naming the luxury car to signify uberwealth.

“I’d fall all over myself to get $10,000 in a campaign 10 years ago,” he says. “If we chase the Bentleys to excess, we’re going to lose people to others.”

Randi Yoder, chief development officer at Minnesota Public Radio, predicts that more organizations will build robust midlevel giving programs in the next decade. “Nonprofits typically invest in annual funds and acquiring new donors. They invest in their largest donors. So there’s a slew of midlevel donors being ignored,” she says.

In the meantime, however, her organization is running a campaign that depends entirely on its most affluent supporters. Minnesota Public Radio, which launched the public phase of a $75 million drive in February 2018, has raised $68.5 million so far. It’s doing so well with major donors that it’s decided not to seek contributions for the drive from anyone else, Yoder says.

The campaign is the largest Minnesota Public Radio has ever taken on, and an unusual one, Yoder says. “We’re not raising money for building. We’re raising money for intangibles.”

Gifts will support the hiring of employees with new skills, the purchase of updated technology, and news reporting that covers three topic areas: water, mental health, and early-childhood brain development. The new coverage comes from conversations with donors and community leaders about what issues will matter most to society in 10 to 20 years.

“We are already planning a special gift initiative right after this one ends, a mini-campaign,” Yoder says. “We’re thinking about our next major campaign. We don’t know what that will be.”

CEDARS-SINAI MEDICAL CENTER

Future Trends

Minnesota Public Radio’s plans for a mini-campaign after its major one ends puts it squarely on trend. Some fundraisers and consultants say such short-distance drives in between long campaigns are likely to proliferate in the coming years, a way of keeping fundraisers on the job and donors giving.

Mini-campaigns, such as crowdfunding and giving days, are also embedded in longer drives. Gawor, of Ruffalo Noel Levitz, says his data shows that three-fourths of college and university campaigns hold giving days, “I don’t think anyone would have predicted that,” he says. Half of institutions his group surveyed also engage in crowdfunding.

The median length of a campaign is now eight years, a long time in an era that requires organizations to remain nimble.

What could replace it? Shorter-term fundraising goals that “don’t try to thematically tie together things that don’t have any business being tied together,” suggests Ochoa, of Cedars-Sinai. The idea would be more like, “Over the next five years, we need to raise X number of dollars. Here are the priority projects; here’s our inventory,” he says. “What you’re doing is cobbling together all the smaller constituent pieces that wouldn’t have to be artificially shoehorned together in a campaign.”

The Numbers Game

Finding campaign donors has grown increasingly sophisticated as technology makes it easier than ever to pinpoint who can and will give. The strategy of making a list of a charity’s wealthiest donors and calling your way through it “is over,” Gawor says. Instead, he says, new strategies revolve around “who is showing the most palpable interest.”

At Princeton University, now in the quiet phase of its next campaign, development staff told fundraisers attending a Council for Advancement and Support of Education conference in Baltimore last month that they are building a “recommender” app, which will suggest programs and projects that prospective donors may want to support based on their previous activity — similar to recommendation systems used by Netflix and Amazon.

At the University of Alabama at Birmingham, data mining helped drive the charge toward $1 billion raised in a decade-long campaign that ended in December.

Although the institution did add staff for the drive, “for the most part, it’s less expensive to invest in technology,” notes Tom Brannan, the university’s vice president for advancement and alumni.

The numbers, he says, helped drive hiring decisions. A preponderance of major-gifts prospects in a certain part of the country, for instance, might indicate the need to hire someone to work that territory.

Data helps the institution do more than find people with the ability and inclination to give, Brannan says. “We’re creating a more interactive relationship with donors.”

Brannan recounts one way in which the university used data to create a closer relationship with an Alabama graduate. “We have an alumnus who lives in Atlanta; looking at our data, he’s an MBA graduate, an entrepreneur. He’s an individual we had not been engaged with.

“We brought him back as a master teacher to speak to some of our classes, not as a philanthropist,” the fundraiser says.

Oh, and one more thing: “He ultimately made a couple of large gifts.”

Listening to Donors

What could shake the success of campaigns? Possibly nothing. The Great Recession slowed down some drives’ momentum, but fundraisers who lived through the experience say goals were generally met.

Organizations’ own financial woes may not even slow things down, especially if nonprofit leaders and fundraisers take time for wide-ranging conversations with supporters.

The Baltimore Symphony Orchestra announced its $65 million campaign in January 2018; a year later, it had raised $47 million, with plans to end the drive this coming December. The orchestra is one of fewer than 20 in the country that operate full-time, with musicians performing 52 weeks a year.

Like many other American orchestras, however, its audience is aging, and it’s had financial struggles, with about $16 million in red ink over the past decade. Currently, its musicians are working without a contract, having rejected an offer to scale back performances to 40 weeks annually, which the musicians say would demote the orchestra to a part-time enterprise.

And yet the crisis has presented opportunities for the campaign.

“We have found people who wish to come and help us work through this,” meaning both supporters and staff members, says Peter Kjome, the orchestra’s president. “There are some people who have found this to be a place where they want to be and who don’t find the challenges daunting.”

In addition, the organization has sought feedback from longtime supporters, many of whom said they hoped that the orchestra would continue to engage younger generations. New programs emerged from those conversations, such as Young and Free, launched in October, which lets children under 17 attend certain performances free if accompanied by a ticket-buying adult.

“It’s more important than ever to listen very carefully to donors,” says Kjome. “It’s more important than ever to think about different generations who are supporting an organization.” Different generations of donors, even within the same family, he says, may have different priorities for the same nonprofit.

Yoder, who was at the Greater Twin Cities United Way when the Great Recession hit, remembers well how “shaken” even very wealthy donors were by how fast the economy slid. But she’s more optimistic about the potential for speed bumps this time: Both donors and charities have learned some lessons from that experience, she believes.

This time, she says, more wealthy donors “have set up their finances to buffer any downturn.” Nonprofits have learned the need to diversify their revenue. And, she advises fundraisers, in the event of another recession, “keep working on your planned-gift program to maybe fuel an endowment that will help you ride out the storm.”

Planned gifts are likely to play a bigger role in Cedars-Sinai’s next campaign, says Ochoa. The just-completed drive included few bequest commitments but several “blended” gifts, in which donors give part of the gift immediately, and the rest arrives after their death.

He and Coleman also anticipate that the next drive will raise substantial money for capital projects, a change from the previous two campaigns. Because of the economic realities of 21st-century health care, Ochoa says, Cedars-Sinai will need to rely on the private support generated through its next campaign to build and grow.

The organization isn’t alone in its need for turbocharged giving. In a time when government support for education is decreasing, universities are also leaning heavily on campaigns to keep their balance sheets healthy.

Or, as Ochoa quotes his board chair on the subject: “Philanthropy is no longer the icing on the cake; it’s an essential layer of the cake.”

Biggest Current Campaign in Every State

Notes: Includes comprehensive, capital, and endowment drives. Some campaigns are in a “quiet” phase. “TBA” indicates a financial goal has not yet been announced, but the organization’s history with campaigns indicates it would likely be the largest in that state.

* The goal for North Dakota State University’s campaign, in a quiet phase, is estimated by its foundation president.

Source: The Chronicle of Philanthropy. Data compiled by Heather Joslyn with assistance from Julian Wyllie

A previous version of this table incorrectly said the largest campaign in Wyoming was the $7.9 million one at Eastern Wyoming College. It should have said the one at St. John’s Hospital Foundation, with a goal of $15 million.