Higher Education Fund Raising

1. Higher Education Fund Raising Timothy C. Caboni Assistant Dean Vanderbilt University’s Peabody College Presentation to the National Press Foundation 31 October 2006 New York, New York

2. Beginning Questions • Is an appropriate volunteer fund raising board in place, and do its members fully understand their leadership role and responsibilities? • Has your institution systematically examined its fund raising potential? • Is the development office appropriately organized and configured for optimum productivity and results? • Has your institution made the prerequisite investments in institutional advancement to attain the desired results? • Does the President play an appropriate role in leading the fund raising program and integrating it into the institution’s superstructure?

3. Pyramid of Giving • PLANNED GIVING • Bequests • Wills/Legacies • Estate Gifts • Net Worth Gifts Investment Donor Commitment • MAJOR GIVING • Endowment Campaigns • Capital Campaigns • Special Projects • From Individuals/Corporations & Foundations Involvement Donor Growth Interest • ANNUAL GIVING TO/FROM I.E. • Support Groups • Special Events and Benefits • Annual Campaigns • Direct Mail Program • The general public Information Initial Support Identification

7. Gift Pyramid • 60% of gifts come from 10% of donors • 15-25% of gifts come from 20% of donors • 15-25% of gifts come from 70% of donors

10. Building and Maintaining the Base • Acquisition mailings – Enlist new donors – Never Givers • Renewals – produce income (sybunts, lybunts) • First time givers – renew at 50% rate, after that, 70-80% • 50% or your returns come in the first week

11. Pyramid of Giving • PLANNED GIVING • Bequests • Wills/Legacies • Estate Gifts • Net Worth Gifts Investment Donor Commitment • MAJOR GIVING • Endowment Campaigns • Capital Campaigns • Special Projects • From Individuals/Corporations & Foundations Involvement Donor Growth Interest • ANNUAL GIVING TO/FROM I.E. • Support Groups • Special Events and Benefits • Annual Campaigns • Direct Mail Program • The general public Information Initial Support Identification

12. Stages in the cycle 1 Identification 2 Research 3 Planning 4 Cultivation 5 Solicitation 6 Stewardship 7 Renewal

13. Principles of Gift Charts • The first two gifts should equal 10% of the goal: $100,000 • The next four gifts equal an additional 10% of the goal: $100,000 • The remaining gifts are flexible and can be broken down into various categories: $800,000. • This chart is most effective with fundraising goals of $25,000 or more

14. $1M Gift Table

15. Efficiency vs. Effectiveness Difference between effectiveness (maximizing the net between total gifts less fund raising costs) and efficiency (minimizing the average cost per dollar raised) The objective of an institution's fund-raising program should not be to spend as little as possible each year to raise money, but to maximize the net.

16. Efficiency vs. Effectiveness A program that annually produces $2 million at a cost of $160,000, or 8 percent, may look good and is indeed efficient, but one that produces $3 million at a cost of $300,000, or 10 percent, is presumably of more help to the institution [i.e., more effective] -- it is bringing in $860,000 more.

17. Return on Investment Analysis • ROI = Funds raised as a percentage of fund raising expenses • Bottom line cost percentages are not a useful measurement for internal management purposes • Performance of one kind of fund raising program cannot be evaluated against others

18. ROI Analysis

19. Contact Information Timothy C. Caboni Vanderbilt University’s Peabody College Box #514 Nashville, TN 37203 615-343-6222 tim.caboni@vanderbilt.edu peabody.vanderbilt.edu/faculty/lpo/caboni.htm