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Giving Trends in Independent Schools NYSAIS Advancement Conference. Kathleen Hanson, Senior Consultant & Principal Leader: Schools’ Practice Group. Your planning committee asked me to address:. Is the amount of money for philanthropy getting smaller?

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giving trends in independent schools nysais advancement conference

Giving Trends in Independent SchoolsNYSAIS Advancement Conference

Kathleen Hanson, Senior Consultant & Principal

Leader: Schools’ Practice Group

your planning committee asked me to address
Your planning committee asked me to address:
  • Is the amount of money for philanthropy getting smaller?
  • Are schools less of a priority when individuals are considering charitable giving?
  • Are people changing the areas they wish to give to in schools?
  • Are schools dealing with “culture clashes” with old versus new money
many trends are regional
Many trends are regional………….
  • Certainly impact of the recession created less giving among some segments of the school community
        • Loss of jobs
        • Loss of bonus
        • Real Estate Market
        • Multiple tuitions in the school
some trends relate to the age of the school
Some trends relate to the age of the school
  • Younger schools which rely almost completely on current parent and grandparent giving felt the downturn in the market
  • Elementary schools felt both the downturn in enrollment and giving – families feeling that a public option would be “acceptable” for a younger child
is the bucket of dollars smaller
Is the bucket of dollars smaller?
  • According to the Federal Reserve
  • The median household lost nearly 39% of its wealth from 2007 to 2010
  • Income among the richest 10% of Americans fell 7.7%
slide6
Yet …….
  • In 2010 there were 15 gifts of $50 million + to higher education
  • In 2011 there were 6 gifts of $50 million + to higher education
  • No data for independent schools
anecdotally
Anecdotally………………..
  • Donors of mega gifts are giving – for them the market volatility is the “new normal” and they are moving on
  • Traditional major gift bands (six figure gifts) are more problematic – they are worrying about retirement assets, unemployed children and grandchildren and the ability to fulfill a pledge over time.
a marts lundy special report state of philanthropy 2008 to 2011
A Marts & Lundy Special Report – State of Philanthropy 2008 to 2011
  • In Independent Schools: Cash for operating support shows growth of 4% in unrestricted gifts and even more robust growth of 10% in restricted gifts.
  • Why the more robust growth in unrestricted? Shift in donor attitudes where donors favor a gift to a specific institutional priority over unrestricted annual fund appeals
same report for independent schools
Same report for independent schools
  • Cash for capital support, (FY2011 over FY 2009) has increased 16% for endowment while gifts for facilities have decreased 17%
  • Still, giving has not rebounded to the 2008 levels –despite increases
is a smaller bucket of wealth the only problem
Is a smaller bucket of wealth the only problem?
  • While the economy and re-distribution of wealth are key factors in what we are seeing, we also suggest a third factor which is impacting results and that is institutional perspectives and allocation of resources within the advancement program.
donor attitudes
Donor attitudes
  • Donor attitudes has shifted but institutional messaging and donor engagement has been slow to adapt.
  • Some schools act as if they are victims of circumstances
  • Others are defying all odds and enjoying record years
distinguishing characteristics
Distinguishing Characteristics
  • Enlightened leadership
  • Within advancement and within the school
  • Define the role you wish philanthropy to play in the life of the school
  • Invest in it
  • Volunteer Leaders in Philanthropy engage at the highest level
  • Recognize: Donors want engagement and conversation over informing and educating
are schools less of a priority for donors
Are schools less of a priority for donors?
  • Many schools are under soliciting (not enough volunteer help and the culture doesn’t support staff soliciting)
  • Schools that emphasized transactional giving suffered during the recession
        • Little identification and engagement of donors
  • Schools that presented “Ideas” which created solutions and had a positive impact on teaching and learning suffered far less – in fact, many have achieved great success in both annual and capital giving.
  • Schools that can answer the “Why?”
bottom line is value
Bottom line is Value
  • Do your donors value the contribution you are making to students and/or the community?
  • Can you illustrate that the results of philanthropy provide you with the resources to do significantly more for student learning and program innovation?
an example
An example………
  • NYC Day School
  • Institutional Expenses $32,932,000
  • Endowment 113,200,000
  • Draw (5%) 5,660,000
  • Gifts to current operating 5,025,000
  • Draw + gifts to operating 10,685,470
  • Draw/operating as % of IE 32.4%
another example
Another example
  • MA Boarding School
  • Institutional Expenses 47,103,500
  • Endowment 387,500,000
  • Draw (5%) 18,375,000
  • Gifts to current operating 5,188,626
  • Draw + gifts to operating 23,563,626
  • Draw/operating as % of IE 50%
are donors changing where they want to give within schools
Are donors changing where they want to give within schools?
  • Yes, for many, particularly within the annual fund
  • Donors want to have an impact with their gift
  • Donors want $$ directed at people and programs more than facilities
        • Great emphasis on giving which supports faculty
        • Current parent donors recognize the need for adaptation and innovation
giving to endowment
Giving to endowment
  • More likely that gifts from alumni will be directed to endowment
  • Current parents need a great deal of conversation and engagement to understand the value of endowment
  • Some donors today are believe each generation gives to immediate programming needs, not endowment
culture clashes old versus new money
Culture Clashes – Old versus New Money
  • Old versus new and more
    • Self – made wealth often wants “immediacy” and “impact”
    • Challenges
  • Non native-born donors

Lack of familiarity with mainstream American

philanthropy systems & structure

international fund raising
International Fund Raising
  • Families of current International students
        • Many boarding schools are having great success
        • There are steps to follow for success
  • International alumni
        • Involvement from graduation on is imperative
        • Membership on governing boards
schools with egalitarian cultures
Schools with egalitarian cultures
  • Resistance to high levels of recognition
  • Desire that all events are inclusive
  • Lack of culture of philanthropy
bottom line
Bottom Line
  • Three essential elements:
  • Case for support
  • Constituency that is engaged in meaningful conversation with the school
  • Catalysts – Staff and volunteers who move the program forward