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Building Fundraising Cultures in Business Schools: Trends and Opportunities

Association of Business Schools Conference 2005. Building Fundraising Cultures in Business Schools: Trends and Opportunities. Colin McCallum, Chief Executive Grenzebach Glier Europe 18 October 2005. Why People Give: A Mix Of Motivations. They are asked.

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Building Fundraising Cultures in Business Schools: Trends and Opportunities

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  1. Association of Business Schools Conference 2005 Building Fundraising Cultures in Business Schools: Trends and Opportunities Colin McCallum, Chief Executive Grenzebach Glier Europe 18 October 2005 1

  2. Why People Give: A Mix Of Motivations • They are asked. • The case, their belief in the cause, their desire to shape the charity or institution. • They have been properly stewarded, and continue to believe. • Seeking stature, acceptance. • Among peers, within the community, in their own eyes 2

  3. Motivations • Most importantly, a desire to shape the institution • Who asks: the role of leadership • Timing • Usually not for tax reasons • Guilt 3

  4. Success Factors • What are the most important factors in building success in long-term fundraising? 4

  5. The Role Of The Chief Executive • We recently carried out a major study of a range of US universities and their fundraising programmes over the past 20 and 30 years. • All interviewees in our study reported that the Chief Executive spent at least 20% of his/her time directly engaged in fundraising activities. • This typically included events, prospect cultivation, and strategic planning. • This time investment from the Chief Executive is at least 50% more than it was 10 or 15 years ago. 5

  6. The Role Of Volunteer Structures • An average of 90% of volunteer board members contribute annually. • On average, such board members contribute 22% toward the total in the most recent campaigns. 6

  7. Resource Allocation And Investment • Other findings in our study: • Adequate budget and staff, applied to the right programme areas, was universally cited in our study (across 10 universities, public and private) by all those interviewed. 7

  8. Resource Allocation And Investment • Over the last 10 years, institutions increased their total development budget by an average of 133%. • Some nearly quadrupled their budgets • Even the lowest institution’s growth was 50%. • Most of these increases funded additional direct fundraising staff. 8

  9. Resource Allocation and Investment:Study Findings • Investment in development services (ICT, research, donor stewardship) was important to growth. • Investment in this area led to greater capability for strategic fundraising, allowing fundraising staff to focus on prospects of the highest potential. 9

  10. Resource Allocation and Investment: Study Findings • Increased staff has led to disproportionate positive growth in philanthropic support. • On average, staff increased 69% between 1992 and 2002, while philanthropic support increased by 83%. 10

  11. Mixed Fundraising Model • Annual Giving is about changing people’s behaviour and getting them to think philanthropically about your organisation. • Gifts are an outcome of having done this successfully. • Planned Giving: most efficient fundraising you will ever do! • Most focus should be on major gifts activity and building the ‘pipeline’ 11

  12. Building Sustainability • Growth has more to do with donor retention (renewals) than new donor acquisition. • Keep the donors you have! • Key to building integrated fundraising and communications models is to focus staff energies on developing the core of ‘Blue Chip’ donors giving to your institution. 12

  13. Larger Donors:Often begin with very modest contributions • 31% of the donors gave less than $25 for their first gift • Over 75% of the donors gave less than $250 for their first gift 13

  14. Larger DonorsBegin as smaller donors to annual funds, but they are loyal • 27% of donors gave each year between their first gift and their $10k gift • 75% of donors gave in 60% of the years between their first gift and their $10k gift 14

  15. Giving By Individuals (USA) 1962-2002 183.73 139.21 $ inbillions 124.20 112.45 102.19 88.80 87.71 83.35 72.21 87.70 58.90 64.53 47.63 Current dollars 29.55 19.37 Inflation-adjusted dollars 9.89 13.41 1962 1967 1972 1977 1982 1987 1992 1997 2002 15

  16. Unusually Successful Programmes • Objectives are linked to the institution’s long-range strategic plan • A single-minded strategic focus on raising sights • A significant investment in the cultivation of donors • Commitment from the institution’s chief executive and other leaders 16

  17. Unusually Successful Programmes • A dynamic partnership with leadership volunteers • Meaningful involvement from internal partners • Experienced staff who are proactive in volunteer and donor contact • A demonstrable commitment of new development resources 17

  18. AACSB International • The Association to Advance Collegiate Schools of Business • A not-for-profit corporation of educational institutions, corporations and other organizations devoted to the promotion and improvement of higher education in business administration and management • AACSB business school survey carried out in conjunction with Grenzebach Glier & Associates • Eight schools across the United States 18

  19. AACSB Development Facts • 13.7% of annual operating funds in 2002-2003 came from private gifts and contracts (6.2%) and endowment income (7.5%) • Median endowment for 387 AACSB Business Schools in a survey was $3.5 million • Median reported annual gift income was $1.1 million • 90%+ solicit support from alumni via the telephone • Less than 20% report alumni participation rates greater than 20% 19

  20. AACSB Development Facts continued • Development activities are centralised with dedicated staff for the business school in 50% of cases • Another 25% have centralised development activities, but without dedicated staff for the business school • The remaining 25% have their own business school development office 20

  21. EndowmentMarket value 2003-04 (in millions) $435.5 Enrolled students Alumni Operating budget (in millions) 999 9,900 $99.99 $242.0 $216.0 1,455 33,000 $54.38 $145.8 5,226 61,000 $42.48 4,251 77,000 $85.55 $118.4 $100.8 $100.8 4,036 78,000 - 648 6,700 $48.10 2,765 36,000 $99.73 461 7,600 $37.41 $61.3 6,131 56,000 $43.68 $42.2 $41.7 A C D Cohort E Cohort F G H B Mean Median 21

  22. EndowmentPer enrolled student $373,457 Enrolled students 9,999 $316,269 $119,367 $42,103 $37,943 $29,634 $18,818 $8,068 $9,809 4,036 648 2,765 461 6,131 1,455 5,226 4,251 A C Dh Cohort E Cohort F G H B $242.0 $216.0 $145.8 Mean $100.8 Median $61.3 $42.2 $41.7 $118.4 $100.8 22

  23. EndowmentPer alumnus $36,119 Alumni 9,999 $19,440 $9,004 $6,001 $5,583 $1,799 $3,720 $1,856 $691 $542 56,000 33,000 61,000 77,000 78,000 4,036 6,700 36,000 7,600 A C D Cohort E Cohort F G H B $435.5 $242.0 $216.0 $145.8 Mean $100.8 Median $61.3 $42.2 $41.7 $118.4 $100.8 23

  24. EndowmentAs a ratio of annual operating budget 5.03 % Operating budget (in millions) $99.99 3.90 % 2.29 % 2.31 % 2.17 % 1.65 % 1.13 % 0.99 % 0.49 % 78,000 4,036 $48.10 $99.73 $37.41 $43.68 $54.38 $42.48 $85.55 A C D Cohort E Cohort F G H B $435.5 $242.0 $216.0 $145.8 Mean $100.8 Median $61.3 $42.2 $41.7 $118.4 $100.8 24

  25. Total Private SupportThree year average, 2002-04 (in millions) $46.0 $15.2 $15.6 $13.1 $11.2 $10.7 $10.1 $10.2 $10.0 $8.8 4,036 78,000 A C D Cohort E Cohort F G H B Mean Median Note: Wharton-UPenn figure based on 2004 data only 25

  26. Total Private SupportSources of support (in millions) Indiana Kelley reports corporate and foundation giving in one source category; Penn State Individual Giving data includes large gifts from Alumni with family foundations as well as gifts from Donor Advised Funds. The Foundation Giving figure only includes gifts from independent, operating and community foundations. $15.2 $13.1 $11.2 $11.2 $10.2 $10.2 $10.1 $10.0 $8.8 Alumni Non Alumni Corporations Foundations Other $9.000 - $0.950 $0.050 - $9.210 $0.801 $2.310 $0.314 $0.509 $7.243 $7.243 $0.437 $0.268 - $6.109 $1.402 $1.842 $1.074 $0.287 $2.918 $0.770 $1.044 $3.844 $0.203 $6.371 $0.801 $2.143 $0.438 $0.295 $2.784 $3.602 $2.790 $0.561 $0.387 $4.966 $0.538 $3.219 $1.409 $0.049 $7.777 $1.303 $2.143 - - 4,036 78,000 C D Cohort E Cohort F G H B Mean Median 26

  27. Total Private SupportSources of support as a percentage $15.2 $13.1 $11.2 $11.2 $10.2 $10.2 $10.1 $10.0 $8.8 Alumni Non Alumni Corporations Foundations Other 90.00% - 9.50% 0.50% - 69.12% 6.01% 18.09% 2.75% 4.04% 47.43% 47.44% 2.60% 2.53% - 56.92% 13.05% 18.34% 8.90% 1.26% 33.23% 8.77% 11.90% 43.79% 2.31% 63.04% 10.68% 19.26% 2.64% 0.28% 30.51% 29.98% 29.26% 7.10% 3.15% 47.52% 4.85% 32.54% 14.54% 0.55% 65.04% 12.59% 22.37% - - 4,036 78,000 C D Cohort E Cohort F G H B Mean Median 27

  28. Total Private SupportPer Business School Alumnus, 2004 $2,656 78,000 $1,493 $748 $590 $469 $15.6 $356 $243 $225 $138 $170 $10.7 $46.0 $10.0 $13.1 $15.2 $8.8 $10.1 $10.2 $11.2 A C D Cohort E Cohort F G H B Mean Median 28

  29. Development budget and fundraising staff Three year average, 2002-04 (in millions) $7.0 Professional Support Volunteers 9.0 9.0 99 78,000 $2.5 4.0 3.0 200 11.0 3.5 155 $2.3 $1.5 10.4 9.9 100 $1.4 $1.4 4.0 3.0 192 8.0 6.0 24 14.0 12.0 40 5.0 8.0 36 8.0 2.0 90 $0.9 9.0 4.8 78 10.0 3.0 65 $0.7 A C D Cohort E Cohort F G H B Mean Median 29

  30. Cost of fundraisingCost to raise a dollar, 2004 Total private support (in millions) Total development budget (in millions) $9.99 $9.99 $0.19 $0.15 $0.15 $0.14 $0.14 $0.13 $10.7 $1.4 $15.6 $2.35 $0.08 $0.08 $46.0 $7.0 $10.0 $1.5 $13.1 $2.5 $10.1 $1.4 $10.2 $0.8 $11.2 $0.9 78,000 4,036 A C D Cohort E Cohort F G H B Mean Median Note: Wharton-UPenn figure based on 2004 data only 30

  31. Return on investmentOver three years, 2002-04 13.29 12.00 $9.99 $9.99 Total private support (in millions) Total development budget (in millions) 8.51 7.28 6.67 $15.6 $2.35 6.98 6.57 5.26 $10.7 $1.4 $46.0 $7.0 $10.0 $1.5 $13.1 $2.5 $10.1 $1.4 $10.2 $0.8 $11.2 $0.9 4,036 78,000 A C D Cohort E Cohort F G H B Mean Median Note: Wharton-UPenn figure based on 2004 data only 31

  32. Association of Business Schools Conference 2005 Building Fundraising Cultures in Business Schools: Trends and Opportunities Thank you! Questions? cmcallum@grenzglier.com 18 October 2005 32

  33. MBA Alumni Annual Giving Rates Source: Business Week Survey of MBA Programs 33

  34. MBA Alumni Engagement and Giving Source: Business Week Survey of MBA Programs 34

  35. Source: Business Week Survey of MBA Programs 35

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