A time for giving?
The case for fundraising
Boards and Heads of both not-for-profit and for-profit schools often wonder if they should be actively engaged in fundraising, or need to establish a Development Office. Frank Opray considers the rationale for fundraising and the key objectives for a Development Office.
The big question
All schools, both not-for-profit and for-profit, have an insatiable appetite for capital developments and scholarship funding. And so they should if their Boards are pursuing a forward looking strategic plan.
The question often asked therefore is: “will our current and past parents and our alumni give to our school”? The answer tends to be a combination of answers to three questions
Do we have sufficiently attractive and viable projects for financial support?
Are our parents and alumni passionate about our school and willing to “give back”?
Do we have a structure to drive and oversee the asking and giving process?
The answer to the first two questions is normally ‘Yes!’ However, finding an answer to the third is usually more difficult.
The role of giving
It is not suggested that giving alone will fund major capital works nor scholarship programs, but it certainly can be a helpful supplementary source of financing as the notion of “giving back” is introduced to school constituencies.
The owners or Boards of for-profit schools often suggest that parents and alumni will not give to capital works programs noting that potential donors will be reluctant to see their gift on someone else’s balance sheet – and they may be right. However there remains a significant opportunity for these potential donors to give to a scholarship program, which can have its own independent trustee structure, thereby allowing talented but financially handicapped students to attend.
Thus, there is justification for all schools to seek philanthropic support and this raises the question of how they should go about it.
Development Office: an investment
A Development Office is normally tasked with the function of planning and overseeing this process involving a judicious mix of donor research, ‘friend-raising’ and fundraising. In establishing such an office, the Board needs to adopt the view that this is an investment rather than a cost, given that it will generally take some time to reach breakeven.
It is widely accepted that friend-raising must precede fundraising but less well acknowledged is that donor research is the logical starting point. The more a school understands about its constituencies the more effective its fundraising will be.
Friend raising will take differing forms depending on the nature of the relationship between the target group and the school. Current parents are best addressed via functions which relate to the position of their child within the school, whereas reunion functions and networking constitute the most effective ways to engage with alumni.
Four elements of a fundraising campaign
Once appropriate friend raising is in place it is time to devote an increasing amount of the Development Officer’s time (full or part-time) to fundraising. A well-rounded fundraising program is likely to comprise four key elements which, if appropriately managed, should be mutually supportive. They are:
(i) Annual Giving – where modest donations are sought from all possible members of the school’s constituency on an annual basis.
(ii) Major Gifts – larger gifts sourced from targeted donors, including corporates, and achieved through direct asking by the Development Officer, possibly in conjunction with the Head and/or the Chairman of the Fundraising Committee or Foundation.
(iii) Bequests /legacies – these should be the subject of targeting amongst more senior alumni and possibly retired staff. Giving to an institution via a bequest can result in the donor making a comparatively large gift and the financial impact for a school can be substantial.
(iv) Special Events – These generally serve as both friend raising and fundraising activities and, provided sufficient time is devoted to planning and creativity, they have the ability to raise useful funds for specific programs.
Provisioning and supporting the Development Office
To operate effectively the Development Officer must work out of presentable quarters, remembering the positive profile which must be projected to potential donors. This should imply that he or she will be adjacent to the “front door” of the school, adjacent to the Head.
Secretarial support, perhaps part time at the outset, is vital if the development function is to achieve its goals. It is vital in the early stages as the highly labour-intensive task of establishing a reliable data base proceeds.
Reporting relationships and opportunities for adequate communication are also vital given the involvement of the Development Officer with senior and potentially influential members of the school community. This implies that he or she should report directly to the Head and have observer status at the Board table. Potential major donors will want to deal with someone who has demonstrable and appropriate status.
Expectations of the Development Office
A rule of thumb is that an effective Development Office, (if involved in fundraising on a full-time basis), should be generating revenue at least five times direct costs after a five-year period. This excludes receipts from bequests which cannot be budgeted for with any certainty. The key variables which will impact on this include the age and socio-economic status of the school and the support given the function by the Head and the Board.
A long term process
It needs to be recognised that Development is a long-term process and success is most likely to result from the careful nurturing of relationships which cannot be achieved overnight. In the long run if it is the financial independence of the school which is at stake, (or development of a scholarship program in the case of a for-profit school), then time spent on getting the process right will be a sound investment.
Through Washington Services, Frank Opray works with international schools helping them establish or consolidate their fundraising operations. He can be reached at firstname.lastname@example.org