Written by Lori Stirling, SVP of Advancement Strategy at Affinaquest, in collaboration with Terry Callaghan, Senior Director of Management Consulting at Zuri Group
The fundraising landscape for educational institutions is evolving with changes in IRS rules and guidance from organizations like US News and World Report and CASE. The traditional approach of relying on alumni loyalty to drive donations is no longer sufficient. Institutions need to adapt their strategies to align with interest-based philanthropy, focusing on engaging alumni, students, and friends, understanding their passions, and building a strong pipeline for major gifts.
The key to long-term success is to build a strong major gift program, which starts with a robust prospect pipeline. This involves not only attracting new donors but also retaining and engaging long-time supporters. The key to building that pipeline is to engage with prospects and donors; listening to and understanding donor interests will enable personalized stewardship, ensuring donors feel connected to the impact of their contributions.
Some institutions may be tempted to use gimmicks like automatic small gifts with event registrations to boost donor counts. However, this approach misses the mark in terms of long-term engagement. Institutions should prioritize fostering a genuine connection with donors, helping them understand how their donations contribute to the social good and allowing donors to direct their contributions to specific causes about which they care.
Similarly, day of giving and specialty programs can be valuable tools in engaging alumni and generating enthusiasm for giving. These time-bound initiatives create a sense of urgency and community spirit among alumni, resulting in increased participation and contributions. However, they should be part of a broader engagement strategy to be truly effective.
To ensure continued support, institutions should assess and prioritize donor retention and engagement efforts. Regular personalized communication and interactions, along with demonstrating the impact of donations are crucial in building lasting relationships with donors. This includes organizing events that connect alumni with current students, highlighting important research and community initiatives and showcasing social impact successes resulting from alumni contributions.
As institutions move toward more cause-based fundraising, they should expand their donor population scope to include non-alumni. By identifying community leaders and other individuals with a strong passion for certain social causes and research, institutions can expand their prospective donor pool. The key is to align individuals with important college/university initiatives. Research in areas such as climate change, mental health and autism are examples of cause-based initiatives that interest a larger donor base than alumni.
Given the growing emphasis on social impact, how can college rankings respond to donor interests? Washington Monthly’s Annual College Guide and Rankings has addressed this in several ways through their unique method of ratings based on contributing positively to society and the public good. This includes factors such as social mobility, research, and providing opportunities for public service. While this report has been published annually since 2005, it is of note that it only recently has gained public attention.
Where the US News rankings have been based on factors such as SAT/ACT scores, rank in high-school class, acceptance rate and “peer evaluation”; Washington Monthly rankings are based on social equity and impact. This includes factors such as number of Pell graduates, Pell ranking, net price of attendance for families earning below $75,000, earning performance ranking (ROI) and service opportunities. They also produce a list of “Best Bang for the Buck” institutions which assist low and moderate income students earn marketable degrees.
All of these factors point to the turning tide of interest in social-equity, relevant research and outcomes. As such, donor dollars are increasingly following these interests. It behooves institutions to increase public awareness on their positive social impact and timely research. This, in turn, will increase donor interest and dollars raised for support of worthwhile initiatives.
Stay tuned for our next in our series of articles on the changing outlook for philanthropy where we address the impact of inflation and the importance of student philanthropy.