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May 5, 2006 5:08 pm

Clear goals make for feelgood fundraising

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James Curvey, former president and chief operating officer of Fidelity Investments, is a proud and munificent Wildcat. Curvey, who grew up in rural Pennsylvania and graduated from Villanova in 1957, has over the last five years given more than $6m to his old university for scholarships and other programmes.

Today, as vice-chairman of the school’s $300m capital campaign, Curvey – who officially retired from Fidelity in 2002 – is trying to encourage his fellow alumni to be as generous. It is not always an easy task. Indeed, the irony that he keeps an office in downtown Boston, just over the river from the wealthiest college in the US – Harvard University – is not lost on him.

“The Harvards of the world have a culture of giving. But Villanova hasn’t always had that,” he says. “It was primarily a small Catholic school, a place you went to get a job.

“We’re trying to change that culture now,” he says. “It’s a methodical process. It takes a lot of time and effort. For every five calls you make, you may get one hit.”

During the 2005 fiscal year, US colleges and universities collectively raised $25.6bn in private donations, with the lion’s share of that money coming from alumni and foundations, according to the Council for the Advancement and Support of Education (Case). Giving is expected to grow – Case projects that within 10 years donations to educational institutions will have doubled to more than $50bn.

Yet that staggering statistic alone does not necessarily make Curvey’s job any easier. Last year the increase in giving to the top 10 fundraising institutions accounted for half the total growth in higher education donations. Stanford University, for instance, raised $603m and Harvard University raised $589m. Harvard’s endowment is more than $25bn and Stanford’s is over $12bn; Villanova’s endowment, by comparison, is $238m. In education, the rich get richer.

John Lippincott, president of Case, says he is not surprised it is the wealthiest schools that tend to raise the most money. “Success is a good thing in fundraising,” he says “Donors want to invest in an institution they feel will be around for a long time and will be doing great things in the world. Large gifts tend to attract large gifts. They raise the bar and that is why successful institutions continue to be successful.”

But Lippincott concedes that educational fundraising is a big job even for the Harvards and Stanfords of the world. The biggest challenges, he says, are determining who among the institution’s prospective donors is most able to give, and presenting a case that inspires them to do so. In other words, finding out who to ask, and asking.

According to Lippincott, staff are the single most important component. “If you have staff to make visits to prospective major donors you are likely to be successful,” he says, adding that gifts officers at universities should ideally be soliciting 100-200 gifts a year. “If you don’t ask, you don’t get.”

In addition to significant gift officers, most universities employ full-time “prospect researchers” whose primary job is to find out financial information about possible donors, according to James Gillespie, consultant for CommonWealth Consultants in Philanthropy, which specialises in fundraising. “Most of what they find out, you’d be surprised to know is public,” he says.

There are other, more subtle ways of discovering a donor’s financial capability. “[As a fundraiser] I have lunch with prospects all the time,” says Gillespie. “You find out what’s important and interesting to them. They are not going to tell you what is in their bank account but they will probably reveal that they love to travel and spend a lot of time in Europe, or that they own a second home in Naples. That can be helpful financial information.”

Most institutions have limited resources for fundraising and this can create a tension between spending time and money securing large gifts and broadening the base of donors. “Ninety per cent of the money you raise comes from 10 per cent of donors and that does cause an institution to focus on the major donors,” Lippincott says.

The next challenge is providing the motivation to give. After all, it would seem difficult for a wealthy university to make a case for donation when many other deserving charitable organ­isations appear to have a greater need. If donors start contrasting Harvard Business School students with, for example, refugees in Darfur, the job of fundraising gets harder.

Take Yale University, which has an endowment of more than $15bn – the second largest of any school in the US. Inge Reichenbach, Yale’s vice-president for development, says Yale’s advantage is that the individuals who support it tend to be alumni and parents who are predisposed to give. “They had a good experience and they want to perpetuate that for others,” she says.

Reichenbach also notes that – similar to other universities – the bulk of Yale’s endowment is earmarked for specific uses. “This leaves two means for supporting new ventures: tuition – which is already very high - and new gifts,” she says. “New gifts are really the only way for the university to invest in its future – to build a new building or start a programme – to make sure it remains at the forefront.”

Martin Shell, vice-president for development at Stanford, says donors tend to make gifts for personal reasons. “They have a real interest in a particular department or school or they want to invest in a certain area,” he says. “A lot of people give out of a sense of obligation or generosity – a sense of ‘I benefited, so I want to give back.’”

According to Case, more than 90 per cent of gifts to universities are restricted, meaning they are ear-marked for a specific purpose – financial aid, professors’ salaries, scholarships, buildings or equipment.

Last year, for example, Pierre and Pam Omidyar – founder and chairman of Ebay and founder and chairwoman of HopeLab, in Palo Alto, California, respectively – donated $103m to Tufts University in Massachusetts for microfinance investments. The Omidyars, both Tufts graduates, stipulated that the money should be used for small loans to businesses in developing countries, and direct income from the loans should go to endowment, scholarships, and other programmes.

A winning sports team can also be a great motivator for givers. The Villanova men’s basketball team had a great run this spring – making it to the Elite Eight in the NCAA championship – and John Elizandro, vice-president for institutional advancement, organised several successful fundraising events on the back of it.

“I can tell you first-hand that it raises the level of awareness and the level of interest in the school,” he says. “A successful sports team also creates good feelings and goodwill and a sense of pride in the school. These are all things that make the environment more conducive to fundraising.”

Then again, sports and success are relative. Last March, Helen Snell Cheel, a philanthropist who died at the age of 100, left $27m to Clarkson University in Potsdam, New York. A portion of the bequest paid off previous pledges she had made to improve the school’s hockey arena. Cheel was not an alumna of Clarkson but she was a diehard hockey fan who attended many of the university’s home games. She made it a point to tell Clarkson’s president when she thought the hockey team was underperforming.

Like other charities, universities put on standard fundraising events such as black-tie dinners and golf tournaments. They also invite alumni back to campus for special lecture series or big football games against old rivals. These events are meant to inspire nostalgia and make alumni want to help a younger generation.

“Cultivating donors is an art,” says Gillespie. “It’s all about making people feel wonderful about what they give. You want them to have an honest tear in their eye because they’re so happy.”

At Villanova, Mr Curvey has high hopes for his alma mater’s capital campaign. “The idea of giving back is something that is growing,” he says. “You can almost feel it. The number of people that are millionaires in this country has skyrocketed and I believe there are a lot of worthy institutions well positioned to take that money and put it to work for future generations. Villanova is getting in the game.”

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