When I was in school we had slide rules (yes, slide rules) with covers that said “Chemistry is chool” and “Physics is phun.” With apologies to Isaac Newton, here are my Laws of Phundraising Motion.
First law: A fundraising strategy in motion tends to stay in motion (“inertia”).
Second law: The effectiveness of a fundraising strategy is equal to the appropriateness of its scope multiplied by the consistency with which it is applied.
Third law: When one school constituent group exerts a force on a second school constituent group, the second group simultaneously exerts a force equal in magnitude and opposite in direction on the first group.
Fundraising can be defined narrowly or broadly. When people hear “fundraising” they generally think about cash donations. I think of it more broadly, as part of what some call “advancement.” All of the functions of an independent school are inextricably linked, but the pieces that fall under advancement are often understood to include annual giving, capital campaigns, endowments & planned giving, alumni and parent relations, communications, public relations, and admissions. Tugging at these pieces are the interests of parents, teachers, staff, students, alumni, charitable foundations, third-party vendors, and the school’s budget. When those interests conflict, the first and third laws tend to come into play, and the second law is tested.
Why Do People Give?
The message independent schools often send to parents and other donors is that giving is necessary because tuition does not cover the cost of running the school. While this message is easy to understand and used by many schools, I wonder if it applies a short-term strategy to put a band-aid on a long-term issue. Anecdotal evidence indicates that many of the most consistent and highest-dollar donors give not because of guilt or to fix a budgetary shortfall, but because they want to give based on their relationship with the school. They are conditioned to believe their donation is a good investment. They are giving to strength, not to weakness.
Implication: to thrive indefinitely a school needs to exhibit institutional excellence and be perceived as a good investment.
How Are Heads of Schools and Staff Evaluated?
While it is important to develop and follow a strategic plan, in my experience it is hard to measure success. Therefore we (meaning organizations in general) measure that which is easy. We measure annual giving, event revenues, and similar easily quantifiable things. Heads and development directors feel pressure to meet annual targets because their jobs depend on it. Heads create budgets and boards review and approve the budgets based on those targets.
But what if the wrong thing is being measured? What if we reach our targets but the targets aren’t ultimately relevant to success? How does one create and measure institutional excellence? Excellence is not an annual budget target. It is an ingrained and sustainable condition not measured strictly by budgets. Among the potentially measurable factors are enrollment, attrition, student satisfaction, teacher satisfaction, staff satisfaction, community satisfaction, college satisfaction, employer satisfaction, alumni satisfaction, endowment giving, and major gifts.
Even when these factors are measured, are employees willing to risk their fate by focusing on long term success instead of short-term easy-to-measure targets?
Implication: to achieve and maintain institutional strength, schools need to understand and measure success on issues that affect institutional strength.
Volunteerism in an evolving society
In 2008 I began to think more seriously about the role of volunteers and volunteer leaders in a fluctuating economy, especially considering the trend toward dual-income and single-parent households. I believe the highest and best use of scarce volunteers is to advance the school’s mission and contribute to the vibrancy of school life; in short, to nurture their love of the school and help volunteers become the evangelists (for the school, not for a religion) they are already conditioned to be. I worry that the traditional independent school volunteer system does not achieve that goal.
I observed then as I do now that the conventional volunteer system ultimately results in burn out and dissatisfaction of volunteers and staff, especially as it relates to fundraising. Volunteers step in because they perceive a need that only they can fill, and schools welcome their efforts because it is free labor and theoretically improves the school’s finances. I’m not sure that theory and reality are aligned.
By truly understanding what it wants from its volunteers, particularly when it comes to advancement, the school could improve its institutional strength. How many things do volunteers do because “it’s always been that way” rather than because it improves the school? Are volunteers being put in a position where they think they have responsibility for the success or failure of an event, but that ultimately the school does not want to place that responsibility on volunteers? Does this place various groups needlessly in conflict? Are expectations clearly communicated and understood? Should advancement volunteers be primarily involved in friendraising or fundraising?
One could make the argument that many school fundraising efforts have close to a net zero short-term financial impact (after considering the costs of events, school labor and facilities, and the opportunity costs of using volunteers and item donors for fundraising purposes rather than program or recruiting purposes). If that is true (and I think it might be), then the school could improve by re-directing its fundraising efforts toward long-term results, primarily aiming for sustainable institutional strength rather than patching annual budget gaps. This would require a major inward look at the role of friendraising and fundraising in achieving institutional strength. It would also help the school answer the question of how to best structure its major events.
Implication: if the use of volunteers in the current fundraising model results in burn-out, frustration and decreased evangelism, have the potential short-term financial gains been worth the long-term cost?
What is success?
Many independent schools are wonderful places where faculty, staff, and students dare to dream of excellence and lifetime learning. Despite their weaknesses, they are strong. I believe that the single most important traditional benchmark of success is enrollment. A full school is a healthy school. A full school can make decisions based on strategy rather than necessity. A full school can be great, and can attract interest and investment from those who want to sustain greatness. A full school attracts and keeps the best faculty and staff. A full school with pent-up demand is less susceptible to natural economic and demographic fluctuations. A full school is worthy of the support of students, parents, alumni, alumni parents and the community. A full school is well-positioned to become endowed with the goodwill and financial resources to be sustainably excellent.
If all of the above is true, then it seems that the best use of scarce volunteers is to put them in positions where they contribute to the satisfaction of current families and increase the demand from potential future families. Anybody who has done classroom volunteering for young children knows that it brings joy to your heart. It brings out the best in you and makes you an evangelist for the school. Anybody who has volunteered at an admissions event knows the pride that comes from answering questions from new families. Anyone who has been to division or school graduations or student performances or donor appreciation events knows the sense of community they engender, and how you remember why all the effort has been worthwhile. You tell each other, you tell your friends, and you can’t wait for everyone you know to want to be part of that school’s community. You freely give of yourself (and sometimes of your wallet) not because of a budget shortfall, but because you want to. You are a member of the school family for life, not a burned out volunteer whose commitment ends when a student graduates or a project is over.
Would re-direction of staff and volunteer effort toward friendraising result in less fundraising? Perhaps in the short term. But truly successful independent schools need to think about whether they will remain permanently relevant, and I believe future generations would be well served by the current generation considering fundraising and volunteerism messages and models that foster sustainable institutional strength.
Implication: strength is best sought and measured over decades.
Annual Giving and the Resistance to Change
After I shared some of these ideas with a friend last year, he assumed I had read a controversial book about school financing called “Mind the Gap.” I hadn't, but now I have. Written by the Headmaster of one of New York’s larger private schools, “Mind the Gap” expresses in blunt language the author’s opinion that schools should learn to live on tuition alone, with tuition paying for annual operating costs and all fundraising being used to enact long-lasting or permanent change (such as building construction). His operating philosophy is tuition is for the present, voluntary giving for the future. He views the use of fundraising for annual operating expenses as deficit financing that serves little purpose other than to leave the school perpetually in the hole, and he thinks annual fund goals are never determined by the amount of need, but always by the amount of wealth in the community being solicited. He writes,
”Deficits” play essentially the same role in city, state, and federal budgets that “annual funds” play in private school budgets. With only superficial differences, annual funds have the same negative effects that deficits have on governments on all levels; each lead equally to over-spending and waste, and each puts the enterprise in question, in hock to the future. Annual funds, just like our federal deficits, pass on the liability largely to future generations. Moreover, to carry the analogy a step further, both annual funds and government deficits continue to grow, accumulating debt upon debt until one day – in the future of course – these unacceptable debt loads can no longer be sustained.
[Private schools and the federal government] each begin the fiscal year with a significant deficit, and each assumes that this way of operating is both normal and without adverse consequences. However, neither has any clear notion as to how much better off each would be if only it were to operate within the constraints of its respective income: tax revenues in the case of the federal government and tuition in the case of private schools. (pages 166-167)
One of the most interesting takeaways I had from my conversation with Dr. Soghoian is that he sometimes rejects donations from new parents who come in eager to make their mark. He tells them to wait, experience the school, grow to understand and appreciate it, and then make educated investments in the school’s future. Is it possible this changes the dynamic between the school and its parents from one in which parents are told they have a responsibility to give to X, Y and Z, to one in which they give because they want to give because they see the value and are committed to the school’s success? Parents are giving to something tangible (capital) and know where their money goes, rather than filling a “gap” that has little or no long term benefit. Psychologically and in reality, the school and the parents are working together. Does this condition them to become permanent evangelists rather than just temporary holders of the purse strings?
These changes haven’t come without resistance. The first law of phundraising (inertia) is difficult to overcome, especially when the third law comes into play (for every action there is an equal and opposite reaction). “We've always done it this way” is a comforting rationale for a risk-averse institution and industry. People tend not to get fired for following precedents. Fundraising professionals understandably fear what might happen if the rules of the game change. Consulting firms and trade associations that help schools operate in the traditional manner often aren't comfortable advocating for radical change. Development offices are used to using the results of annual funds as donor research when it comes time for capital campaigns. Grantmakers and accreditation bodies are used to evaluating applicants and members (in part) based on the size and percentage participation of annual giving. Administrators, development staffs, and consultants who have traditionally been evaluated based on reaching fundraising goals, and boards that are used to having that easy-to-measure method of keeping score – all of these constituent groups have reason for misgivings.
Implication: "If it ain't broke, don’t fix it" is an often-successful management style, so it is natural to encounter resistance when asking if there is room for improvement. Respect those feelings while politely asking the question anyway.
“The effectiveness of a fundraising strategy is equal to the appropriateness of its scope multiplied by the consistency with which it is applied.”
In many independent schools I perceive there are a lot of well-meaning people trying to do what's best in all aspects of advancement. The board and administration set annual (short-term) goals, the staff tries to meet those goals, and volunteers jump in because they perceive a need. I fear the result (at times) is schools aren't fully capitalizing on the strengths of the people and the school in a way that creates the institutional strength that drives sustainable financial health.
I'd like to see an Advancement Mission against which everything can be guided/judged/prioritized, that is understood and supported not only by those who carry out the mission, but also by those who evaluate, hire, and fire those who carry out the mission. Therefore it would consider all types of fundraising, admissions, communications, volunteer recruiting and management, and alumni/alumni parent relations. It would also inform recruiting and selection of future generations of heads, division heads and professional staff. Every action and decision should be measured against whether it helps the school optimize its enrollment, not just for today, but sustainably.
If I could break it down into one overly simple sentence (as the reader thinks, "Why didn't he do that five pages ago?"), it would be this:
The mission of every advancement and volunteer effort should be to make the admissions director’s job easier.