Foundation Strategic Planning in a Time of Uncertainty

By Doug Goldenberg-Hart December 18, 2020 December 21st, 2020 Blog Post
Blog Post

The operational uncertainty unleashed by the COVID-19 pandemic creates stress for everyone in higher education, not least foundation leaders, board members, and staff. This clear-eyed reality infused the peer conversation among the AGB Council of Foundation Leaders on December 16. College and university operating funds are being hit hard with the twin impacts of reduced tuition/fee revenue and higher operational costs (online instruction, COVID-19 testing, and campus cleaning), and foundations are expected to help close the gaps with emergency fundraising for operations and students support.

Moreover, the day-to-day operations of institutionally related foundations themselves are affected. Many board and committee meetings are now virtual events via video conferencing platforms. And the health protocols on campuses have moved many foundation staff to remote work and/or limited on-site staffing. These operational shifts present their own sets of challenges for building board and team camaraderie and sustaining staff morale. Numerous foundation leaders mentioned “Zoom fatigue” and staff well-being as an utmost concern, and one mentioned bringing in an expert to talk with staff about stress management and mental health.

In spite of these significant challenges, foundations are turning out major fundraising successes, enthusiasm among donors for COVID-19 research and mitigation projects, and new scholarship support at this time of great need. These leaders, along with their volunteer board members and staff, are responding to the urgency of now. Their commitment and resilience are impressive.

This intense period of crisis management, however, needs to be balanced with a clear vision forward. The stress and fatigue of the present must be tempered with the necessary preparation for the future—with strategic plans that set the course beyond 2020-2021’s challenges.

Pivot Points

Not everything in the environment is uncertain. The pandemic will end, although the negative effects on higher education finances and business models will linger beyond. It will take years for state finances and higher education funding ratios to recover—if they ever reach the same levels of public support again.

These new financial realities require that foundation boards and chief executives renew their efforts to pivot to the future. We heard from foundation leaders about several major points of emphasis for their near-term and midterm planning:

  1. Fundraising—Foundation leaders have a sober understanding that fundraising goals and targets will need to adjust the themes and messages to account for the operational priorities of the host institution in the near term. This might take the form of shorter, more targeted campaigns that generate more unrestricted gifts, or midcourse adjustments to a comprehensive campaign already underway.
  2. Alignment—One foundation leader captured the essence of the challenge to funding institutions going forward: “It’s not an endowment performance crisis. It is a university revenue and business model crisis.”
    When charting the path forward, foundation leaders must help lead the institution’s leadership move toward the business model changes necessary to address the threats to financial stability. Philanthropy and endowment spend rates alone cannot address the underlying shifts in the sector. Change management strategy has to be hashed out within the institution/foundation leadership interactions, and both the governing and foundation boards must be aligned around the institution’s strategic goals and work together to share the path forward with stakeholders.
  3. Endowment Management—Early in the onset of the pandemic, investment returns plunged, threatening endowment payouts. But markets recovered and we are not facing endowment performance issues so much as urgent operational funding gaps that are driving requests for larger endowment spend rates. Foundation leaders are responsible for honoring donor intent and preserving intergenerational equity for endowment beneficiaries. The near-term and midterm task will be about communicating these obligations to donors and future beneficiaries while working with institutional leaders to chart strategies to address the pressing financial challenges institutions and students are facing now.

The AGB Council of Foundation Leaders will meet again next quarter, and AGB members will have the opportunity to dive into these topics during our upcoming Foundation Leadership Forum (January 25–27), Board Professionals Conference (April 6–8), and National Conference on Trusteeship (April 12–14). Registration for these virtual events is now open, and I look forward to seeing you there.

For foundation leaders and boards that may feel they would like a strategic planning audit or would like a full assessment of what should be in their strategic plan, remember that AGB Consulting can assist with strategic planning. Visit https://agb.org/agb-consulting/ to learn more.

AGB thanks our partner Commonfund for its support of the Council of Foundation Leaders.

 


Doug Goldenberg-Hart is director of AGB Publications.

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