A Question For Michael J. Worth

How is fundraising for public higher education changing?

By AGB    //    Volume 20,  Number 2   //    March/April 2012

Public colleges and universities face ever greater challenges in this economy to increase sources of private support and philanthropy. Michael J. Worth, author of Foundations for the Future (AGB Press, 2010), answers questions about what makes for an effective advancement program and how boards can play a role.

What are some of the new realities of public higher education fundraising?

Overall, public funding of higher education has not kept pace with enrollment growth and inflation over the past three decades. Cuts during the recent recession were particularly devastating in many states. Many people think we are now in a new normal, in which private support—philanthropy—will be essential to the quality of public higher education.

In the past, public institutions raised private funds to support growth and improvement. Now gift support is becoming essential not only for growth, but also even as a component of current operating budgets. There are wide variations among institutions. At some major public research universities, private support is now about equal to, or even greater than, state appropriations. And among the top 20 universities in terms of fundraising revenue, about half are public and half are independent. But for many public institutions, building fundraising capacity is still a relatively new—and urgent—priority.

How has the role of the affiliated foundation changed to meet those new realities?

Most institutionally related foundations were originally passive vehicles for receiving and managing private support, but most now take an active role in fundraising. Many are restructuring and re-evaluating their role in order to increase their capacity to provide fundraising leadership.

Recent research by AGB suggests that this is a pronounced trend: Only 14 percent of foundations reported that they do not engage in fundraising at all and only receive, invest, and manage funds. The others are actively engaged in fundraising. Many are interdependent with their institutions and support fundraising directed by the institution’s staff. But more than a third of foundations—35 percent—are almost entirely responsible for the direction and execution of fundraising for their institutions.

What is the role of foundation board members on the fundraising team?

Governing boards of public colleges and universities do not necessarily include individuals who can provide or secure private support. That role more often falls to the foundation’s board of directors or trustees; the ability to give and help with fundraising is increasingly among the criteria by which they are selected. Members of the foundation board can provide fundraising leadership through the example of their own giving and through active participation in the identification, cultivation, solicitation, and stewardship of other donors. Of course, they are part of a fundraising team and this involvement should be undertaken as a part of a coordinated plan, working with the foundation’s chief executive, the institution’s chief advancement officer, the institution’s president, and other academic leaders.

How can governing boards and foundation boards best work together to meet fundraising goals?

The governing board has fiduciary responsibility for the institution, and that includes approving academic and institutional goals. The foundation may provide important financial resources toward achieving those goals. If its members are to take the lead in fundraising, they should be part of the process of establishing the priorities. But the foundation board needs to be respectful of the governing board’s ultimate responsibility for the institution. So there must be close coordination and communication. The institution’s chief executive and the foundation’s chief executive play a major role in providing that coordination. In some instances, foundation boards and governing boards have joint planning committees, and it is common for campaign committees to include members of both boards, helping to ensure that fundraising is a partnership.

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