Focus on the Presidency: University Foundation Dollars

For Now or Forever?

By CherÍ E. O'Neill    //    Volume 27,  Number 2   //    March/April 2019

Last year, I changed jobs. I moved from serving as the chief executive officer of a unified-model state university foundation (fundraising, alumni association, investments, and stewardship in one organization), to serving as the CEO of a freestanding foundation (fundraising and alumni association man-aged by the university).

You’re probably thinking I’m going to tell you which model is best. The short answer: it depends—on the university, its leaders, its donors, their respective needs, and on the university’s priorities.
There are certainly efficiencies to be realized in the unified model. One-stop shopping—versus one contact from the foundation, one from alumni relations, one from development—can indeed be less confusing for donors and alumni. What’s more, in the unified model everyone in advancement and alumni relations can work toward a common goal under a single strategic plan.

On the other hand, fundraising and alumni relations can distract greatly from the critical focus on investment management, asset growth, and donor stewardship. Indeed, in the combined model my greatest share of mind and time went to dollar and donor acquisition. The focus was, of necessity, more on how much money we brought in each month and each quarter versus how well we maximized our endowment for 20, 50, and 100 years from now.

This brings me to the bigger question for university foundations and the universities we serve no matter which model we employ: With all the pressure to spend our philanthropic support now, how do we ensure that we’re growing our endowments in a way that will equitably serve our institutions’ needs and our students’ needs for decades or centuries into the future? If we’re “eating our seed corn,” and if today’s needs drain tomorrow’s funds, how will we ever reach that huge-endowment dream?

Many years ago I headed a national women’s organization that ran a fundraising campaign called “For Now. Forever.” The goal was to raise “gifts of greatest need” (read: unrestricted dollars) that could be employed at the board’s discretion and on the board’s timetable.

But the reality is “for now” is far more tempting than “forever.”

  • When universities are pressured to lower administrative costs, it’s more tempting than ever to tap foundation funds to pay for development and alumni operations;
  • When universities are suffering from declining state support it’s tempting to try to make up the difference with donor dollars;
  • With university leaders’ average tenure growing shorter, it’s tempting to use philanthropic support in the short term so it will help build a particular leader’s legacy;
  • With student financial aid and faculty research needs so great, and with many donors wanting to help immediately, it’s tempting to move philanthropic dollars through a revolving foundation door rather than set them aside for future generations.

All of this makes it difficult to build our endowments for the future.

And yet there’s that nagging issue of intergenerational equity—the notion that it’s going to cost more to deliver the same quality of education for students down the road, that it will cost more to sustain and grow the margin of excellence we seek for our colleges and universities.

No matter which governance model we select, no matter how wild the roller-coaster ride of investment returns, this is the greatest strategic challenge for foundation boards and their staff leaders: Are we here merely to respond to today’s high-pressure needs, taking in dollars and spending them quickly? Or are we the keepers of perpetuity, focusing ourselves and our donor dollars on student, faculty, and institutional priorities decades down the road?

Some would answer: Why not both? But with long-term market returns falling short of targets and the increased demand for higher spending from endowments, the realists among us know that we’re challenged to keep pace. As a result, the strong futures we seek for our university partners are being compromised.

Here in the foothills of the Rockies we’re in the midst of strategic planning. As part of that exercise, we’re asking, “For now? Or forever?” Something tells me you will be, too.

The owner of this website has made a commitment to accessibility and inclusion, please report any problems that you encounter using the contact form on this website. This site uses the WP ADA Compliance Check plugin to enhance accessibility.