June 16 St. Louis Workshop

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June 16 St. Louis Workshop

  1. 2. Institutional Advancement Workshop Presented By: Terry Fairholm, President Advancement Partners, Inc. June 16, 2011
  2. 3. Today’s Presentation <ul><ul><li>Introductions </li></ul></ul><ul><ul><li>Expectations/Individual Challenges </li></ul></ul><ul><ul><li>Catholic School Stats </li></ul></ul><ul><ul><li>Development Trends </li></ul></ul><ul><ul><li>The Development Operation </li></ul></ul><ul><ul><li>Guiding Principles </li></ul></ul><ul><ul><li>Major Gifts </li></ul></ul>
  3. 4. Advancement Partners, Inc. <ul><li>We are national in scope and highly specialized in focus. </li></ul><ul><li>We specialize in development consulting and capital campaign management for Catholic secondary education. </li></ul><ul><li>University of Notre Dame Background </li></ul>
  4. 5. Catholic High School Statistics <ul><li>Tuition and Costs : ‘10-‘11 </li></ul><ul><ul><li>High School mean tuition: $8,807 </li></ul></ul><ul><ul><li>Mean per pupil cost: $10,808 </li></ul></ul><ul><li>Mean High School “Gap” : ‘10-‘11 </li></ul><ul><ul><li>$2,001 per student </li></ul></ul><ul><li>Based on the average public school cost per pupil of $9,683, </li></ul><ul><li>Catholic schools provide a $20.5 bil. per year savings for the </li></ul><ul><li>nation. </li></ul>
  5. 6. Catholic High School Statistics <ul><li>Average income generated from advancement in ’10 was $658,413 </li></ul><ul><li>Average goal for the ’10 annual fund was $399,185. </li></ul><ul><li>Average giving %: alumni 14%; parents 27%. </li></ul><ul><li>42% of schools were conducting capital campaigns. </li></ul><ul><li>Average endowment is $3.7 mil. – half reported </li></ul><ul><li>< $1.3 mil. in endowment. </li></ul><ul><li>Average % of students requiring financial aid = 40% and rising. </li></ul><ul><li>Average tuition increase = 4%. </li></ul><ul><li>55% have President/Principal operating model. </li></ul><ul><li>Average enrollment 535. </li></ul>
  6. 7. Catholic High School Trends <ul><li>Enrollment is declining </li></ul><ul><ul><li>Demographics, Competition, Cost </li></ul></ul><ul><li>“ Gap” is widening </li></ul><ul><ul><li>Upward pressure on costs; Downward pressure on tuition </li></ul></ul><ul><li>Increased pressure on recruiting/admissions </li></ul><ul><li>Increased pressure on development </li></ul>
  7. 8. Development Trends <ul><li>70% of the major gift financial goal will come from the top 10 commitments. </li></ul><ul><li>More complex questions from top prospects. </li></ul><ul><li>It’s taking longer to reach major gift financial goals. </li></ul><ul><li>More solicitation calls are required; a deeper pyramid. </li></ul><ul><li>Prospects are pledging more conservatively. </li></ul><ul><li>Increased importance of annual and planned giving. </li></ul><ul><li>Scope, sophistication and expectation of development has increased dramatically . </li></ul><ul><li>Reconsider role, benefits and financial justification for Alumni Relations position. </li></ul><ul><li>Require Institutional Advancement Dept. to be financially sound (raise 3-4 X’s cost to operate) </li></ul>
  8. 9. Development Trends <ul><li>C omprehensive funding initiatives – some schools aren’t calling it a ‘capital campaign’. </li></ul><ul><li>Emerging from the institutional strategic plan. </li></ul><ul><li>Maximize philanthropic potential on a yearly basis. </li></ul><ul><li>Less emphasis on ‘periodic capital campaigns’. </li></ul><ul><li>More emphasis on perpetual funding initiative – fund the strategic plan. </li></ul><ul><li>Include all components – AG, MG,PG. </li></ul><ul><li>The need is to increase all annual funding . </li></ul>
  9. 10. Development Trends <ul><li>We are in the process of transition from ‘ periodic capital campaign ’ and focus on major gifts to: </li></ul><ul><li>‘ Maximize philanthropic potential on a yearly basis’ from each fundamental source: annual giving, major gifts, planned giving. </li></ul>
  10. 11. Maximizing Your Philanthropic Potential on an Annual Basis – Major Gift Component To achieve changes that are transformational: Substantial increases/improvements rather than ‘muddling through’.
  11. 12. The ‘ New Reality ’ <ul><li>Economy is better now than the past few years. </li></ul><ul><li>Clearly, however, we are in a different world. </li></ul><ul><li>Regardless, you cannot stop raising money!! </li></ul><ul><li>Don’t “hide under you desk”, don’t panic! </li></ul><ul><li>Don’t make decisions for prospects. </li></ul><ul><li>Focused, disciplined execution is required. </li></ul><ul><li>A strong case - no luxury items. </li></ul><ul><li>Realistic expectations. </li></ul>
  12. 13. Four Sources of Revenue <ul><li>Tuition </li></ul><ul><li>Investment/Earned Income (endowment, concessions, etc.) </li></ul><ul><li>Philanthropy </li></ul><ul><li>Debt </li></ul>
  13. 14. Components of Development <ul><li>Major Gifts </li></ul><ul><li>Annual Fund: Methodology </li></ul><ul><li>Planned Gifts: Awareness </li></ul><ul><li>Special Events: Strategic </li></ul><ul><li>Constituency Relations/Stewardship: Communication </li></ul>
  14. 15. FOREVER TOMORROW TODAY RELATIONSHIPS AND PARTICIPATION Our Model Maximize Philanthropic Potential
  15. 16. 3 Person Development Office
  16. 17. Development Director <ul><li>Singular Focus – only raising money! </li></ul><ul><li>Concentration on major gifts. </li></ul><ul><li>Annual Fund should be “turn key”. </li></ul><ul><li>Planned Giving program must be in place. </li></ul><ul><li>Stay focused!! </li></ul><ul><li>Disciplined execution. </li></ul>
  17. 18. Associate Director of Development <ul><li>Constituency relations. </li></ul><ul><li>Not just ‘Alumni’; CP, PP, F. </li></ul><ul><li>Takes the place of an Alumni Director . </li></ul><ul><li>This position must have a development focus and be financially sound! </li></ul><ul><li>Communications – strategic. </li></ul><ul><li>Events – strategic. </li></ul><ul><li>Increased financial support is the mission. </li></ul>
  18. 19. Major Gifts: Definition <ul><li>$10,000+ in one year. </li></ul><ul><li>$25,000+ reasonable multi-year commitment. </li></ul>
  19. 20. Major Gift Statistics <ul><li>83% of all financial donations (nation wide) come from individuals (4% from corps., 13% foundations). </li></ul><ul><li>In a capital campaign, 70% of the goal will come from the top 10 commitments (or top 8-10% of the giving pyramid). </li></ul><ul><li>In education, alumni and parents are the primary prospects . </li></ul><ul><li>Foundations are secondary prospects; corporations are seldom prospects. </li></ul>
  20. 21. Why Major Gift Prospects Give to Their School <ul><li>They are asked . </li></ul><ul><li>They have the financial capacity . </li></ul><ul><li>They believe in the mission of the institution. </li></ul><ul><li>They are aware of the needs. </li></ul><ul><li>The case for support makes sense . </li></ul><ul><li>They have confidence in the institutional leadership . </li></ul>
  21. 22. Guiding Principle #1: Get Real Honest assessment of current reality: Leadership : Board, Admin., Development Focus : Institutional Funding Priorities Strategy : The plan to achieve/succeed Implementation : Are you executing properly? Time, once passed, is gone forever.
  22. 23. Guiding Principle #2: Step by Step <ul><li>A successful development initiative is the result of a series of steps taken one at a time , in the proper sequence, according to a plan and timeline . </li></ul><ul><li>At any particular time, leaders should be concerned with only one step . </li></ul><ul><li>If that step is not executed properly, the next will be more difficult. </li></ul><ul><li>If it is executed properly, the next will be easier and more effective. </li></ul>
  23. 24. Guiding Principle #3: Implementation, not ideas , is the key to success <ul><li>After all the meetings, advice, discussions and strategy sessions, it comes down to getting it done! </li></ul><ul><li>Focus on implementation (disciplined execution). </li></ul>
  24. 25. Major Gift Statistics <ul><li>Remember, < 5% of your constituency base has major gift potential . </li></ul><ul><li>Identify/Find that wealth (Elec. Screening, screening and rating sessions, comprehensive research); make the bull’s eye smaller ! </li></ul><ul><li>Involve them in your institution in a meaningful way. </li></ul><ul><li>Then ASK !! </li></ul>
  25. 26. Major Gift Fundamentals <ul><li>Identify </li></ul><ul><li>Cultivate /Involve/Inform/Determine Interest </li></ul><ul><li>Solicit Investment </li></ul>
  26. 27. Major Gift Fundamental Operating Components
  27. 28. 1. The Case For Support <ul><li>Three Steps : </li></ul><ul><ul><li>Leadership Consensus – the vision and strategic plan must be first: educates, cultivates, prioritizes, energizes . </li></ul></ul><ul><ul><li>Top Prospect Involvement : Focus Groups, individual meetings, on-line survey - creates ownership, establishes broad consensus. </li></ul></ul><ul><ul><li>Financial Modeling – 5 year projections - highlights financing required to operate the school and fund the strategic plan. </li></ul></ul>
  28. 29. 2. Prospect Evaluation <ul><li>Electronic research—Wealth Engine. </li></ul><ul><li>Staff and peer screening and rating. </li></ul><ul><li>Comprehensive research on top prospects </li></ul><ul><li>Review historical giving information. </li></ul><ul><li>Consider relationship. </li></ul><ul><li>Focus on the top of the pyramid. </li></ul><ul><li>Set campaign/major gift financial goal. </li></ul>
  29. 30. 3 . Marketing Materials <ul><li>Case Statement Brochure </li></ul><ul><li>Video </li></ul><ul><li>Testimonials </li></ul><ul><li>Letterhead </li></ul><ul><li>Banners </li></ul>
  30. 31. 4. Volunteer Leadership <ul><li>Must be committed to the mission. </li></ul><ul><li>Must endorse the campaign publicly. </li></ul><ul><li>Must make a financial investment. </li></ul><ul><li>Must help “open doors” with prospects. </li></ul><ul><li>Are not required to make solicitation calls. </li></ul>
  31. 32. 5. Personal Solicitation <ul><li>Head of School (President, Principal) must dedicate time to development – cultivation and solicitation (25% of their time). </li></ul><ul><li>Personal solicitation efforts must be driven by the Director of Development – prospects, appointments, strategy. </li></ul><ul><li>Must ask for a specific amount. </li></ul><ul><li>Administrative support for documentation and follow up. </li></ul>

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