higher education fund raising timothy c. caboni assistant dean vanderbilt university’s peabody...

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Higher Education Fund RaisingHigher Education Fund Raising

Timothy C. Caboni

Assistant Dean

Vanderbilt University’s Peabody College

Presentation to the

National Press Foundation

31 October 2006

New York, New York


Beginning QuestionsBeginning Questions

• Is an appropriate volunteer fund raising board in place, and do its members fully understand their leadership role and responsibilities?

• Has your institution systematically examined its fund raising potential?

• Is the development office appropriately organized and configured for optimum productivity and results?

• Has your institution made the prerequisite investments in institutional advancement to attain the desired results?

• Does the President play an appropriate role in leading the fund raising program and integrating it into the institution’s superstructure?

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PLANNED GIVING

•Bequests

•Wills/Legacies

•Estate Gifts

•Net Worth Gifts

MAJOR GIVING

•Endowment Campaigns

•Capital Campaigns

•Special Projects

•From Individuals/Corporations & Foundations

ANNUAL GIVING TO/FROM I.E.

•Support Groups

•Special Events and Benefits

•Annual Campaigns

•Direct Mail Program

•The general public

Investment

Involvement

Interest

Information

Identification

Pyramid of Giving


Gift PyramidGift Pyramid

• 60% of gifts come from 10% of donors

• 15-25% of gifts come from 20% of donors

• 15-25% of gifts come from 70% of donors


Building and Maintaining the BaseBuilding and Maintaining the Base

• Acquisition mailings – Enlist new donors – Never Givers

• Renewals – produce income (sybunts, lybunts)

• First time givers – renew at 50% rate, after that, 70-80%

• 50% or your returns come in the first week

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PLANNED GIVING

•Bequests

•Wills/Legacies

•Estate Gifts

•Net Worth Gifts

MAJOR GIVING

•Endowment Campaigns

•Capital Campaigns

•Special Projects

•From Individuals/Corporations & Foundations

ANNUAL GIVING TO/FROM I.E.

•Support Groups

•Special Events and Benefits

•Annual Campaigns

•Direct Mail Program

•The general public

Investment

Involvement

Interest

Information

Identification

Pyramid of Giving


Stages in the cycleStages in the cycle

1 Identification

2 Research

3 Planning

4 Cultivation

5 Solicitation

6 Stewardship

7 Renewal


Principles of Gift ChartsPrinciples of Gift Charts

• The first two gifts should equal 10% of the goal: $100,000

• The next four gifts equal an additional 10% of the goal: $100,000

• The remaining gifts are flexible and can be broken down into various categories: $800,000.

• This chart is most effective with fundraising goals of $25,000 or more


$1M Gift Table$1M Gift Table


Efficiency vs. EffectivenessEfficiency vs. Effectiveness

Difference between effectiveness (maximizing the net between total gifts less fund raising costs) and efficiency (minimizing the average cost per dollar raised)

The objective of an institution's fund-raising program should not be to spend as little as possible each year to raise money, but to maximize the net.


Efficiency vs. EffectivenessEfficiency vs. Effectiveness

A program that annually produces $2 million at a cost of $160,000, or 8 percent, may look good and is indeed efficient, but one that produces $3 million at a cost of $300,000, or 10 percent, is presumably of more help to the institution [i.e., more effective] -- it is bringing in $860,000 more.


Return on Investment AnalysisReturn on Investment Analysis

• ROI = Funds raised as a percentage of fund raising expenses

• Bottom line cost percentages are not a useful measurement for internal management purposes

• Performance of one kind of fund raising program cannot be evaluated against others


ROI AnalysisROI AnalysisCategory of Fund Raising Activity

Fund Raising Investments # of Gifts

Amount of Gifts

Average Gift Size ROI

Minimum ROI

ROI Variance Above/Below

I. Capacity Building (Not intended to produce net income)

Non-income producing capacity building 120,000$ NA NA NADonor acquisition (Constituency building) 550,000$ 2,683 345,000$ 129$ 63%

Public Relations and Alumni Relations 120,000$ 45 24,000$ 533$ 20%

Total Capacity Building 790,000$ 1,385 369,000$ 266$ 47%Fund Raising Costs % 214%

II. Net Income ProducingDonor renewal - soliciting prior donors <$1K 400,000$ 6,475 $2,280,000 352$ 570%Special events fund raising 40,000$ 60 60,000$ 1,000$ 150%Annual fund raising ($1K and up) 300,000$ 600 1,760,000$ 2,933$ 587%

Planned giving/estate planning (after 4-7 years of losses) 120,000$ 6 1,070,000$ 178,333$ 892%Capital and endowment campaigns $400,000 32 $8,340,000 260,625$ 2085%

Corporate and foundation grant seeking 100,000$ 6 800,000$ 133,333$ 800%

Total net income producing 1,360,000$ 7,179 14,310,000$ 1,993$ 1052%Fund Raising Cost % 10%

Grand Total 2,150,000$ 8,564$ 14,679,000$ 2,260$ 683%Grand Total Fund Raising Cost % 15%


Contact InformationContact Information

Timothy C. Caboni

Vanderbilt University’s Peabody College

Box #514

Nashville, TN 37203

615-343-6222

[email protected]

peabody.vanderbilt.edu/faculty/lpo/caboni.htm

higher education fund raising timothy c. caboni assistant dean vanderbilt university’s peabody...

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