Over the Top
In the spring of 2008, there was an electric mood at Colby College. A capital campaign that had gone public three years earlier was going better than anyone at Colby had planned. Indeed, trustees had already recalibrated expectations, moving the goal from $235 million to $370 million in the wake of a major and unexpected gift of art.
As everyone now knows, however, the fund-raising landscape changed dramatically in September 2008, when a cascade of horrible economic events drained the assets of wealthy and modest prospective donors alike.
“There was discussion at the board level of sailing well past [the goal] in the spring before the terrible fall,” recalls William Adams, Colby’s president. “Sailing past was on people’s minds, but [expectations] quickly went the other way.”
The conversation at Colby shifted dramatically, Adams said. In a series of meetings, administrators and trustees turned from unbridled optimists to subdued realists -- talking openly about not meeting the goal on time or at all. With two years remaining in the campaign, Colby had raised $321.5 million -- 87 percent of its goal -- and still had $48.5 million left to come up with in less than two years.
“I, like many other presidents and development people, became instantly rather nervous about our capacity to conclude,” Adams said. “We were still a significant distance from the end.”
Meeting the goal didn’t happen without some perspiration, but Colby did reach the finish line on time. In July, the college trumpeted exceeding its campaign goal by $6 million -- buoyed by a $5 million “capstone gift” that put Colby a few million dollars beyond its previously determined endpoint.
While Colby’s celebration is surely warranted, it marks a departure from pre-recession years, when colleges were often breezing past their goals well before deadlines, spending the last year or so collecting gravy dollars. A couple of other colleges have similarly ended campaigns this summer by getting just over the hump with a big final gift.
“I think maybe the difference is what used to be a ‘wow’ is now a ‘phew.’ Now it’s a sign of relief that we made it, as opposed to a loud cheer that we vastly exceeded the goal,” said John Lippincott, president of the Council for Advancement and Support of Education (CASE).
Pace University, for instance, recently celebrated the conclusion of its seven-year capital campaign by hitting $101.1 million -- just over a $100 million goal. Similarly, Carleton College wrapped up a projected $300 million campaign in July with a total of $300.4 million.
CASE does not track how campaigns finish relative to goals, but surveys have already shown how tough it’s been out there since the recession. About 33 percent of colleges extended campaigns beyond previously scheduled end dates in 2008-9, compared with 22 percent in the previous year. Of those colleges that extended campaigns, nearly two-thirds (64 percent) “agreed” or “strongly agreed” that the dismal economic climate was the primary reason for prolonged fund-raising efforts.
Not surprisingly, private giving to colleges and universities has also declined. The most recent data compiled by the Council for Aid to Education found an 11.9 percent drop in contributions during 2009. A number of colleges have still managed to meet or exceed their goals even in this environment, but many have relied more on bequests or less typical gift arrangements that allow donors to stack their payouts toward the end of a gift given over several years.
Colleges customarily conduct exhaustive feasibility studies before beginning a campaign, but a rule of thumb is that institutions raise about 40 percent more than normal during campaign periods, Lippincott said. That rule may have been less applicable during a downturn as long and deep as the one the U.S. has experienced, however, and reaching a goal that was set years before anyone saw the collapse coming was a feat in itself, Lippincott said.
Since colleges often look toward recent economic trends to determine future goals, some are likely to temper their expectations for future campaigns, Lippincott added.
“I think folks should go into it optimistically, but with an added dose of realism that we’ve had brought to the fore with this economic downturn,” he said.
Trusting in Trustees
The recently concluded campaign at Carleton College met its $300 million target only with a needed boost from board members. Around the midpoint of the campaign, which started its quiet phase in July 2004, trustees agreed that they would personally contribute one-third of the total campaign goal. Much depended upon the board fulfilling its pledge, because a sitting trustee’s family agreed to contribute an additional $15 million – on top of $10 million already donated – only if the rest of the board stepped up and met the challenge.
“This donor said, 'I’m not going to do it unless we change the culture of philanthropy,' ” said Gayle Keller McJunkin, Carleton’s associate vice president for external relations and director of development.
The other trustees delivered in the final months of the campaign, which concluded at $300.4 million in contributions -- just over the top of the goal. Among those gifts, as promised, was $15 million from the family of Wallace Weitz, a trustee and investment guru who co-chaired the campaign committee along with his wife, Barbara Weitz.
Relying in part on trustees to help push a campaign across the finish line is certainly not unique to Carleton. Indeed, trustee support comprised more than half -- 55 percent -- of the gifts made at Colby, where fund raisers approached board members for a second round of gifts in the last 18 months of the campaign.
“We couldn’t have completed the campaign on time or on budget if we hadn’t done that here,” Adams said. “I guess you would find that the board [members], who have the most at stake besides the president and the development office, would be critical in this environment.”
While it’s understandable for colleges to approach their biggest supporters at crunch time, it’s important not to create the impression that big donors will be pressed for the “gift of a lifetime” on multiple occasions within a single campaign, said Bruce Flessner, a consultant with Bentz Whaley Flessner.
“The next time you go out [on a capital campaign], some of the board members -- instead of stretching at the beginning -- sort of wait and say, ‘We may get a couple of chances to do this,’" Flessner said with a chuckle.
According to a CASE campaign report published in 2009, trustee contributions made up 11 percent of contributions made toward surveyed institutions in 2008. That percentage can be deceiving, however, since trustees who are also alumni -- of which there are many -- are counted as alumni and not trustees in the survey. Alumni giving made up 33 percent of contributions among survey respondents.
It's understandable that this environment will force colleges to work extremely hard just to meet campaign goals, and failing to deliver has real consequences, Flessner said.
“It’s a huge issue,” he said. “You’ll start to see [donors] are much more reluctant to go into a big campaign next time. That can live with you for a decade or more, so it has lots of implications if you don’t do well.”