No matter how hard it tries, Beloit College, a 1,300-student liberal arts college in Wisconsin, won’t be able to top the University of Southern California’s $6 billion goal when it comes to fund-raising.
So Scott Bierman, the college’s president, had a thought -- what happens if Beloit doesn’t play the same game as everyone else?
While higher education fund-raising these days is dominated by large comprehensive campaigns – through which universities raise money for numerous objectives to reach an overarching monetary goal – Bierman decided to approach giving from a different angle.
The college is developing a plan, which administrators are referring to as a “modular” or “project-based” strategy, through which it will raise money one or two projects at a time over a shorter time frame than a traditional campaign. Administrators hope the approach will set them apart from other institutions, motivate faster giving, and excite donors who can see a quick turnaround on their investments. In total, administrators believe the new approach will raise as much money, if not more, for the college than a traditional model.
At a time when several universities have just launched large-scale campaigns that were delayed by the economic downturn, and smaller institutions have struggled to maintain their fund-raising levels over the same three years, Beloit’s attempt to forgo the traditional model could help tread a new path for colleges that can’t steal headlines with record-breaking dollar figures but still want to make news and bring in big bucks to support institutional priorities.
“The scope and scale of the campaign we were talking about, which would have been somewhere between $200 million and $300 million, relative to our institution’s size, wasn’t distinctive,” said Jeff Puckett, vice president for external relations at Beloit. “Everybody’s doing a campaign like that if you’re our size.
“What this would mean for us would be that we would be able to move faster and we would have nimbleness and a flexibility that you don’t find in a traditional campaign.”
Getting on Track
Bierman wasn’t always planning to change up how the college raised money. When he came into the presidency in 2009, the college had just wrapped up a $100 million campaign. One of Bierman’s top priorities was to ratchet up fund-raising efforts and launch another comprehensive campaign, likely aimed at raising between $200 million and $300 million. Puckett also came into the job expecting to head up a large campaign.
While the college was between campaigns, Bierman decided to use the time to fund-raise for a new track and turf field. Not only would the project update the track facilities to let the team hold its first home meet in years, but it would also allow the college to begin a lacrosse program, which could attract a new demographic of student. Students who play lacrosse tend to come from higher socioeconomic strata, and are therefore more likely to be able to pay full tuition. For Beloit, that could mean pulling more students from the Chicago suburbs, where the sport is gaining in popularity.
James R. Sanger, chairman of the college’s board of trustees, had given to the college before, though mostly for scholarships and student support programs. He had never given toward athletic programs. But when he sat down with Bierman, the president managed to convince him that giving to the track project would be good for the institution as a whole.
“He made a very clear connection between doing this and something I'm interested in, which is institutional advancement,” Sanger said. “This wasn’t some amorphous thing. He had projections about what he thought he could happen longer term by having these facilities in place.”
Sanger ended up contributing $1 million toward the project, which ended up costing about $3.7 million total.
Other alumni also responded well to Bierman’s pitch for several reasons. First, they liked that they could quickly see the turnaround on their gifts, something not often seen in a large campaign. They also liked the laserlike focus that the president and staff had on seeing the project through. From the time Bierman first sat down with Sanger, it only took about 10 months to complete the project. “It was obvious that this was a focus of the president and institution,” Sanger said. “I knew [Bierman] was going to devote time and that others were devoting equal amounts of time.”
Fund-raisers were so successful at generating the necessary money for the track and turf project in a short period of time that it got Bierman and the college’s fund-raisers wondering whether the method was something they should explore further. The project is also proving to be successful at getting the attention of new prospective students. For the college's first early application deadline on Nov. 1, the admissions office received applications from 59 prospective students interested in either men's or women's lacrosse.
So this summer, Bierman and the fund-raising team brought a proposal before the board to forgo a traditional comprehensive campaign and instead pursue a project-based model. The board, led by Sanger, signed off on the idea.
Benefits You Can See
Fund-raisers and donors said they see several benefits to the new strategy. Sanger said when he donated to the track project he saw his investment pay off quickly, rather than after a five- or six-year campaign. “You can see evidence of what you’ve done and that it’s helping the institution advance, as opposed to the longer-term thing,” he said.
Puckett added that a gift whose impact you can see is likely to motivate more giving in the future. “It puts us in a position to demonstrate to stakeholders that here is your money at work right now,” he said.
Not only are Beloit administrators hoping that restructuring the traditional campaign will get the college more money and more buy-in from donors, they also believe it will change the structure of the gifts they receive. Since projects in the new system would be kept to a tight time frame, there’s an incentive to avoid gifts that pay out over a long period of time. If the cash isn’t on hand, then a project cannot be finished. So gifts are probably going to be kept to a two- or three-year payout, Puckett said.
That avoids a common pitfall in major fund-raising campaigns – that a college doesn’t actually have $1 billion by the time it says it does. According to the Council for Advancement and Support of Education, only 38 percent of colleges that wrapped up campaigns in 2010 had received more than 81 percent of their pledges by the conclusion of the campaign. Twenty-three percent had received between 41 percent and 60 percent.
Accounting for Success and Failure
While they see some benefits to the new system, Beloit administrators agree that it presents some challenges too. For one, it decreases the menu of options, which might make it more difficult to entice some prospective donors, and requires good salesmanship from chief fund-raisers in order to work.
Beloit fund-raisers said they were not worried about limiting at any one time the options that donors could give toward. In addition to a big-ticket item, the college will also likely encourage donors to give to students scholarships and faculty support. And if a donor has a particular gift idea in mind, Puckett said administrators will work with that potential donor so long as the idea aligns with the college’s goals.
The modular fund-raising structure also puts more pressure on the development office to make more specific goals in a shorter time frame. While the university won't establish its first list of priorities until the board's next meeting in February, Puckett said it is likely that increasing the annual fund will be one of the first priorities. The plan is to increase the giving rate from $2.3 million a year to $5 million a year by 2015, Puckett said.
“The approach does not allow you to bunt,” Puckett said. “Depending on your perspective, that might be a downside or an upside. We’re accountable in a way that we would not be normally. Comprehensive campaigns afford you a bit more flexibility. You have numerous priorities. In a billion-dollar campaign, success is measured by whether you hit that billion-dollar mark. If some other priority is not fully funded, it tends to be a sidenote.”
In the same vein, Puckett also thinks the new structure could change the way the board evaluates Bierman. His performance as a fund-raiser can be measured on a much shorter time frame than under a more traditional campaign. That could work well for him if his first few initiatives are successful, which could help him build up goodwill. If they are not, Bierman might not have six or seven years to turn things around.
One key, Puckett said, is that the college has to be willing to admit defeat if a project isn’t going as expected. “There’s always going to be risk,” Puckett said. “As long as we can say we’re aware of risk and we’re willing to fail if project doesn’t fly with donors, then we can regroup and try other alternatives”
Rae Goldsmith, vice president of advancement resources at CASE, said Beloit’s new strategy isn’t as radical a change as it might seem upon first glance. Long before comprehensive campaigns came about and became the norm for most colleges, colleges and universities raised money on a project-by-project basis. “Comprehensive campaign is a relatively new invention,” she said. “What Beloit is talking about is really the way fund-raising started in higher education.”
Even now, many colleges do modular fund-raising between large campaigns as a way to combat donor fatigue. In-between large campaigns, colleges and universities will target one or two projects for fund-raising efforts.
While they said modular fundraising might be the best plan for Beloit at the moment, Goldsmith and Donald Fellows, president and CEO of Marts and Lundy, a fund-raising consultant, both predicted that the college might eventually decide to turn its efforts into a campaign.
The reason why colleges and universities moved away from modular fund-raising to capital campaigns and then comprehensive campaigns is because the latter were more successful. In the long run, many believe colleges raise more money in campaign mode than under other structures. According to the CASE survey, institutions in or concluding campaigns in 2010 said they thought they raised more funds when in campaign mode, with the largest proportion of respondents reporting that they thought they raised between 25 percent to 50 percent more.
In the long run, Goldsmith and Fellows said, it is unlikely that modular fund-raising strategy will replace broad, comprehensive campaigns. “Even at the extreme, even at a number of Ivy League institutions with mature development programs, the fund-raising at highest levels, it still comes back to what is essentially the same comprehensive campaign model,” Fellows said. “It just works.”