Passing the funding testDean William Michael Treanor in Crain's, April 25, 2010
Despite the recession, schools bring in record contributions
By Judith Messina
Published: April 25, 2010 - 5:59 am
In 2009, a year in which university endowments lost nearly one quarter of their value and college fundraising posted its steepest drop on record, Fordham Law School had its best year ever. The school raked in $17.5 million in donor gifts and came within reach of its $100 million campaign goal.
“Our fundraising has increased 500% over the past five years,” says William Treanor, dean of Fordham Law. “Even at a point when the markets were suffering, we were still getting very significant gifts.”
Though many longtime donors hung back, a surprising number of schools in the city managed to defy the fundraising doldrums last year. Professional schools did especially well. So did campaigns that were launched before the economy tanked. Some schools entered the recession having overhauled sleepy development departments; others experimented with new fundraising tactics. Virtually all say they are working harder than ever to cultivate alumni and other donors.
“You have to continue to build relationships and not be afraid to ask [for money] in a down economy,” says Christine Meola, vice president for philanthropy at Pace University, which this month hit its three-year, $100 million campaign goal two months ahead of schedule.
The success of institutions like Pace in the current economic environment is remarkable. Overall, the past year was a fundraising disaster for higher education. Nationally, institutions raised 12% fewer dollars in 2009 than in 2008. In New York, two of the city's biggest money machines—Columbia University and New York University—were down 16% and 14%, respectively, according to the Council for Aid to Education.
Indeed, despite the city's legions of wealthy executives, local institutions face unique challenges even in good times: competition from thousands of other needy nonprofits and the sky-high cost of capital projects, necessitating huge fundraising goals.
“A big challenge in New York is the cost of buildings,” says Robert Kissane, chief executive of Community Counseling Services, a fund-raising consultancy. “If you build a medical research building in Dallas, it's nowhere near as expensive as on First Avenue.”
Though the recession complicated that already difficult equation, it got many development departments thinking more creatively. Pace University, for example, this year started doing generational marketing, making different pitches, say, to baby boomers and new graduates. Nearly 10 months into the fiscal year, its annual fund is up 28% over last year, and overall donations are up 13%.
Defying the odds
Wagner College on Staten Island kicked off the public phase of a $50 million campaign in 2007 and launched its first major gifts program the year before the recession. It still managed to land a $5 million contribution from the Richmond County Savings Foundation, as well as several other seven-figure gifts. Recently, the small college came up with a new tack, helping students from families most affected by the financial crisis. The message resonated with a donor, who contributed $50,000 to a challenge fund for scholarships for those students.
Fordham Law, too, incorporated recession smarts. When Lehman Brothers collapsed, Mr. Treanor knew that going to banks would not be productive. Instead, he raised $1 million from leading bankruptcy law firm Weil Gotshal & Manges.
Professional schools have an edge, even in tough times, since they can point to their role in graduates' career success. For New York University's medical school and hospital, Dean Dr. Robert Grossman has raised $770 million in less than three years, including 75 gifts of $1 million or more. For NYU's Stern School of Business, a recent trip to London by school officials generated commitments from seven alumni who had never given before, including one promise of $500,000.
Despite these success stories and an optimistic forecast by fundraisers that private giving to universities will grow 3.7% this year, fundraising is not likely to get easier any time soon. Moody's still has a “negative” rating on the sector, given the difficulty of raising tuition, cuts in state support and the continuing economic slump. For their part, college fundraisers are taking nothing for granted.
“If there is another economic setback, could it get harder to raise money? Sure it could,” says Julie Lucas, associate dean at NYU's Stern School of Business. “You have to listen to the market, you have to be strategic, and you have to engage donors in a variety of ways.”
TURNING THINGS AROUND
COLLEGES THAT are breaking fundraising records in these difficult economic times are often doing it under the leadership of a new chief who has brought new thinking to the effort.
William Treanor, dean of the Fordham University School of Law, is one of them. When he took over the leadership of Fordham Law in 2002, he expanded the development department and brought in a dynamic new director. Today, each development officer is tasked with making four to five visits a week to potential donors—and asking for money at each of those visits. Mr. Treanor, who spends 50% of his time with alumni and donors, holds himself to the same standard. This year, Fordham is bringing in five times what it did in 2002.
Dr. Robert Grossman, who had never raised a dime before he became dean of New York University's medical school and chief executive of its medical center, also overhauled a sleepy development approach when he took the reins in 2007. He focused on cultivating multiple sources of giving, from grateful patients who can give only a few dollars to alumni and philanthropists eager to help push medical science into the future.
“It's all one-on-one, blocking and tackling, speaking to people, meeting with them and partnering with them,” says Dr. Grossman.
At Wagner College, the development turnaround also began with new leadership. “We needed an aggressive, nimble, entrepreneurial approach to fundraising,” says Richard Guarasci, who became president in 2002.
Mr. Guarasci expanded the fundraising department to 17 people from three and landed a $10 million donation from two alumni, the largest gift ever to the college. Wagner, which hadn't conducted a major campaign in decades, has run two campaigns in the past 10 years—one for $20 million and one for $50 million, which is being expanded to $75 million. Wagner officials marked the $50 million milestone on March 23 by ringing the closing bell at the New York Stock Exchange.