Bridging the Gap: Building Impactful Philanthropy Everywhere

Once more the data from the latest CASE-Ross Survey presents a positive picture of the impact of philanthropy on UK higher education which remains at £1 billion for the third year, including the first months of the pandemic which is quite remarkable, but with the bigger picture still not fully known. This year’s report continues to shine a light on the gap between more mature institutions with established fundraising programmes and those who don’t. Higher Education seems to have continued to raise funds, even during the early pandemic, with the commitment to maintaining engagement and relationships with donors paying off. While the voluntary sector reliance on events and community fundraising may have struggled, the University approach appears to have succeeded in maintaining relationships and most importantly asking has continued.

While this year’s Report provides some indication of the challenges, it will be fascinating to see what the data tells us next year, when the full impact of the Pandemic will be evident. The long-term trend has been upward, even if we are nowhere near the levels that the Pearce Report (2014) predicted would be possible. What the numbers again illustrate is the dramatic difference between the Elite cluster and everyone else. Once more there are a small number of institutions which have secured the majority of the philanthropic support given to UK higher education last year. This is no surprise. The biggest brands in HE globally raises the most money. However, they also invest the most, and have done so over a sustained period of time. What we see is alumni engagement and fundraising becoming increasingly embedded in a small number of institutions, but with most still in the foothills of developing an advancement culture.

“ Fundraising success is not and cannot only be about the scale of the money raised. It must also be about the impact of the support that is secured. ”

While we have always known that success breeds success, what lessons might those institutions which are not yet in the Elite group of fundraising universities take on board, and how can those institutions bridge the gap – to build impactful philanthropy that supports their individual missions? Fundraising success is not and cannot only be about the scale of the money raised. It must also be about the impact of the support that is secured. For many institutions even relatively, modest sums make a very real difference. Objectives may be reached through a more integrated approach to external engagement with philanthropy as one outcome, alongside a range of others.

So, let’s take a closer look at what is going on in that large group of institutions which are ranked as less developed, or ‘non-elite’ in CASE Ross Survey terms. Back in 2011-12 the then Ross CASE Report explored the possibility of uncovering ‘communities’ of universities that have fundraising profiles similar to each other. This analysis was conducted using Latent Class Analysis (LCA) and each cluster brought together institutions that the data suggested were similar in terms of the evolution of philanthropy and alumni engagement. These institutions shared features such as relatively low levels of investment, modest levels of philanthropic income and in many cases, significant shifts from year to year in income and investment.

The degree to which growth is clustered within a small number of institutions, most of which are well established, research-intensive institutions is significant. The biggest and most prestigious institutions invest the most and raise the most, from a starting point of strength that has positioned them favourably for success. The gap between those universities and everyone else has remained significant over the years, and still remains so. Should everyone else just give up? Can a university that does not start from a position of ‘strength’ in terms of research, prestige or history build a successful advancement programme. Of course it can, but it cannot judge success in terms of a fundraising comparison with the Elites. Can a university in the fragile or emerging categories ever hope to progress? Yes, they can, but it requires strong leadership, consistent investment at an appropriate level, realistic ambitions and solid institutional commitment. Many of the recent conversations that we have been having with clients and through the Cairney Conversations suggest that it requires a focus – a catalyst – that initiates a new kind of internal debate. Something that brings a renewed focus on the potential role that advancement might play. This catalyst might be the arrival of a new Vice-Chancellor, a project that needs a new approach to deliver it, or investment in resource that underpins activity such as a fit for purpose CRM, or a realistic operating budget that allows greater engagement to take place and where RoI can be measured.

“Many of the recent conversations that we have been having with clients and through the Cairney Conversations suggest that a successful advancement programme requires a focus – a catalyst – that initiates a new kind of internal debate. ”

The trends in recent years would indicate that the fragile cluster has seen the greatest fluctuation in investment and new funds secured. It is well documented that not only do new funds secured (gifts, donations and new funds pledged) demonstrate the impact of philanthropic activity, but also identifies a future pipeline of income to help future-proof higher education institutions, and the most recent CASE-Ross reports demonstrate that new funds in the fragile cluster have diminished over time. Until this year, the very small number of institutions within the fragile group makes it difficult to make statistically robust findings, but we suspect that what lies behind these numbers is a group of institutions where investment (time, money and effort) has been inconsistent and modest, where there is little if any strategic focus on philanthropy and where the effort required to build engagement over a sustained period, a clear and consistent approach to messaging and the building of a partnership with stakeholders has perhaps been missing. In short, and in the words of Sir Eric Thomas’ (Thomas Report, 2004) “Here is where we see those institutions that fundraise, but are yet to become 'fundraising universities”.

The number of institutions in the emerging cluster seems to tell a different story. Since 2018, the emerging cluster reported no significant increase in investment overall in fundraising or alumni relations, however, results showed an increase in staff across both functions but this has so far failed to translate to any significant increase in new funds secured an average of £315,000 in 2017 to £557,000 in 2021, compared to the Developing cluster who saw limited overall investment in fundraising and alumni relations, and this cluster therefore, on average reported new funds secured of £1.4m in 2017 to £3.2m in 2021. The data shows that the Developing cluster are investing more in fundraising than alumni relations, and it is likely they have maintained engagement with stakeholders over a longer period of time and are beginning to see the benefits. It will be interesting in the coming years to see if those in the Developing cluster feel confident enough to increase their investment in advancement infrastructure in order to secure greater returns.

Behind the numbers of both the fragile and emerging clusters we suspect that teams come and go, institutional priorities change, as does leadership. Our work with clients in these groups suggest that, for many, the numbers can reflect a focus on projects much more than on prospects and building partnerships with stakeholders over time – short-term versus building the long-term engagement and relationships that support continuing growth in philanthropy. It takes some confidence – and patience - for the leadership of an institution with pressing immediate needs or ambitions, to build a strategy that may not deliver significant results for a number of years, However, without a longer-term view, we will continue to see these large fluctuations from year to year and may not see many moving from 'emerging' to 'developing' or further, any time soon.

It seems self-evident that investment is needed ahead of returns. However, our discussions with some colleagues in the less developed institutions (in terms of philanthropy) would suggest that expectations of returns and investment requirements can be unrealistic. In particular, an expectation that income will start to flow almost instantaneously hinders progress. With the internal focus often being on a specific goal or need – a building, or project that is seen as urgently required – rather than trying to get closer to stakeholders and to understand their interests, needs and passions, can be a factor that leads to a mismatch between expectations and what can be achieved.

“The important factor that will help to address a lack of growth is to ensure that the place of philanthropy is strategically embedded and that investment will be maintained over the long term. ”

As we emerge from the Pandemic and institutions increase their focus on income generation, with traditional options such as international student recruitment presenting new challenges, we find that some leaders are re-considering their income generation options. Maximising an institution’s ‘basket of income’ becomes more attractive as universities see that an over-reliance on a small cluster of income-generating activities can be risky in a complex world. Any decrease in investment in the advancement area across the emerging cluster, therefore, is especially worrying, more so, if philanthropy is to play a greater role in the future among these institutions. The link between investment and return is so very strong and well documented, but we still see investment drag and, in some cases, it is inconsistent. The important factor that will help to address a lack of growth is to ensure that the place of philanthropy is strategically embedded and that, to support this, investment will be maintained over the long term.

Linked to this, we have also observed something of a trend in the hierarchical positioning of the fundraising and alumni engagement pieces of the advancement puzzle. Amongst some of the most successful institutions, in fundraising terms, there has been greater focus and status within the institutional hierarchy. While, within the less developed or emerging cluster, we have seen re-structures that often result in less focus and a quieter voice for fundraising and alumni engagement. Worse still, these clusters only realise how far behind other institutions they have become when they want to launch a fundraising campaign. Why is this? Reasons generally stated are: ‘Our alumni are not wealthy', ‘I can see that it works for the research-intensive universities, but that is not who we are.’ ‘There are other things that I can invest in that will make a bigger impact more quickly.’ ‘I don’t have the time.’ Yes, it’s hard work, and yes it takes time, but is it worth it? The trends among institutions in the developing cluster would suggest that it can be. It is not only the Ivy League institutions in the USA that raise funds and not only the largest and most prestigious that have invested in development and wider advancement infrastructure over recent decades.

The leadership of institutions in the emerging cluster need to be convinced of the potential returns on investment – as part of the building of a story to develop a business case that makes sense to them. Examples of institutions that look like them, where advancement – and fundraising in particular as well as alumni engagement are now bringing real and consistent benefits are needed.

Over the last 12 months Cairney & Company has engaged with many Vice-Chancellors through our Leadership Series of discussions. We have been struck by the importance that these leaders have placed on investment in fundraising and alumni relations, often as part of a wider advancement strategy. There has been the overwhelming view that philanthropy is not the answer to a cash emergency but is an element of long-term relationship building for long-term benefit. Institutions should not allow turbulent times to change their values, beliefs, or approach and that development and advancement offices can be essential elements to the future of a successful university. Many of the leaders we spoke to throughout the Pandemic have reported a greater engagement with donors and prospects. Their time is being utilised more effectively and impactfully by their development and advancement teams. Without the need to travel, the focus can be on prospects and donors rather than the schedule of the institutional leader. Leaders are also reporting that they have enjoyed these interactions and are aiming to maintain a hybrid approach (virtually and face to face) to engagement. All agreed that engaging with supporters in a two-way discussion has created positive discussions in extremely challenging times.

The challenge for advancement professionals in the future remains to be focused on their institution’s prospects and to work with institutional leadership to keep the engagement going (built up during the Pandemic). For leaders, it is to ensure that advancement plays the best role that it can within their overall institutional development strategy. Expectations must be realistic and a relationship between investment and return better understood. For the entire sector, but especially for those institutions in the less mature clusters, the issue of finding and retaining the talent they need should be addressed. Let’s smooth out the fluctuations, let’s take a longer-term view. We need to be ambitious and our universities have significant challenges coming out of the Pandemic to build back better. Philanthropy can play a role, and with a greater strategic focus that is maintained, we will see more institutions moving from the fragile and emerging clusters in future years. The fact that so many institutions have been able to keep engaging, keep asking, and still raise significant funds - in stark contrast to the voluntary sector – should provide huge encouragement to those less mature institutions that still struggle to prioritise fundraising, and to invest consistently.

Done well and over time, this stuff works - everywhere!