Higher 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

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 Beginning 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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 Pyramid of Giving

t
en
itm
PLANNED
GIVING

mm
Investment
•Bequests

Co
•Wills/Legacies

r
no
•Estate Gifts

Do
•Net Worth Gifts
MAJOR GIVING
Involvement
th

•Endowment Campaigns
ow
Gr

•Capital Campaigns
Interest
r

•Special Projects
no
Do

•From Individuals/Corporations & Foundations

ANNUAL GIVING TO/FROM I.E.

•Support Groups
Information
rt
po

•Special Events and Benefits

up

•Annual Campaigns Identification

lS
tia

•Direct Mail Program

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•The general public
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 Gift 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

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 Building 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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 Pyramid of Giving

t
en
itm
PLANNED
GIVING

mm
Investment
•Bequests

Co
•Wills/Legacies

r
no
•Estate Gifts

Do
•Net Worth Gifts
MAJOR GIVING
Involvement
th

•Endowment Campaigns
ow
Gr

•Capital Campaigns
Interest
r

•Special Projects
no
Do

•From Individuals/Corporations & Foundations

ANNUAL GIVING TO/FROM I.E.

•Support Groups
Information
rt
po

•Special Events and Benefits

up

•Annual Campaigns Identification

lS
tia

•Direct Mail Program

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•The general public
Stages in the cycle

1 Identification
2 Research
3 Planning
4 Cultivation
5 Solicitation
6 Stewardship
7 Renewal

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 Principles 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
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$1M Gift Table

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 Efficiency 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.

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 Efficiency 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.

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 Return 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
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 ROI Analysis
Fund Raising Amount of Average Gift Minimum ROI Variance
Category of Fund Raising Activity Investments # of Gifts Gifts Size ROI ROI Above/Below

I. Capacity Building (Not intended

to produce net income)

Non-income producing capacity building $ 120,000 NA NA NA

Donor 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 Producing

Donor 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%

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Contact Information
Timothy C. Caboni
Vanderbilt University’s Peabody College
Box #514
Nashville, TN 37203

615-343-6222
tim.caboni@vanderbilt.edu

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

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