Wednesday, March 14, 2018

Building Fundraising Capacity

Why leave money on the table?

As a sector, community colleges are far behind their four-year counterparts in fundraising.  That’s particularly true when it comes to cultivating individual donors, as opposed to getting grants.  

In one sense, that’s counterintuitive; community college graduates are much more likely to stay local than four-year graduates.  In many places, there’s no shortage of local alumni.

But the sector has lagged in this area for a few basic reasons.  One is institutional age. Almost half of the community colleges in the country, including my own, were established in the 1960’s.  Most didn’t have significant numbers of alums making significant money until the 80’s or 90’s. (Locally, Rutgers was established in 1766, over 200 years before Brookdale.  That’s a hell of a head start.) Most also don’t have bigtime athletic programs, which can often drive donations. And community colleges tend to draw more low-income students; it can take them a long time before they get economically comfortable enough to donate large amounts.

Given chronically austere budgets, community colleges have often chosen to focus what they have on the students they have.  That’s a generally admirable impulse, but it tends to mean that non-emergency spending -- like building up a fundraising arm -- takes a back seat.  Perversely, that’s true even though fundraisers should be able to pay for themselves after a startup period.

So, here’s an idea I freely offer to any state that’s willing to try it.

States could offer grants to help community colleges build or build up their fundraising capacity.  

The grants would have to start out relatively generous, but they could phase out over time.  The idea is that successful fundraising would allow the colleges to maintain the new capacity.  If the new capacity fails, its funding will dry up and it will go away naturally.

I could see a grant like this having bipartisan appeal.  It’s a way to help community colleges develop alternative revenue sources beyond appropriations.  It would become self-sustaining, and even profitable, over time. It would put private money on the table that isn’t there now.  In the short term, moving the cost of the fundraiser to a grant would allow colleges to argue honestly that a hugely high percentage of any given gift would go to direct programming, whether in the form of scholarships, buildings, professional development grants, or whatever.  It would even establish a revenue stream independent of local or state political winds, allowing some buffer when administrations change, as they are wont to do.

It wouldn’t be all that difficult for a state to do something like this.  It would require a few employees per college, plus some operating funding either to get things started or to develop them.  Over time, the fundraisers could start to pay for themselves. It’s almost...entrepreneurial.

Wise and worldly readers, is there an obvious downside I’m missing?  From a pure ROI perspective, this seems like it could be low-risk and high-payoff, and the money raised could do untold good.  What am I missing?