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Re-Thinking Higher Ed Fundraising Post-Pandemic: Finding The New Sweet-Spot Between Institutional Need And Donor Interest

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The global pandemic has forced rapid changes across every industry sector. Some of these changes have been made to accommodate the challenges created by Covid-19 and the responses – mandated, recommended, coordinated or otherwise – to the pandemic. Other changes have been made in attempt to adjust to predictions of a “new normal” post-pandemic. Others have been made in efforts to capture new markets, forge new opportunities, and realize new revenues. US higher ed is no different, but is further challenged by what the pandemic has exposed in terms of vulnerabilities and structural (self-imposed and self-perpetuated) impediments to evolutionary change and strategic adaptation. In other words, the pandemic shined a bright light on what was known by many for years, and exposed and in many cases exacerbated long-standing challenges to the current business and operating models of our colleges and universities. Evolutionary change was no longer enough. Revolutionary change would be needed and this is not something higher ed has ever been comfortable or even capable of doing.

There has been much written on the financial challenges, the enrollment challenges, the governance challenges, right-sizing or adjusting instructional staffing, adapting programs (offerings and modalities of delivery) and accommodating new audiences of learners, and myriad other challenges created by structures at the core of our higher education institutions and systems (academic tenure, college and department structure, shared governance, and eschewing activities that are not purely scholarly such as career services, experiential learning, community engagement, and industry partnerships). Much also has been written on the hopes and the successes of colleges and universities to both adapt rapidly and look beyond the pandemic to what will be needed not just to survive but to thrive. In fact, the past year has seen considerable commitments, efforts, and successes by many schools, often surprising those who have long accepted and operated under the sluggish systems. These rapid changes (both accommodations and adaptations), and the ability to realize both, also have surprised many inside and outside higher ed who have come to accept that real change was not possible and that colleges and universities were doomed to becoming less and less relevant.

Long before the vaccines started to be administered, higher ed had its shot in the arm as the pandemic laid bare the financial challenges facing colleges and universities and hard decisions were being made by senior leaders at a pace (and depth) not seen before.

Philanthropy has long played a role in supporting programs, people, capital projects, and both operational and aspirational priorities for colleges and universities. The role of private philanthropy, particularly for public institutions, has increased (i.e., expected to play a larger part in the overall financial strategy) as state support for higher ed has waned and it has become harder and harder to increase net tuition revenue (the amount realized after all discounting in the form of need-based aid, merit-based scholarships, or other incentives). At many schools, the effective discount rate (comparing the average tuition paid, including all aid and discounts, to the full published tuition) has grown to a point it is no longer sustainable. At many others, in order to enroll the necessary class size each fall, the discount rate has had to grow essentially at the same rate as any tuition increases. In all cases, even at those institutions that are able to justify and impose tuition increases, private philanthropy is increasingly being relied upon to meet their goals for enrollment, diversity, and access. 

This suggests colleges and universities take a new look at their fundraising strategies as they move into the post-pandemic era. College and university fundraising priorities over the last several decades have focused on people (scholarships and fellowships, endowed professorships and chairs, and even endowed coaches), programs (academic program support, named colleges and schools, and specialty programs, e.g., for student success), and place (new academic and athletic facilities) – largely along traditional and very similar lines institution to institution. The campaigns have been impressive, and in some cases extraordinarily so. It is not uncommon for the largest and most well-endowed institutions to have campaign goals in the billions. All have been successful.

But the pandemic has had a profound effect on these institutions. And their going-forward strategies must adapt. While much has been said about permanent changes to teaching modalities, allowances for working remotely, and the greater receptivity to distance learning, teaching with technology, experiential learning, and accepting/accommodating transfer credits, and more, little has been said about changing strategies for fundraising. Of course many institutions keep specific campaign strategies fairly close to the vest, but it is not difficult to gain insight into their priorities.

What are the institution’s highest needs post-pandemic? What has changed? What are donors’ inclinations and capabilities? How have these changed? Is there alignment between institutional priorities and donor inclination/capacity? Are the messages being articulated, communicated, and brought forward to donors the right ones? Or are they no longer relevant, or worse, tone-deaf? Certainly university foundations (or advancement offices) have had, or at least are starting, these conversations. There have been micro-campaigns, often built around newly announced scholarship priorities, in response to the pandemic. But what about major shifts in fundraising priorities, articulated by the president and supported by the board? Are they necessary? Are the strategic for the short and long-term? And what previous priorities might be sacrificed, and how would these changes be received by donors and by the campus?

Will amenities give way to access and affordability as priorities for donors? Will focus on student satisfaction give way to student success? Will there be a shift from building construction to building the needed supports (scaffolding, matriculation through graduation) to ensure the success of all students, from all cultures and backgrounds?

At many colleges and universities, new athletics facilities may no longer be able to achieve priority status over (e.g.) support for student access and student success. Capital construction, in general, may have less appeal at some schools in the coming years. Endowed faculty positions, while extremely important for recruiting and retaining the best faculty, also may fade as a high priority. Support for highly specialized, boutique, or luxury type amenities and programs may also no longer be a priority, or be seen as necessary given the other, very real and very public, financial challenges colleges and universities are facing as a result of (or highlighted by) the pandemic.

Donors, many of whom have sent their own children to college, are likely to have greater empathy and inclination to support students directly, in the form of scholarships, funds to participate in high-impact practices (e.g., study abroad, undergraduate research, internships and other experiential learning, student travel grants), and to support programs that focus on student success rather than the student experience. In other words, they are more likely (or see the need) to support academic success programs, internship programs, career services and career readiness programs. They are perhaps less likely to support new recreation facilities, increased athletics spending, or new residence halls.

At least for the time being, there may be a shift away from what may be perceived by some as amenities, and toward what is seen as essential and timely. For some schools, this may be true only for a segment of their donors. For others, it may be true for nearly all donors. What is less clear is how likely these shifts in donor priorities will be permanent. The answer to this question will differ by school, of course. But it also suggests there will need for a re-calibration of expectations for philanthropy at some schools if they find they are unable to (re-)enter the “arms race” that has characterized so much of higher ed in the last two decades. And this may further widen the gap between wealthy institutions and those that are less well funded or operating at the margin. The role of philanthropy at colleges and universities will only grow in importance in the years ahead. But so, too, will the wealth gap as donor inclinations and capacities often are so vastly different across institution types.

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