Giving Trends in Independent Schools NYSAIS Advancement Conference

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Giving Trends in Independent Schools

NYSAIS Advancement Conference

Kathleen Hanson, Senior Consultant & PrincipalLeader: Schools’ Practice Group


Your planning committee asked me to address: Is the amount of money for philanthropy getting smaller?

Are schools less of a priority when individuals are considering charitable giving?

Are people changing the areas they wish to give to in schools?

Are schools dealing with “culture clashes” with old versus new money


Many trends are regional…………. Certainly impact of the recession created less giving

among some segments of the school community Loss of jobs Loss of bonus Real Estate Market Multiple tuitions in the school


Some trends relate to the age of the school Younger schools which rely almost completely on

current parent and grandparent giving felt the downturn in the market

Elementary schools felt both the downturn in enrollment and giving – families feeling that a public option would be “acceptable” for a younger child


Is the bucket of dollars smaller?According to the Federal Reserve

The median household lost nearly 39% of its wealth from 2007 to 2010

Income among the richest 10% of Americans fell 7.7%


Yet ……. In 2010 there were 15 gifts of $50 million + to higher

education

In 2011 there were 6 gifts of $50 million + to higher education

No data for independent schools


Anecdotally……………….. Donors of mega gifts are giving – for them the market

volatility is the “new normal” and they are moving on

Traditional major gift bands (six figure gifts) are more problematic – they are worrying about retirement assets, unemployed children and grandchildren and the ability to fulfill a pledge over time.


A Marts & Lundy Special Report – State of Philanthropy 2008 to 2011

In Independent Schools: Cash for operating support shows growth of 4% in unrestricted gifts and even more robust growth of 10% in restricted gifts.

Why the more robust growth in unrestricted? Shift in donor attitudes where donors favor a gift to a specific institutional priority over unrestricted annual fund appeals


Same report for independent schools Cash for capital support, (FY2011 over FY 2009) has

increased 16% for endowment while gifts for facilities have decreased 17%

Still, giving has not rebounded to the 2008 levels –despite increases


Is a smaller bucket of wealth the only problem?While the economy and re-distribution of

wealth are key factors in what we are seeing, we also suggest a third factor which is impacting results and that is institutional perspectives and allocation of resources within the advancement program.


Donor attitudes Donor attitudes has shifted but institutional

messaging and donor engagement has been slow to adapt.

Some schools act as if they are victims of circumstances

Others are defying all odds and enjoying record years


Distinguishing Characteristics Enlightened leadership

Within advancement and within the school

Define the role you wish philanthropy to play in the life of the school

Invest in it

Volunteer Leaders in Philanthropy engage at the highest level

Recognize: Donors want engagement and conversation over informing and educating


Are schools less of a priority for donors? Many schools are under soliciting (not enough volunteer help and

the culture doesn’t support staff soliciting)

Schools that emphasized transactional giving suffered during the recession Little identification and engagement of donors

Schools that presented “Ideas” which created solutions and had a positive impact on teaching and learning suffered far less – in fact, many have achieved great success in both annual and capital giving.

Schools that can answer the “Why?”


Bottom line is Value Do your donors value the contribution you are

making to students and/or the community?

Can you illustrate that the results of philanthropy provide you with the resources to do significantly more for student learning and program innovation?


An example……… NYC Day School

Institutional Expenses $32,932,000

Endowment 113,200,000

Draw (5%) 5,660,000

Gifts to current operating 5,025,000

Draw + gifts to operating 10,685,470

Draw/operating as % of IE 32.4%


Another exampleMA Boarding School

Institutional Expenses 47,103,500

Endowment 387,500,000

Draw (5%) 18,375,000

Gifts to current operating 5,188,626

Draw + gifts to operating 23,563,626

Draw/operating as % of IE 50%


Are donors changing where they want to give within schools?

Yes, for many, particularly within the annual fund

Donors want to have an impact with their gift

Donors want $$ directed at people and programs more than facilities Great emphasis on giving which supports faculty

Current parent donors recognize the need for adaptation and innovation


Giving to endowment More likely that gifts from alumni will be directed to

endowment

Current parents need a great deal of conversation and engagement to understand the value of endowment

Some donors today are believe each generation gives to immediate programming needs, not endowment


Culture Clashes – Old versus New Money Old versus new and more

Self – made wealth often wants “immediacy” and “impact” Challenges

Non native-born donors Lack of familiarity with mainstream American philanthropy systems & structure


International Fund Raising Families of current International students

Many boarding schools are having great success

There are steps to follow for success

International alumni Involvement from graduation on is imperative

Membership on governing boards


Schools with egalitarian cultures Resistance to high levels of recognition

Desire that all events are inclusive

Lack of culture of philanthropy


Bottom LineThree essential elements:

1. Case for support

2. Constituency that is engaged in meaningful conversation with the school

3. Catalysts – Staff and volunteers who move the program forward


Q and A

Giving Trends in Independent Schools NYSAIS Advancement Conference

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