Keeping Score With Capital Campaigns
May 15, 2013 Mark Hrywna
Not many people like being recorded on video — or even audio for that matter. That notion didn’t stop the New Jersey Symphony Orchestra (NJSO). In the midst of a $32-million capital campaign, the Newark, N.J., organization recorded their front-line fundraisers doing an elevator speech or mock scenarios making a gift ask. Then they were analyzed and critiqued in how they did, including a review by the CEO.
“We did this through all our development staff,” said Nicole Kagan, NJSO’s vice president of development. “Each had a different vantage point of their elevator speech. Everyone brings something else to the table no matter where they are,” she said.
People typically are surprised to see themselves on camera, whether it was how they carried themselves or if they realized how much they fiddle with their fingers or sit on their hands or cross their legs. “It’s a great experience to become self-aware of how you present yourself to others. There are things each one of us has that we might not realize,” said Kagan.
“We really did a lot of internal work to raise the level of everyone’s skill set and it paid off,” said Kagan.
The NJSO culminated a four-year capital campaign this past June, raising $35.8 million, some 12 percent more than its original $32 million goal, despite the worst economy since the Great Depression.
“It was an integrated campaign. We called it the comprehensive campaign because it was a mixture of endowment and operating support,” said Kagan. The original feasibility study recommended raising $32 million, with $25 million going to operating support and $7 million toward the endowment support. When NJSO came out of the campaign, it turned out to be more for operating support, with about $4.7 million toward the endowment and the remainder for annual operating funds.
The campaign kicked off in January 2008 and the economy started its descent a year later. NJSO “accelerated our touch points with donors,” said Kagan. A major gifts officer was added to the staff with a specific focus on raising the visibility of planned giving to grow the endowment. “We refocused the way donors were treated. Everyone had a responsibility to steward donors, from the CEO to folks in the ticket office,” she said. “We tried hard to embrace a certain culture of philanthropy at that time.”
Many organizations that implemented campaigns after 2008 cited flexibility as key to their success in completing campaigns. Groups often questioned whether it was still a good time to be asking for money. Several board members at Texas Tech questioned whether it was the right time, given that people were worried about their life savings, said Kelly Overley, vice chancellor for institutional advancement and chief operating officer of the Texas Tech Foundation in Lubbock, Texas.
After discussions with the board, management and chancellor, Overley said they decided to continue with some small changes in the messaging. That included being empathetic in solicitations and also being open to a pledge versus a gift if someone felt more stable coming back a few months later.
“It wasn’t a good time for a lot of people,” said Overley. It was vital to be elastic with pledges or pledge payments. “In this profession, you have to be flexible,” she said.
Institutions in a campaign either prolonged their timeline for the most part or if they were about to start their campaign, some delayed it. It was quiet in 2009 and into early 2010, returning in 2011 and definitely by 2012, according to Sevil Miyhander, corporate vice president and managing director at CCS, a New York City-based consultancy. “We’re seeing a lot more confidence, toward moving aggressively forward, even on endowment campaigns, which were probably least likely to be started during the recession,” she said.
“Another thing we saw that changed during the recession was the length of time that donors would take to consider a decision,” said Miyhander. The decision-making period was lengthened and is now shortening, coming back to pre-recession levels. “Individuals took longer to make decisions, and they did in some cases, there was a reluctance to make multi-year pledges, almost a soft multi-year pledge,” she said.
Organizations are most concerned about the right number, and then helping to start cultivate potential leadership, ease them into campaigns and educate leadership among the board about their potential role, Miyhander said.
“For sure, it added time to our campaign, perhaps two fiscal years. The original template, we would’ve been done by now,” said Roger Milici, Jr., associate vice president for development, who joined Fordham University in New York City in 2009 from Tufts University. The timing of the recession probably added as much as two years to Fordham’s “Ever Upward” campaign, which kicked off in December 2008. The school still brought in a record $70 million during Fiscal Year 2009, and is within striking distance this year of its $500-million goal. The campaign included a $100-million campaign for Fordham’s School of Law to construct a new building and boost the annual fund, professorships and scholarships.
Counting began in July 2004 and the campaign launched publicly in March 2009, having raised $266 million to that point.
“This was only our second campaign. We don’t have operational maturity in a lot of areas,” he said. The first campaign raised $250 million during the 1990s. Fordham was at $480 million earlier this year, anticipating reaching its $500-million goal by the end of the calendar year.
As the campaign winds down, the institution will go through a new strategic planning exercise, Milici said, with some objectives that haven’t been funded to be carried forward, primarily bricks-and-mortar projects.
The goal for capital projects was aggressive, about $170 million for a series of bricks-and-mortar projects, with almost $104 million raised for other projects. Mirroring national trends, Milici said, there was more interest in giving for financial aid, with Fordham raising $33 million more than its $70-million goal.
Fordham received gifts from approximately 65,000 donors, with an estimated one-third of the $480 million to date from trustees, according to Milici.
When the recession hit, one NJSO donor canceled a gift and discussions internally questioned whether it was the right time to be asking for donations given the cratering economy. “We decided to go forward,” Kagan said after that many of their closest donors would be ready, but also if you’re not talking to your donors, someone else will be talking to them.
NJSO boosted its cultivation and stewardship activities, Kagan said, such as increasing the number of backstage meet-and-greets between donors and artists. “We upped all kinds of activities because we knew that people in NJSO were part of the family, with them through ups and downs. When you’re in the family, remember those who stood by you. We forged forward,” she said, announcing the public phase in September 2010.
The symphony was originally looking at three years to close pledge payments. When the recession hit they realized that people might need more flexibility on their pledge payment schedule. Still, a large percentage of gifts to the campaign were paid off in three years. Flexibility in pledge payment schedules was something that happened during the back end of the campaign, according to Kagan, and there also were some people who shifted to a planned gift instead of cash.
What might have helped pay off those pledges was what NJSO internally coined the “Recession Sensitive Challenge” for donors of $250,000 and more. Two lead gifts of $2.5 million went toward the $5-million challenge, which matched cash that was going to the campaign on an annual basis, thus driving annual cash toward the campaign. They matched a third of the cash paid against a donor’s pledge on an annual basis. For instance, if a donor who made a $500,000 pledge to the campaign and paid $100,000 annually, that first year’s $100,000 donation generated $33,000 in additional revenue.
“It incentivized people to pay as much of their gift in cash assets (stocks or cash) versus a deferred gift or pledge toward a planned gift that might be counted but might be realized later,” Kagan said.
Texas Tech’s $1-billion campaign reached its goal by the end of December 2012. Since the fiscal year ends in August, Overley said they didn’t want to just stop counting mid-year. The school will continue to make a big push through Aug. 31, with a plan to start a scholarship or mini-campaign afterward. “It was a really good time to celebrate our success, look at maybe focusing on just scholarships, or something,” she said.
“Athletics is the front door to any university, that public persona, like it or not,” said Overley, echoing what her chancellor says all the time.
A boon to the Texas Tech campaign was that the Red Raiders football team enjoyed a stellar 2008 season. The university raised $25 million in six weeks for an expansion of the east side of the football stadium.
In hopeful anticipation of a victory over rival University of Texas, Overley said they had prepared an email solicitation that was ready to be sent as soon as the game clock struck 0:00. The solicitation was sent to every active email address on file (about 250,000), and helped to raise some $200,000 in online donations within 24 hours.
“For us, it was a big game,” Overley said. While it’s notable talking about athletics when it comes to fundraising, it’s still a very small piece of the pie in terms of the campaign. The $1 billion raised was from more than 120,000 donors making 340,000 gifts, with an average gift of almost $3,000.
Overley stressed keeping staff motivated. “It’s a marathon, not a sprint,” she said. Texas Tech had its third president since the campaign started, which she used as an opportunity to get out and meet donors.
“You’ve got to keep your development officers motivated. It’s a long time. Sometimes that light is nowhere to be seen,” said Overley. At Texas Tech, motivation might include a chili cook-off, snow cone day, or for some top producers, four seats in the president’s suite for a George Strait concert. “It’s doesn’t really cost you anything but it makes them feel good. It makes them feel better. Thank you letters from the chancellor, things that are small but they matter,” she said.
The silent phase launched in 2005 and had raised $600 million up to 2010. The plan was to reach $1 billion in 2014.
“We thought it was going to take us two years, especially when the economy had such a terrible time,” Overley said.
NJSO’s campaign was completed with a pool of only 49 gifts, most of which were from individuals. Only three corporations and two foundations’ charitable funds were among them.
NJSO has somewhat of a history of starting campaigns that got derailed for any number of good reasons, or didn’t reach its target, Kagan said. “It was very important at this time, with a new CEO, trying to right-size the organization, that we found a goal that was achievable, and that we hit it,” she said. “The last successful campaign, we had a hard time people giving us the same number. It was important to raise credibility for this organization and the broader patron community,” Kagan said.
“The success of this campaign really shows in the way that the organization talks about itself, I believe it’s a culture-changing campaign,” Catherine Levin, vice president of marketing and external affairs at NJSO. “It was successful, beyond success at time when might have been a lot of doubt whether it would be successful,” she said.
Norwich University in Northfield, Vermont exceed its goals, too. “We continue to see a sharpening point of the spear,” said David Whaley, vice president, development alumni relations at Norwich University in Northfield, Vermont. The $20.2 million goal was exceeded, raising more than $24 million by the end of 2012, the fifth consecutive campaign that exceeded its goal since “Norwich 2000,” which launched in 1984.
There were about 4,500 donors in the most recent campaign but a third of the amount raised ($8 million) came from eight individuals. When $82 million was raised during the Norwich Forever! campaign, 200 people made up probably $75 million of the total, according to Whaley.
It’s a very small number and it keeps getting smaller while gifts are getting larger at the top of the pyramid, he said. Of the roughly 20,000 Norwich alumni, Whaley said they will focus on their top 500 or so donors and about 300 donors will make or break the campaign. He expects about 80 percent of the funds raised to come from those donors.
There were 4,500 donors to this campaign. “$4 million is a mega gift for us. $4 million is at the top whereas $4 million at Harvard is probably the normal course of business,” he said.
Whaley noted that Norwich University had a few donors who had to extend pledges due to the recession and some donations of $5,000 or $10,000 could not be fulfilled. “It was nothing out of the ordinary. We were very fortunate to get these commitments, between the tech bubble (2001) until we felt the effect of 2008 and 2009, we were already done,” he said.
Norwich has been actively fundraising since the early 1970s. “Now we’re mature but for a long time, we thought that service to our country was a way of giving back,” said Whaley. Donors and alumni were not asked for more than $5 to $100 for the annual fund. That changed during the 1980s, with an increased emphasis during the 1990s, and that’s starting to pay off, he said.
“It is (perpetual). We do our campaigning, fundraising based on reunion cycles. We just never stop. Every reunion class knows when it’s their turn. They’re asked to make a five-year commitment to the university,” said Whaley. “It helps us get away from constant annual fund requests,” he said.
“It’s worked well for our culture.”
Norwich has raised some $170 million in five campaigns since the 1980s, including $82 million during “Bearing The Torch” from 2002-2009 and $15 million for its 175th anniversary from 1991 to 1994.
Norwich was founded in 1819 and will celebrate its bicentennial in 2019, with planning already under way to do a traditional seven-year campaign, including a two-year silent phase.
Whaley has met with the board, which has adopted a preliminary testing goal for what could be a $100-million campaign, and will spend the next 18 months meeting with the school’s top 75 donors. It could be announced by fall 2014.
With about 3,500 active donors, NJSO’s campaign aimed to raise more donors and stretch gifts, to be part of making it successful. “As we move forward, other initiatives that would tie into broadening and growing that donor base. You see a lot of that with performing arts organization, hand in hand with the patron/development model, how to bring more people into concert hall. We continue to widen that net of prospects,” Kagan said.
“As development, staff people, we are journeyman through our organizations. People who donate and support the organization have 25- or 30- or even 45-year histories with the organization. Sometimes organizations should exhibit a little more patience, I think, because people that love your organization are with you for the long haul,” said Kagan.
Whaley has plans to ensure donor recognition is improved at Norwich. “We need to do a better job of recognition. We tend not to do a good job of recognition, thanking for gifts. We do an adequate job,” he said, adding that he’s hired two people do that in a timely way.
Norwich also plans to increase from six to nine development staff. One new position will focus on planned and major gifts while the other two new posts will be full-time research. The duo will focus on traditional prospect research but also stay current with online social networks, like LinkedIn and Facebook, which often can be more current than traditional databases.
“Three years ago, we didn’t have anyone full-time monitoring Facebook or LinkedIn. Someone would look at it, but it was part of their collaborative duties,” said Whaley. It’s used as customer service, as a way to respond to people, but it’s also added to the bottom line, helping the university in researching prospects if not direct fundraising yet.
“You could say it’s going to help us raise money,” said Whaley but it hasn’t yet raised much directly. NPT