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Capital Campaigns

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Capital Campaigns

As competition grows for philanthropic dollars, and federal and state funding decreases, colleges and universities are launching record-breaking capital campaigns. But do HBCUs face different fund-
raising challenges than their White counterparts?

By Eleanor Lee Yates

Hampton University recently set a record among historically Black colleges and universities by raising $200 million in a capital campaign that was completed three years early. Now Hampton’s president, Dr. William R. Harvey, has raised the bar, expanding the goal to $250 million by 2003. The university is well on its way to meeting that goal — to date more than $220 million has been raised. And Harvey won’t guarantee that the campaign will stop at $250 million.
“We’ve picked the low-hanging fruit. But there’s still fruit available higher up in the tree,” says Harvey.
Hampton is more the exception than the rule when it comes to raising money among HBCUs. Many have had successful campaigns, but HBCU leaders say they often face hardships that traditionally White schools don’t have.
“In some cases, our colleges are not well known. They may not have the prestige. Part of our lot is to make our case every day,” says Dr. Thomas Cole, president of Clark Atlanta University. “Public opinion on Black colleges seems to change. You think you’ve convinced people of the value of Black colleges, then you find you have to reconvince them.”
Clark Atlanta University is in the planning stages of a major campaign. Much of the money will go for a multipurpose classroom, as well as the endowment of scholarships and faculty support. The latter are areas Cole finds to be the biggest challenges. Donors usually prefer to donate money for a building, something tangible they can point to.
It is difficult enough for private HBCUs to raise money, but Dwayne Ashley, president of the Thurgood Marshall Scholarship Fund, says it is especially difficult for public HBCUs.
“People hear the word ‘public’ and think the state is funding them 100 percent,” says Ashley. “They think, ‘I pay taxes, and that should cover the resources.’ But state funding is never more than 30 (percent) to 40 percent, leaving public HBCUs to raise the rest.”
Of Black students who attend HBCUs, approximately 70 percent attend public schools. Furthermore, enrollment at public HBCUs is often triple that of private HBCUs. Because these schools traditionally were not strong in fund raising, these schools have years of catching up to do, says Ashley.
The Thurgood Marshall Scholarship Fund has offered training to public HBCU presidents, vice presidents of development and new development officers.
“They learn new techniques, and technology training helps them do a better job at soliciting and running campaigns,” he says.
Gains are being made, however, says Ashley. Of the 45 members of the Thurgood Marshall Scholarship Fund, 14 of the members have an endowment of $1 million to $10 million. The United Negro College Fund also raises operating funds for its member institutions, which include private HBCUs.  
 
Loyal alumni
Alumni are the No. 1 source of financial support for private colleges and a major one for all schools. According to the Council for Aid to Education, in 1999 approximately 32 percent of alumni at private liberal arts schools gave to their alma mater, compared to 18.8 percent at public colleges and universities.
During the capital campaign at Smith College, a women’s college in Northampton, Mass., the message to alumni and friends of the school was that every gift is significant, says Karin George, vice president for advancement at Smith.
 With an endowment of more than $900 million, almost 90 percent of Smith’s budget comes from alumni donations, though corporate support is on the rise.
Yale University is in its final year of a five-year $1.5 billion capital campaign. The university has raised $1.72 billion, according to Charles Pagnam, Yale’s vice president of development. About $424 million will go to renovate the historic residence halls, build new science buildings and support student scholarships. Yale has raised more than $636 million for its endowment.
According to Pagnam, the school has never received many corporate gifts but about 14 percent of campaign dollars — about $238 million — comes from foundations. It is the alumni that have been Yale’s core support.
The New Haven, Conn., Ivy League institution has traditionally had one of the highest alumni giving records among the nation’s colleges and universities. Last year approximately 90 percent contributed. 
 HBCU leaders acknowledge that alumni giving continues to be an area they must improve upon.
Clark Atlanta University, which is affiliated with the United Methodist Church, receives approximately $1 million from the church, as well as donations from alumni and friends, but its biggest contributors are corporate. Corporations are eager to identify talented African Americans and hire the best students, says President Cole of Clark Atlanta. But Cole, like many HBCU presidents, wants to lessen reliance on corporate support.
“We have got to increase our base of alumni support, but we have not had a core of alumni used to giving,” he says. Alumni giving is increasing — it is now 12 percent — but Cole says he thinks it may take another generation before alumni contributions rise to a significant level.
Getchel Caldwell, assistant vice president for institutional advancement and university relations, says the university is preparing to unveil an aggressive challenge grant. A corporation is issuing a 1-to-1 match. Clark Atlanta also has recently reorganized its alumni office to better track alumni. The university now has an alumni house, which it hopes will be a gathering place and draw former students.
Billie Sue Schulze, a former vice president at Spelman College, now works for the Southern Education Foundation, which helped coordinate The Kresge Foundation’s HBCU Initiative, which last year awarded a total of $18 million to five historically Black colleges to help them build more diverse portfolios for financial resources.
The five HBCUs, selected out of 73 applicants, are Bethune Cookman College in Florida, Dillard University in Louisiana, Johnson C. Smith University in North Carolina, Meharry Medical College in Tennessee and Xavier University of Louisiana. The colleges and universities will hire a total of 60 additional development staff employees, buy computers and receive ongoing technical assistance.
“The paradigm has shifted among historically Black schools. More alumni have the resources to give major gifts, and they are very excited when they are shown how to do it,” says Schulze, who worked on Spelman’s $113.8 million capital campaign. In the year since the grants were awarded, one school has already received a $1 million gift.
“Like any institution, HBCUs have lived in their historical perimeters,” says Trish Jackson, vice president for education at the Council for the Advancement and Support of Education (CASE). Most HBCUs were founded after the Civil War by philanthropists and often were affiliated with a church. They received some support from churches as well as altruistic individuals.
Jackson emphasizes that the African American culture has been extremely philanthropic, but these efforts were traditionally to churches.
“Black colleges did not have the culture of alumni giving back, and relied on (existing) support and on government support. Many of these colleges have had very strong grant-writing staffs,” she says. “But they are now at the point that they need to expand their external funding.”
 “Alumni are more likely to stick with you,” says James Kunetka, executive director of communications in the Office of Vice President for Resource Development at the University of Texas at Austin. The university began a seven-year $1 billion campaign in 1997. University of Texas alumni have given $488 million to the campaign.
This spring marked the halfway mark, with $847 million in gifts and pledges. Of the $1 billion the university plans to raise, $117.3 million is earmarked for student support, $72.5 million for faculty support, $212.9 million for buildings, laboratories and infrastructure and $442.2 million for programs and research.
Corporations can be generous, but their gifts may largely be an investment in access to knowledge, research and new personnel, says Kunetka, stressing that development officers must understand exactly who their donors are.
“Older alumni seem to give more unrestrictedly. The younger generation asks for more accountability; they want to know where their money will go,” Kunetka says. 

A daunting task
Successful capital campaigns don’t just burst out of development offices come Monday morning. They are painstakingly organized by way of feasibility studies — a basic assessment of where colleges and universities are financially and to what projects alumni, friends, corporations, etc., are most receptive to contributing. Schools “test some numbers” with a group of alumni and friends and weigh their initial response. Often consultants meet in face-to-face interviews with top potential donor prospects. This is an opportunity to get direct feedback from those who are most likely to ensure success of the campaign. In interviews, consultants can get a sense of the potential donors’ priorities. Often some projects may find a lukewarm response with these potential donors, and therefore, the projects could be struck off the list. Not all colleges use feasibility studies, because they have evidence from alumni and others that certain projects will be supported.
The University of California-Los Angeles is one example of an institution which thought it could do much better than its feasibility study predicted. In 1995, a study recommended a goal of $1 billion, a goal considered then to be very ambitious. But the university’s Campaign Cabinet decided instead to set the goal $200 million higher. Campaign UCLA is hailed as the most ambitious fund-raising effort ever undertaken by a college or university. The seven-year campaign goal met its original goal of $1.2 billion two years ahead of schedule. UCLA Chancellor Albert Carnesale increased the goal to $1.6 billion by June 30, 2001.
University officials say Campaign UCLA is critical to the school’s future because state funding provides only 20 percent of the operating budget, and federal funding is declining. According to statistics, almost 30 percent of the money is coming from alumni, 18 percent from non-alumni, 42 percent from private foundations, 9.5 percent from corporations and 1 percent from campus organizations.
Most colleges and universities typically do not set low campaign goals.
“It does the institution no good to set standards lower,” says Jackson of CASE. “This would give a perception that the college is a place of lesser value.”
“Fund raising is an art and a science. You must cultivate, solicit and steward many, but there is also a lot of serendipity,” Jackson says. “You just never know. Development people by nature are pretty optimistic. There are those gifts you really work hard for, and when they come to fruition, you feel good about them. But you sometimes get gifts you never expected.” And following the rule of thumb, from 30 percent to 50 percent of the goal should already be raised during a “silent period” before the campaign goes public.
 College trustees also play a significant role in fund raising.
“Trustees need to take primary ownership. They must make their own financial commitment,” says Jackson. “Some college trustees make proclamations of support when launching a capital campaign. It’s a visually symbolic display that 100 percent of the board made a commitment to the campaign. Many trustees are very directly involved in the campaign, though it is not a requirement.”
Planning and hard work appear to be the hallmarks for successful fund raising, but there may be some degree of luck regarding timing.
“The times do affect giving,” says Kunetka of UT-Austin, adding that his university has profited through gifts from the state’s high-tech boom. He says it is too early to gauge the effects of the recent stock market adjustment.
But Karin George of Smith College says it is hard to predict donor giving there based on the economy.
“When we’ve had a prolonged market downturn, our philanthropy continues. It’s like tithing,” she says. Smith, established in 1871, began a six-year $250 million capital campaign in 1997. The college recently completed its goal two years early, raising a record amount for the school. The first phase of the campaign includes increased support for faculty positions and student scholarships — 60 percent of Smith students are on scholarship. One new scholarship supports the school’s recently established engineering program. Some of the money is earmarked for renovation of the fine arts building, a fitness and athletic center and a 100-year-old conservatory. The second phase of the campaign includes three new buildings, including a new science facility.
Money from the campaign also helps Smith’s intern program, which gives all students one paid internship while in school, allowing them to choose a job that they are interested in without worrying about money.
The Challenges
“A capital campaign is not a monolith. There are many different challenges. It’s always difficult to raise money,” adds Dr.
Harvey of Hampton University.
One key to success is understanding the importance of the relationship between the donor and the institution, says Harvey. There needs to be some kind of personal connection.
This is Harvey’s second capital campaign. The last one, held during the 1980s, had a goal of $30 million and raised $46.4 million.
Hampton’s current campaign targets the expansion and support of the math, science, health and engineering programs, areas in which African Americans have been traditionally underrepresented. Money from the campaign already has been put to work in the creation of a pharmacy school and a physical therapy department. The school’s endowment has been expanded by more than $85 million, and more property has been purchased to enlarge the campus.
Harvey’s extraordinary fund-raising talents during his 23 years as president have powered the once sleepy Virginia school into a nationally respected institution.
The bulk of capital campaign dollars at Hampton comes from corporations and foundations, which Harvey stresses as crucial. From his perspective, Harvey says it is harder to have direct access to corporate CEOs today.
“Now most corporations set up committees on giving, and you may not even get to see the CEOs,” he says.
Still, there is nothing like having a college president ask for a gift, and he rarely gets turned down.
Saint Augustine’s College in Raleigh, N.C., has a rich history dating back to 1867. The small Episcopalian school counts the famous Delany sisters among its noted alumni. The college is in the midst of organizing what should be a $50 million to $75 million campaign. A new student life center, an athletic stadium and field house, and an Olympic-sized pool and swimming program are among the proposals. President Dianne Suber says the facility also would fill a recreation niche in the Southeast Raleigh community. And focusing on a swimming program would fill an athletic niche in which African Americans are underrepresented.
Dr. Suber and her staff are identifying Saint Augustine’s most marketable programs and are committed to making the college more sustainable. She says one element is beefing up the development staff.
“HBCUs are used to doing more with less,” she says. “In the past much money was given (to HBCUs) to massage people’s consciences or because it was just politically expedient. But now foundations no longer feel compelled to donate money to a college just because it is an HBCU. You need to have a sustainable, ongoing success story,” she says. Saint Augustine’s, with an enrollment of 1,450, is working with a consultant and is in the midst of a feasibility study.
Eugene Nicholas, vice president of institutional advancement at Saint Augustine’s, is still competing for corporate and foundation giving, but is beginning to focus more on alumni and other individual gifts.
“More institutions, whether they are Black or White, small or large, have to set their goals higher because competition for philanthropic dollars is higher today,” he says.
Nicholas and his staff are planning major fund-raising initiatives where there are strong populations of Saint Augustine’s alumni. And he wants all alumni to help open doors.
“A lot of it is who you know. We want to use all of our connections,” says Nicholas. “We want to increase our circle of influence.”
This is exactly the path that many HBCUs should be taking, says Schulze of the Southern Education Foundation.
“I don’t think it is necessarily harder to raise money these days but it can be if you don’t have the infrastructure. It is something that takes time to develop,” she says. Many HBCUs often have not had the staffing required for that infrastructure, and many did not have comprehensive major gifts programs in place. But she is seeing that change.
“Most historically Black colleges need more (development) staff. Presidents can’t do it all,” she says. “Presidents should be the ones who close the gift. Someone like Dr. Harvey is a superstar, but there aren’t many superstars out there, at traditionally Black or White colleges. By strengthening the infrastructure, colleges won’t have any big dips, which is important.”
For all the challenges and stresses, capital campaigns put colleges and universities in the spotlight. The best campaigns remind alumni, friends, foundations and corporations of all the significant work that takes place on the campuses, and of all of the contributions faculty and ultimately, students, make in the world.
And if capital campaign organizers at colleges and universities are fortunate, the economy will hold steady, alumni will feel both loyal and generous and the timing will be just right for hefty foundation and corporate donations. And everyone, from the president to the deans to professors to far-flung alumni chapters, will be taking a spot at the grindstone — ready to work.
In just the first half of this year, foundations, corporations, donors and alumni have been feeling especially loyal and generous as various colleges and universities have been the recipients of extraordinary large monetary donations. For example, Rensselaer Polytechnic Institute received $360 million from an anonymous donor earlier this year; months later the University of Colorado System received $250 million from Bill Coleman, founder and chairman of BEA Systems making what the university says the largest gift bestowed on a public university; and Stanford University recently received a $400 million donation from the William and Flora Hewlett Foundation. Frank Savage, chairman of Howard University’s Board of Trustees and chairman of Alliance Capital Management International, pledged $5 million to the university, which would be the largest donation from a Howard alumnus.
Karin George of Smith College says a real challenge of capital campaigns is that they create an artificial ending.
“They get everyone all excited, then they stop, and go away for awhile,” she says. “But all colleges deserve a sustained level of excitement. Needs don’t stop, but you don’t want to exhaust donors and volunteers.
“This is a story of students, not about a goal we created. This is a link to the past and what is going to make Smith viable today,” says George.
Those words, of course, ring true for every college and university. 



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