Presentation on theme: "Overview of Advancement at the University of Maine Pathway Members: Eric Rolfson Jeff Mills Pat Cummings December 11, 2012 Pathway II: Financial Sustainability."— Presentation transcript:
Overview of Advancement at the University of Maine Pathway Members: Eric Rolfson Jeff Mills Pat Cummings December 11, 2012 Pathway II: Financial Sustainability
Fundraising Partner Missions & Roles Campaign Maine at a Glance Preparing for the Next Campaign –Establishing Philanthropic Opportunity –Benchmarking Investments in Development –Investment and Resource Allocation Opportunities –Funding Models for Development Operations FY’ 12 Objectives in Review FY’ 13 Advancement Goals Today’s Presentation
Younger… (smaller gifts) (larger gifts)……. Older Older Advancement Partner Roles—A Continuum Alumni Association Development Foundation Build Class Identity Build Interest Groups Interest, Inform, Involve Prepare for Philanthropy Network / Career Resource Advocacy Transition Students to Alumni Annual Giving Major & Principal Gifts Face-to-Face Relationships Moves Management Securing Investments Planned/Deferred Giving Stewardship Real Estate Manage Endowment Overlap Reunion Giving Prospect / Donor Engagement Stewardship Overlap Gift Planning Prospect / Donor Engagement Endowed Gifts Pre-Funding Bequests Stewardship Triple Crown
Comprehensive Campaign: 2006 – 2011 $150 million goal: $157.2 million raised 23,000 donors from all 50 states and 26 countries 18% participation among addressable alumni 39% of donors made first gift during Campaign Maine accounting for 21% of the money raised Alumni donations accounted for 45% of campaign; Friends 24%; Corporations 16%; Foundations 15% 17 donors gave $1 million or more; 32 gave $500,000+ Approx. 94% of the total came from 6% of the donors Average annual increase of 68% over previous six-year period Campaign Maine at a Glance
Campaign Goals 6 Millions * Includes gifts, pledges, matching gifts, planned gifts, and bequest expectancies using campaign counting rules. * Includes $10M + in countable ORSP grants
New Gifts and Commitments % 12.5% 4.4% 4.6% 7.6%
8 Campaign Goals Student Support by Use - $47.8M Endowment Current Operations
9 Campaign Goals Faculty Support by Use - $38.9M Honors Education & Human Development Natural Sciences, Forestry & Agriculture Engineering Liberal Arts & Sciences Business, Public Policy & Health Interdisciplinary / Research Institutes Colleges Endowment Current Operations
10 Campaign Goals Capital Projects - $35.3M Property & Gifts in Kind Fieldhouse / Memorial Gym Collins Center for the Arts Hutchinson Ctr. Alfond Arena Bryant Pond Open Pledges for Pre-Campaign Projects Other Athletics - $1.0M Mahaney Dome - $0.9M Other Miscellaneous - $0.5M
Campaign Goals Endowed Excellence Funds- $9.9M Public Service & Extension Other Physical Plant Library Athletics 11
Campaign Goals Current Operations - $25.9M Unrestricted Restricted Athletics Physical Plant Library Public Service & Extension 12
In-State vs. Out-of-State Donors Top 10 States (giving during campaign) Number of Addressable Alumni Maine58.49%44,263 Massachusetts11.90%6,534 New York3.82%2,207 Florida3.78%2,741 Georgia3.03%579 Hawaii2.55%91 California2.12%1,698 New Hampshire2.00%3,332 Rhode Island1.61%506 New Jersey1.14%1, Based on donor households United States99.13% Outside US.87% (New England 75.15%, Maine 58.49%)
New Donors vs. Established Donors 14
Scale of Gifts Gift Level Number of Donors % of Donors Cum. % of Donors Amount Contributed (rounded) % of Campaign Cum. % of Campaign $5 million % $ 24 M15% $2.5 million %.04%19 M12%27% $1 million %.08%15 M9%36% $500k %.2%20 M12%48% $250k %11%14 M9%57% $100k %1%16 M10%67% $50k %2% 9 M6%73% $25k %2% 7 M5%77% $10k+ 4342%4% 7 M4%82% $5k+ 4992%7% 3 M2%84% $2.5k %9% 2 M1%85% $1k + 1,4747%16% 2 M1%86% < $1,000 19,11384%100%$ 3 M2%88% From Partners Not on Advance (# of Donors and Individual Gifts Not Available) $ 18 M12%100% 15
New Gifts and Commitments 16 Millions
Campaign Impact on Fundraising 17 $23 $14.6 Millions
Assessing Philanthropic Potential
Confidential Screening Process
University of Maine Estimated Giving Capacity (Over five years, to combined charities, if motivated) Note: All alumni, but only “friends” that are current contributors, are included in the top two categories
College# Rated AlumniPotential CLAS4,185 > $100k$710 million Engineering2,317 > $100k$410 million NSFA2,272 > $100k$360 million Education1,696 > $100k$290 million Business1,383 > $100k$230 million Total Potential$2 Billion 21 Raw Philanthropic Potential By College
Current Major Gift Prospect Pool Donors of Gifts over $25,000 22
Prospective Major Gift Prospect Pool P2G 1 & EGC>=$100,000 23
Peer and Aspirant Development Operations
25 Benchmarks on Staffing and Budget Comparison InstitutionsAspirant Institutions Kent State UniversityDrexel University Long Island UniversityMississippi State University Foundation Pace UniversitySan Diego State University Rochester Institute of Technology Dollars Raised: $40M to $50M annually Alumni of Record: 70,000 to 180,000 Wichita State University Dollars Raised: $12M to $30M annually Alumni of Record: 70,000 to 180,000
26 Source: Council for Aid to Education, VSE FY2007 data, and submitted data from select institutions (2008 and 2009 data). Comparison institutions raise an average of approximately $20M and aspirant institutions raise over $45M – creating a good results-based comparison group for the University of Maine’s investment planning Comparison Group Fundraising Results Benchmark Total Dollars Raised from Fundraising Activities Aspirant Institutions Average: $45.5M Comparison Institutions Average: $19.5M
University of Maine’s Office of University Development’s budget and staff size are significantly lower than aspirant institutions* Table 1. Overall Investments University of Maine & UM Foundation Comparison Group Median Comparison Group Average Aspirant Group Average Total Development FTE Total Frontline FTE Percentage Frontline FTEs33% 42%34% Total Development Budget$3,668,496$3,354,157$3,686,256$5,441, Benchmarking Overall Investments Additional investments in the University of Maine’s fundraising program include $300,000 from the President’s Office for annual giving operations and staff investments in planned giving and annual giving from independent partner organizations of the University.
Despite a smaller alumni base, University of Maine’s focus on prospect identification and qualification – as well as opportunities to increase leadership annual giving – can build out a pipeline of future donors Table 2. Scale of Operations University of Maine Comparison Group Median Comparison Group Average Aspirant Group Average Total Dollars Raised$20,095,481$19,054,783$19,532,719$45,478,859 Percent of Total Dollars from Individuals61% 39% Percent of Total Dollars from Corporations & Foundations 35% 33%55% Total Number of Donors9,04511,43314,17631,527 Total Number of Alumni of Record81,49794,057117,739129,174 Total Number of Rated Prospects over $25K2,0002,5236,4885,938 Rated Prospects as Percentage of Alumni of Record 2%3%6%5% 28 Across all institutions in Eduventures data set, the number of rated prospects is comparable to a median of 7% of alumni of record. The University of Maine’s currently identified 2,000 prospects represent 2% of alumni of record. The capacity screening being conducted in 2010 will identify new individuals who will need qualification and cultivation to build a larger pool of potential major gift donors. Benchmarking Opportunity
University of Maine has strong productivity per frontline officer, despite a smaller development budget investment per alumnus Table 3. Overall Productivity University of Maine Comparison Group Median Comparison Group Average Aspirant Group Average Average Dollars Raised per Frontline Officer FTE$2,009,548*$1,797,486$1,663,798$2,388,622 Average Dollars Raised per Total Development FTE$968,457**$704,917$660,617$789,651 Average Dollars Raised per Development Budget Dollar $8**$5$6$8 Development Budget per Alumnus$30**$32$34$48 29 *Frontline Officer FTE includes 3 planned giving officers employed and funded by the University of Maine Foundation ** Represents Office of University Development only FTE and Budget. Figures would be reduced when including partner organization staff and budgets. Benchmarking Productivity The University of Maine’s organizational structure for fundraising makes it difficult to calculate comprehensive return on investment in fundraising activities. Dollars raised per frontline officer is an all-inclusive metric by which to compare performance with peers. Source: Council for Aid to Education, VSE FY2007 data, and submitted data from select institutions (2008 and 2009 data).
University of Maine may need to invest in nearly all fundraising areas to achieve the fundraising performance of aspirant institutions 30 Table 4. Fundraising Area Investments University of Maine Comparison Group Median Comparison Group Average Aspirant Group Average Annual Giving Total FTE2.0* Annual Giving Frontline Major Gifts Total FTE Major Gifts Frontline Principal Gifts Total FTEn/a Principal Gifts Frontline n/a Corporate and Foundation Relations Total FTE CFR Frontline Planned Giving Total FTE3,5** Planned Giving Frontline3.0** Unit-Funded Frontline FTE * Includes 0.75 FTE in Office of University Development, 1.0 FTE in Alumni Association and 0.25 FTE in Athletics **Employees of the University of Maine Foundation Benchmarking Fundraising Investments University of Maine employs more planned giving frontline officers than other institutions. Do University Development gift officers have the tools and support to engage with prospective donors around planned giving opportunities in order to maximize a potential gift?
University of Maine employs considerably fewer support staff than peers but maintains industry norm ratios of services staff to frontline officers Table 5. Services Area FTE Investments University of Maine Comparison Group Median Comparison Group Average Aspirant Group Average Total Service Area FTE Ratio of Non-Frontline FTEs per Frontline Officer Total Frontline Services FTE46616 Communications and Events1229 Research and Stewardship/Donor Relations3458 Total Data Management/IT FTE22310 Total Advancement Administration FTE Benchmarking Support Staff Investments In what ways do Office of University Development services areas provide support to fundraising partners in the Foundation or Alumni Association?
32 Factors Impacting Productivity Tenure Job design Administrative and services support Prospect readiness/ portfolio maturity The University of Maine is productive with current resources, and should focus on raising donors’ sights to achieve desired growth Gift Thresholds Benchmark Institutions Major GiftsMost often $50,000 Principal GiftsMost often $1,000,000 Opportunities to Increase Fundraising Results When considering raising gift thresholds: Review the expectations, returns, or impact of gifts at the current levels Determine the cost/benefit for staff hours (i.e., number of individuals or FTE needed to identify, cultivate, close, process, and steward gifts at these levels) Grand Total Dollars Raised per Frontline FTE
33 Factors that determine fundraising success help inform attention & investment Factors Impacting Success Institutional priorities Academic leader involvement in fundraising Fundraising Success Fundraising background Tenure in role PROSPECT READINESS % of time fundraising Campaign cycle CULTURE OF PHILANTHROPY Institutional Factors Individual Factors Unit-Level Factors Portfolio size and maturity Program maturity Activity reporting Preferred job aspects Unit priorities Faculty priorities Development priorities
34 Reinventing to Continue Growth A leadership issue? A strategy issue? A marketing or messaging issue? A prospect maturity issue? A leadership issue? A strategy issue? A marketing or messaging issue? A prospect maturity issue? To address institutional challenges to growth in giving, ask: is this... A data issue issue? A process issue? A staffing or training issue? An organizational structure issue? A data issue issue? A process issue? A staffing or training issue? An organizational structure issue?
Funding UM Advancement
92% of public institutions use at least one gift source in funding development operations –At these institutions, gift/endowment fees have been in effect for an average of almost 19 years, and now contribute between 18% and 80% of development budgets The two most commonly used gift sources, each used by 85% of public institutions, are: –Income earned on an ongoing basis on unexpended fund balances –Endowment-management or cost-recovery fee charged on current market value of endowed funds 36 How Public Institutions Fund Development Private and public institutions reported very different funding models. Source: Eduventures, Inc. Funding Mechanisms for Development Operations: FY2009 Update, April 2009
Public institutions commonly use gift sources, generating flexibility and greater autonomy in funding development operations Executive Summary: Public Institutions Private and public institutions reported very different funding models. Source: Eduventures, Inc. Funding Mechanisms for Development Operations: FY2009 Update, April 2009 of public institutions use at least one gift source in funding development operations * At these institutions, gift and/or endowment fees have been in effect for an average of 19 years and now contribute between 18% and 80% of development budgets. of foundations use a management fee on endowed funds to help fund operations, which contributes to 40% of their operation budget ** of foundations use a gift fee (one time fee) to help fund operations, which contributes to 5% of their operation budget** 92% 94%43% * Source: Eduventures, Inc. Funding Mechanisms for Development Operations: FY2009 Update, April 2009 ** Source: CASE, Emerging from the Recession, Results of the 2010 Institutionally Related Foundation Fund Survey, for Doctoral affiliated institutions. 37
Proposed Two-Part Gift Reinvestment Fee To permit UM and USM to charge a one-time gift reinvestment fee of up to five percent on all private outright gifts (not endowed gifts) to fund expansion of Advancement staff and programs. To permit UM and USM to assess an annual management fee equal to 1.25 percent of the market value of its endowments held by the University of Maine System in addition to the annually determined pay-over which is 4.75 percent for FY12.
Revenue & ROI Resulting From Proposed Fee’s
Potential Fee Revenue Gift PurposeGift Fee Current Gift Fee Proposed Endowment Fee Current Endowment Fee Proposed Current Operations 0%3%n/a Endowment0% 0.25%1.25% Capital0%3%n/a Estimated Annual Fee Revenue $0$255,000$158,000$712,000 Based on cash gifts to UMaine in FY12 and on endowment value of $63,262,000 on 6/30/2012 for UMaine funds held by the System. Assumes 10% discount factors on both fees to account for gifts excluded from the fees.
Predicted Potential Currently Assigned Not Assigned Number of Expected Gifts Estimated Dollars Raised 5 MGOs10 MGOs5 MGOs10 MGOs $10M +3600$0 $5.0M–$9.9M121111$5 M $1.0M–$4.9M $14 M $500K–$999K $19 M $100K–$499K1,3217, $1.2 M $7.4 M All records with Major Gift Modeling Scores 800+ $39.2M$45.4M Return on Investment for Frontline Fundraisers
FY ‘12 & FY ‘13 Advancement Goals
FY ’12 Advancement Focus o Helping coordinate President’s Listening and Engagement tour o Establishing Presidential relationships o Building the Board of Visitors o Building internal collaboration among fundraising partners o Enhancing cultivation and stewardship o Restructuring to increase revenues and decrease expenditures
FY ’13 Advancement Focus Develop guidelines, opportunities and protocols for working together as independent partners in order to maximize resources, efficiencies and return on investment (ROI) Organize to be pro-active rather than reactive regarding constituent ideas and demands Develop, where appropriate, fundraising and communications strategies in alignment with the Blue Sky, including a parents program
Partner with campus leadership to identify and develop engagement strategies for principal ($1 million +) and transformational ($10 million +) donors and prospects Enhance culture of philanthropy internally and externally Define policies in preparation for next campaign Present a more united image to internal and external constituents Lay groundwork for longer-term aspirational collaborations FY ‘13 Advancement Goals Cont’.