“This Needs To Be Run More Like A Business!”

Recently, I facilitated a focus group populated with private higher education governing board members.  One slice of the discussion included a board member lamenting, “Our business model in higher education is broken.  I simply do not understand why our tuition and fees are not sufficient to cover our costs.  We need to be run more like a business!”

Statements like this are not new, of course.  But, as a consultant, I will say that I am hearing this sentiment more and more.  And from people who should know better.

On its face, this concern sounds like it makes good, common sense.  “Be more efficient.  Keep costs down.  Run the institution more like a business.”   But, when you chase that “run it like a business” line of thinking just a bit, you realize it comes with some very deep problems.  Problems, that, at their core, are prompted because non-profit higher education is not simply a business and treating it as such is wrong-headed and causes more issues than it fixes.  Here are two troubling developments that are occurring in non-profit higher education, in part, because more and more institutions are attempting to be “run like businesses.”

First, the business model approach to higher education is helping to discourage giving.  The connection between the business model thinking being advocated and the motivations for charitable giving is rarely, if ever made.  But, the very move to a more business-like, transactional, customer-oriented approach discourages giving.  And the more our higher educations are “run like businesses,” the more giving will be reduced.  If we aim to treat public and private non-profit higher education like any other business in which students are viewed as customers and the activity of keeping costs low and prices higher is the first priority, then our students and alumni will view us like Walmart, not like their “alma mater.” And giving, especially from the masses of alumni will continue to decline.

Want proof?  Alumni giving participation, which the Council for Aid to Education’s Voluntary Support of Education report tells us has decreased year-over-year for 16 years now, will continue to decrease as board members and others misguidedly encourage institutions to view students as customers.  As those students graduate and become alumni, why should they not view their alma maters as “educational Walmarts” from which they purchased their degrees?  A transactional business model undermines the whole process of giving because it reduces a life-changing experience to a pay-for-services transaction.  There is a reason no one makes charitable gifts to Walmart, Target, or the local supermarket after going through the check-out lane.  There is a reason no one even thinks to make a charitable gift to their internet provider after paying their monthly bill.  We purchase goods and services from businesses.  We don’t give to them.

Charitable giving participation increases when alumni view their institutions emotionally – as alma mater – the place filled with people who cared enough and gave enough to help them successfully transition from childhood to a richly-lived adult life.

Second, and underlying the fact that a business model approach applied to higher education will kill giving, is the fact that giving makes us better as individuals and our communities stronger.  I have noticed that some of the most vocal proponents for higher education adopting a more the business-like, transactional approach are also the same people who struggle with their own giving.  They either give infrequently or give much less than they could.  But here is what research tells us:  Helping others – financially or in any other way – is good.  It’s good to receive the help when it is needed.  And it’s even better to be the helper.  We know that research has clearly made the connection between emotional health, physical health, happiness, longevity, etc. and regular giving.  We know that developing a giving spirit is one of the healthiest habits we can adopt as adults.  It makes us better individually and it makes our communities stronger and more meaningful for us.

And yet, when people talk about changing the business model so that tuition and fees cover the full cost of education, they ultimately are advocating for a culture that values giving less.  When we give less we become more disconnected from each other and we find less meaning in our human interactions.  Simply put, a community that gives less is not as healthy as a community that gives more.   Giving in higher education should be valued, protected, and encouraged at every turn, not viewed with antipathy.  We when give, we aren’t losing something of value, we are gaining something that truly is priceless.

No, we don’t need to change higher education to become “more like a business.”  We need board members and other leaders who understand that higher education is a community of care that is much “more than a business.”  And we need to do a much better job of educating people on why generous giving should continue to be a hallmark of that community.

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Fundraising Is Not A Commodity

A lot of the services we experience from businesses today are commodified.  For instance, there are 3 “legacy” airlines now – United, American, and Delta.  While each has its own strengths (United has the best mobile app., Delta still serves the best free snacks on flights, etc.), the overall experience of air travel has been commodified.  The seats are about the same, the boarding process is about the same, and the planes are about the same.  A flight is a flight is a flight.

There are many other examples of commodification.  Major hotel chain experiences have been commodified.  Rental car experiences have been commodified.  Your internet provider offers a commodified service.

When a service or product becomes commodified, two things happen.

  1. The companies that provide the commodified service match what their competitors do. They benchmark against the competition excessively.  Over time the product or service becomes more similar and less distinctive.
  2. The consumer in the marketplace looking for a commodified service or product makes her choice almost exclusively on price. Why pay more when you are going to get essentially the same service or product from any vendor?  Low cost wins.

But, not all services are commodities.  For instance, a personal fitness trainer is not a commodified service.  Your physician does not provide you with a commodified service.  Education is not a commodity.

With a non-commodified service or product, the consumer might be willing to pay a bit more because of the perceived extra value and benefit of that particular service or experience.  For instance, you may be willing to pay more for your personal trainer because her unique energy and coaching encourages you to push yourself further than anyone else could.  She provides you with a qualitatively superior experience so price is no longer the only reason for making your decision to purchase her service.

Far too often in advancement we act like we are in a commodified environment.  We benchmark ourselves against other institutions (which we believe are “similar” to ours).  We create performance metrics for gift officers that are not designed to encourage relationship-building with donors, but rather serve to standardize the giving process (as if that is possible).  We hold up the value of “big donor data” and “analytics” while treating as secondary the immense power derived from gathering and analyzing the “little data” of personal relationships and experiences.  And we are, I’m afraid, focusing our donors more on the transaction of giving than on the joy of giving.

I have heard so-called “consultants” propagate the awful idea that there should be a specific number of visits a gift officer should complete with a donor before asking for a gift.  That’s like suggesting one should go on 7 dates and then make a marriage proposal.

When our strategies point us in the direction of sanitizing the giving process into a standard process, formula, or template – when we start to commodify the giving process – we are going down a wrong, bad road.  When we focus more on trying to find the magic mechanisms of fundraising and focus less on the uniqueness of our institutional mission, we are not understanding what drives generosity.

If we want to raise more money, our strategies should encourage us to delight our donors.  And delighting donors means that we recognize that each is unique.  It means that we must get to know them – not as equivalent points in a larger data field.  Not as a herd of homogeneous cattle. Not as robotic “giving units.”  But as individual, idiosyncratic people with unique interests, motives, and values.

Giving is a highly personal experience. It’s the opposite of the commodified experienced.  There is no formula that can be equally applied to all donors to encourage their generosity.  Just like there is no formula for the personal trainer, the doctor, or the best teachers.  Yes, there are principles that are time-tested and effective, but no template.  And the most important principle to effectively raise more money is simple:

Your best donors aren’t consumers and their giving isn’t a marketplace transaction.

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An Open Letter To A Governing Board Member

Greetings Board Member:

We are writing today because recently we’ve been discussing our institution’s engagement of you as a member of our board.  Simply put, we recognize that we have failed you in the following important ways:

  • When we recruited you, we failed to share with you a clear, written position description which included a list of board member expectations;
  • When you accepted a position on our board, we did not provide you with a substantive on-boarding process that included institutional leaders sharing with you their inspirational strategic visions and plans for our institution;
  • We have not provided you (nor your colleagues) with consistent and ongoing education focused on how you can be a more effective board member;
  • We have consistently reminded you to not “get into the weeds” of management, but have failed to provide you with substantive opportunities to do work that is more helpful;
  • We have failed to talk transparently with you about your responsibility for providing philanthropic leadership for our institution;
  • We have consistently prepared board meeting agendas that include too much time for reporting to you and far too little time inviting you to answer strategic questions and discuss generative issues.

We apologize that we’ve failed you in these fundamental ways and, yet, continue to assume and expect that you should give generously every time we ask.  It is this faulty assumption on our part that is most problematic because it causes us to take you for granted simply because you are on the board.  Moving forward, we promise to strengthen our efforts to involve you meaningfully and in such ways so that your giving will be a natural reaction to and reflection of your significant engagement with our institution.

Sincerely,

Institutional Leaders

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Tickled Pink

As I type this message, most of the world finds itself rushing toward the apex of the “Season of Giving.”  More personal gifts between family and friends and more tax-deductible charitable gifts will be given over the next 7 days than any other week during the year.  Giving is the omnipresent message.

And yet, even in the context of such a positive, loving message of giving, so many of us will experience frustration due to the busy-ness of the season, the crowded-ness of schedules, and the exhaustion that can follow.  In fact, sometimes we allow ourselves to focus more on the frustrations of the season rather than the good message that giving has for us all.

That’s where two words – “tickled pink” – come into play.

Just the other day I read an article about an anonymous donor who gave $50,000 to a charitable organization to help children.  He placed the check under a nativity scene and called the organization and told them where they would find the gift.  ABC News was able to track down the donor and he said,

“My whole life has been immensely blessed. . . I’m tickled pink to be able to do it.”

From time to time, all of us can allow ourselves to be overwhelmed by the minutia, the mundane, the frustrations, or even just the trivial or less-important matters of life and work.  Sometimes in our work as development professionals, we allow ourselves to become overwhelmed or bogged down by the day-to-day, routine aspects of our work and miss the bigger, extraordinary impacts we are making.  We allow ourselves to focus more on meeting metrics than creating meaning.  To focus more on our “to-do list” rather than our “with who list.”  To focus more on achieving goals rather than spreading the simple but powerful message that giving is good.

We get distracted from the real story – that when we do this work of encouraging others to give generously, we aren’t taking anything from them.  We aren’t asking them to give us something of great value.  We are seeking to give them something of great value.  We are giving them an opportunity.  An opportunity to align their support with their values.  An opportunity to save or transform a life.  An opportunity to feel better about themselves and our world.  An opportunity to make a difference with their lives that satisfies more deeply than just about any other decision they might make.

So, as you rush through your year-end giving activities and make those final phone calls and visits and send those last emails and letters, remember that our focus shouldn’t be on meeting specific goals and metrics – those are simply outcome measures.

What we really are doing is giving more people more opportunities to become “tickled pink.”

Blessings to you during this most important Season of Giving.

 

 

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The 3 P’s of Discovery

“I finally have a visit scheduled with Dr. Smith for tomorrow!”

This was the joyful exclamation made to me recently by a gift officer.  I smiled and congratulated him on the achievement.  Dr. Smith had been one of those prospects who made himself very slippery.  He was believed to have the capacity to make a substantial gift, perhaps even a transformational one, if he so chose.  But the institution never had a meaningful relationship with him.

He gave, but they were mostly token gifts.  If he was caught at an event, he would agree to the notion of meeting with the gift officer.  But when the actual outreach was made to confirm a date and time, he went into dark mode – rarely responding, or responding in such a tardy fashion as to be unhelpful.  This went on for almost 2 years and became a running joke among the team of major gift officers.  But, now, it appeared the visit would happen.

I was genuinely happy for the gift officer and for the institution because of the possibilities associated with this visit.  So, I asked the gift officer this question:

“When you finish your visit with Dr. Smith, what do you hope to come away with?”

The gift officer paused and said, “I want to share our funding priorities with him and see what he thinks.”

“Ok, so the primary purpose of the visit is for him to learn more about your plans?”  I asked.

He struggled to articulate a response.   “Well, yes,” he said, “and to ask him what he thinks of our plans.”

“Ok, I’m with you.  Let me encourage you to go a step or two further with that questioning part of your visit.  What if you think of your time with him as an informal interview of sorts?” I asked.    “What if, instead of sharing with him during this first visit all of the exciting plans the institution has, you ask him well-crafted questions that will help clarify the ‘3 P’s of Discovery’?”

I continued, “It seems to me that you still need some important discovery questions answered about Dr. Smith.  For instance, before moving too fast with sharing your case statement, it could be very helpful for you to gain more clarity about him and his interests. Specifically, I would encourage you to seek more understanding about his:

Prosperity – what size gift could he make if he were really engaged with you?  Does he really have the capacity that you believe he does?

Propensity – how generous, in general, is he?  Especially since he hasn’t given much to you over the years.  Has he made major gifts elsewhere and, if so, what motivated those gifts?

Passion – what is it, specifically, about our institution, program, or project, which aligns with his values and interests?

So often gift officers feel pressure (real and perceived) to share the case for support before learning what needs to be learned about the prospect.  A few well-articulated, open-ended questions, such as those below can be exceptionally helpful:

  • “I’d love to hear more about the other institutions you support. What has encouraged you to get involved/stay involved with them?”  or
  • “As you think about all the gifts you’ve made, which ones stick out as being especially meaningful for you?” or
  • “From what you know of us right now, which areas/programs/initiatives/projects/etc. do you believe are especially important?”

People will tell you many important facts about themselves when you ask in a way that communicates sincere interest in them and their stories.  And after you gain more clarity on the 3 P’s, you’ll be in a much better position to invite them to transform your institution through their giving.

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How Do You Expect Me To Give. . .?

. . . when I still have student loans to pay?

. . . when I don’t make much money?

. . . when we haven’t received a raise in 3 years?

You may think your most important job as an advancement professional in this situation is to address these questions directly and convince the prospective donor that they should give.

But it isn’t.

Your most important job is to help them better understand and embrace the truth that giving doesn’t take something from them, it gives something to them.  Once they fully live into that truth, the only significant question which will arise about their giving is, “how much?”

In advancement and development, the broader goal of everything we do should point toward spreading the universal human truth of the value and power of thanksgiving.

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More Data or Different Data?

Today, we have more donor and prospective donor data than at any time in history.  From wealth indicators to database analytics providing giving predictions, generating donor data can be as simple as conducting a google search or as complex as conducting a paid wealth screen.  All manner of donor data is ubiquitous and quite easy to acquire.

As an advancement consultant, there is not a week that goes by in which a client doesn’t want to talk about acquiring more (read: better) data.  More times than not, the sentiment driving the need for more data is fairly simple:  If we only had more data, we’d know what we need to know to raise more money.  If we only knew who in our database had significant wealth, we’d make our campaign goal.  If we only knew who in our database fit the profile to make an annual gift, we’d acquire more donors and for less money.  If only. . .

No matter how many reports we have commissioned or how much data we currently have, somehow the “silver bullet of fundraising” will always be found in the data we have yet to acquire.

But the “more data equals better fundraising” thinking isn’t backed up by the facts.  For instance, with more access to donor data and more institutions acquiring and using donor data in various forms every day, one would think that we are doing a better job of raising more money today than in the past.  But we aren’t.  Take a look at the national numbers.

For over 40 years, the U.S. has not moved significantly one way or another off of the stubborn 2% giving level of gross domestic product (GDP).  Yes, we’ve raised more dollars over time, but that is only because our economy has grown.  The fact is, people’s incomes are higher today than they were 40 years ago, which is why the gift dollars are increasing.  We haven’t been successful in getting people to give any more of what they make – for over 40 years!

To encourage more people to give more of what they make, perhaps we need to rethink our “more data” addiction.  Or, at least rethink the kind of data we actually should get addicted to.  When we say, “we need more data,” we almost invariably mean quantitative data.  We need more of the so-called “hard data” in other words.  The “real” data – donor scores, ratings, dollar amounts, etc.

But what if the key to raising more money is found not in quantitative data, but, instead, is found in qualitative and experiential donor data?  What if the true “silver bullet of fundraising” is found in the data gathered through meaningful interactions with donors in which they become engaged with our institution’s mission and we grow to understand them as people and not “giving units?”  Data that informs us of donor giving interests, values, generosity triggers, and relationships has a thickness and richness that quantitative data simply can’t offer.  And, it can help us raise more money.

There is an old saw in our work:  “It is your friends, not strangers, who will give to you.”  Developing friendship is a qualitative, time-intensive effort.  It takes care and effort.  It takes a different kind of data.  It takes attention to the whole person.

So, maybe we do need “more data” to raise more money.  It’s just that the data we should be collecting might need to be quite different.

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Humility vs. Transformation

There are two forms of humility.

A healthy humbleness emanates from an accurate self-perception that takes into account both your greater and lesser strengths.  It is rooted in the authentic recognition that you have distinctive as well as common characteristics when compared with others.  Healthy humility is supported by a genuine yet quiet confidence.

When we possess a healthy humbleness, we put our interests, abilities, and agency in context.  We listen more.  We set appropriate goals for ourselves and have fair expectations of others.  More importantly, the healthy version of humility keeps our ego in check so that we are discouraged from projecting a blustery, boastful nature.  A healthy humility is a strong and helpful trait to possess for development leaders.

On the other hand, meekness born from feelings of worthlessness, humility that emerges when we question our true value, or a humble spirit caused by doubts in our capability or capacity to achieve greatness are examples of unhealthy humility.  Unhealthy humility is an injurious characteristic to possess.

You won’t seek that promotion if you don’t believe you deserve it or think you can’t do the work.  You won’t push yourself to finish that degree if you doubt your intellect.  You won’t lean in and take responsibility if you believe you are or will be a failure.  In so many areas of life, you simply won’t reach your far edge of promise and transform your future if your humility is driven by fear.

Groups of people, even whole institutions, can experience unhealthy humility as well.  Some institutional cultures might find it difficult to build a compelling case for support and promote their goodness and distinctiveness because they possess an unhealthy humility at the institutional level.  They may not plan boldly around their distinctive strengths and opportunities because the unhealthy humble spirit of the institution encourages a more moderating outlook.

In many instances, when institutions struggle to plan for and passionately promote their missions, programs, and value, it is due to a collective belief, held deep within the fabric of the culture, that mediocrity is the best that can be hoped for.  There are questions of worthiness.  And there are serious doubts that the future will be any different. The accepted (but perhaps unspoken) refrain goes something like this:

“We’ve always struggled with our enrollment/fundraising/external relations because the world has never valued us the way others are valued.  Our future won’t be any different.”

When humility is healthy – when it is projected based on strengths, confidence, and knowledge, individuals and institutions will plan boldly, act decisively, engage others effectively, and achieve meaningful goals.  But when humility is unhealthy – born of feelings of worthlessness and questions and doubt, neither the individual nor the institution will do the meaningful work of planning, engaging others, and acting confidently.  And transformation will never happen.

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Receiving vs. Creating Gifts

You have two choices really:  either receive gifts from donors or create gift opportunities with donors.

Far too many development offices are content to receive the gifts that donors give.  These programs are reactive, unplanned, and regularly receive less than they need for their most important priorities.  The gift receiving mentality is regularly accompanied by an attitude that asking for gifts will be experienced as too bold, too greedy, or too uncomfortable.  Consequently, the gift receiving office is much better at extending thanks for a gift than soliciting the gift in the first place.

On the other hand, the most effective development programs create gift giving opportunities with their donors.  The gift creating program is proactive, strategic, and engages donors in serious ways.  Development officers ask questions about values, interests, and seek donor feedback.  Gift creating programs have standard meetings in which donor strategies are discussed.  And gift creating programs have a habit of asking donors for specific gift amounts for specific priorities.

Being a development professional in a gift receiving office is easy and comfortable.  Saying “thank you” is almost effortless and is accessible to just about everyone.   But if you want to do meaningful work for your institution – if you want to make a significant difference by increasing charitable gifts – you will work to create far more gifts than you receive.  Or, to put it another way in paraphrased form:  Ask first and, then, you should receive.

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Making A Real Difference: Moving Beyond “Metrics” to Strengthening a “Community of Giving”

As a consultant, not a week of client work passes without someone, somewhere asking me about “metrics.”  This word, “metrics,” has come to be used in so many ways that it is beginning to be difficult to understand exactly what people mean when they bring up the topic.  For instance, metrics can mean, “a tool to measure gift officer performance.”  Or, it can mean, “results we should track as an office to evidence our value.”  It is even sometimes used as a replacement for “benchmarking.”

However people may use this now ubiquitous term – metrics – they almost always are focused on advancement or development outputs.  Outputs refer to the activities, initiatives, events, appeals, etc., that we implement and the results of those activities.  Outputs are a description of our efforts or the specific return(s) of those efforts.  So, output “metrics” typically focus on measuring items like: number of visits, amount of dollars raised, number of donors who gave, number of individuals who attended an event, or average gift amount.

The question that the thoughtful advancement leader asks, though, is what difference improving any of these “metrics” really makes?  Why does increasing these numbers truly matter?  So, you raised more money this year as compared to last and more people came to your events – that sounds great.  But, as one of my graduate school professors used to demand of me when I was attempting to explain the worthiness of a proposed research question, “So what?  Tell me why should I care?”

In other words, “what difference does showing improvement in your metrics really make?”

To answer this question, people have started to use a phrase almost as ubiquitous as “metrics.”  You hear it everyday – everyone is seeking to strengthen a “culture of philanthropy.”  And while that sounds nice.  I’m not at all certain that people even know what that means when they say it.  Technically, I suppose, it would be defined something like an “environment in which the love of mankind is strengthened.”  But I’m convinced that is not what people mean when they use that phrase.

Instead, what most are trying to communicate when they use the “culture of philanthropy” phrase is an outcome that matters.  I would suggest most want to build and strengthen a “community of giving,” and are trying to say something like,

“I want more people to understand why giving more is important and to act with generosity toward our institution.”

Why then, don’t we measure what really matters more regularly?  Why don’t we survey our donors to find out how educated they are about our mission?  Why don’t we interview them to find out how important they believe our mission is?  Or, why don’t we engage them in focus groups to better understand how they view giving and their understanding of the psychological, emotional, physical, emotional, and life-extending benefits of giving?  And why don’t we track these measures over time so we can conduct trend analyses to see how much of a difference we truly are making?

Yes, we should be focused on more than activity-based, or output “metrics.”  We should be focused on improving much more important aspects of our work.  But, it’s not really a “culture of philanthropy” we are seeking to strengthen.  What we really want and know we need is a strong “community of giving” around our institutions – and we need to do a much better job of assessing that important outcome.

 

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