In the stock market investing world, two fundamental approaches hold court: Value Investing and Growth Investing.
Value investing suggests that investors pay attention to the stock price of a company and compare that price to what they believe is the actual value of the company. If the current stock price is low compared to the current company valuation, then the stock is said to be a “value” and potentially worthy of purchasing.
On the other hand, growth investing doesn’t pay as much attention to the current stock price. Instead, growth investors look at a company’s future growth potential. If they see a future for the company with significant growth in revenue and earnings, then the stock may, potentially, be worthy of purchasing.
Similarly, in advancement, we employ different approaches which have some parallels to value and growth investing. For example, we might term as a “value” advancement program a Young Alumni Council into which we invite a select few younger alumni who possess early career and financial promise. The idea is that these prospects could be a great “value” for us. We probably won’t have to spend a lot to engage them and, while they may not be able to give much in the short term, they hold the promise of being able to become significant donors later in life.
Or, we might term as a “growth” advancement approach the creation of a major gifts portfolio made up of mostly discovery prospects with significant wealth but with little connection to our institution. Because they possess significant wealth profiles, they represent “growth” prospects for us. It may take more effort and resources to capture their attention and engage them meaningfully, but the giving results could be significantly positive.
Especially when there is pressure to increase gift income for today, it’s easy to grasp why an advancement team might employ more “growth” advancement opportunities. Even though it is difficult to engage wealthy prospects who have chosen to be unengaged, these prospects possess the attribute most needed in the moment: they have a high-net-worth.
“Do what you have to do to engage the prospects that have the money!” could be a clear mantra. “We need results sooner rather than later!” could be the charge from institutional leaders.
When an advancement team is under significant pressure for current gift income, the most understandable question to ask could be:
“Which approach quickly gets us what we need most today?”
But a far more wise and helpful question might be:
“Which approach got us into this position today?”
Approaching our work from a “value” mentality can offer a healthier approach to longer-term advancement productivity.
When we put time and resources into building relationships with prospects who possess life-long giving promise, we give our programs the best chance to effectively support our institutions over the long haul.
And, maybe, we help our institutions steer clear from experiencing difficult periods marked by desperate financial pressure.
