It’s a race against inflation as colleges focus on fundraising strategies to fill in funding gaps
RALEIGH, NC – July 6, 2022 — Like every other industry right now, higher education is grappling with the effects of raging inflation. Now at its 40-year high, inflation is inescapable, unsustainable, and is testing the financial stability of colleges across the country.
Bill Crouch, founder of BrightDot, a fundraising consultancy and long-term college president, has published the first in a three-part series: INFLATION PREPARATION to help colleges get a running start to attract more students, donors, and get spending under control.
In this three-part series, Crouch focuses first on fundraising – finding and retaining donor support. INFLATION PREPARATION 102 addresses student enrollment and 103 examines rising costs and capital expenditures.
“What we’ve found is that most colleges are missing out on the biggest opportunity to fund their institutions: DONORS,” explains Crouch. “They’re relying primarily on State, Federal and tuition funding to operate when that’s where they have the least control.”
“Fundraising is the fastest, most controllable, most predictable way to ensure sustainable incoming funds.”
Is there any way to catch up in the race to find donors?
YES. Get there first!
But before getting into other solutions, let’s take a deeper dive into the problem itself.
HOW DOES INFLATION IMPACT HIGHER EDUCATION?
- When inflation jumps, the value of money decreases rapidly, diminishing what an institution can purchase with the donations received.
- Growing pressures from inflation are likely to translate into higher operating costs for colleges, most of which will not be able to compensate by raising tuition.
- The impact of inflation is expected to pose the biggest challenge for institutions that already have limited financial flexibility.
- Because so many organizations receive a significant amount of their donations at year’s end, the budget implications may only now be coming into focus.
- There is no sign that inflation is slowing so pressure on higher education institutions will continue for the foreseeable future.
- Development officers need to tackle this problem head on in planning for the rest of this year’s fundraising efforts, including recasting their appeals to address what’s happening.
WHAT CAN I DO?
- The best strategy to attract and retain donors is to implement a loud, effective, and focused fundraising campaign. And do it NOW.
- Donors don’t understand inflation’s impact on the education sector. It is our responsibility to explain it to them. They may unknowingly reduce the value of their gift because they don’t see inflation as dropping the value of money. They are inadvertently giving less because they don’t recognize the decreasing purchasing power of their donations. It can take years for donors to adjust on their own. That’s why it would be smart for fundraisers to be clear about the impact of inflation directly in their appeals.
“Fundraisers should show donors that when there is 8 percent inflation, their donation may not have the same impact.”
- Identify the TOP 5% of wealthy donors in your current donor pool and focus on them first. Hire a professional fundraising company and send your staff to training from people who have access and experience with this audience.
- The reality is, high wealth individuals won’t be as affected by inflation, so those relationships should be established early so you’ll be more prepared long term. Offset rising prices for goods and services by expanding fundraising efforts to include in-kind and product donations. Many corporations offer these types of support. Corporate giving programs are also a terrific way to connect with a pool of potential volunteers, including highly skilled labor.
- Get creative. Countless examples exist where marketing, preview events, alumni gatherings, special campus events such as lectures, performances in the arts, and athletics can allow the college to tell its story and demonstrate its mission to prospective alumni, donors, and friends.
- Most development professionals agree that attracting a new donor and sustaining a current donor depends on the message of mission success. Ensure your fundraising message is clear. Donors want to give where their resources are making a difference. Stories must be told and shared.
It’s all about figuring out who your best donors are and then creating a program that encourages them to give.