Three Factors that Impact Giving

Three Factors that Impact Giving

By Chris Arnold and Stephen Dicicco, Co-Founders of Educational Directions Inc.

Experts exploring data about philanthropy are discovering some surprising truths, with the most important one being that fundraising itself does not have the impact they once thought: “Most institutions pursue [philanthropic gifts]…based on a flawed assumption—that fundraising in itself engenders philanthropy. It doesn’t. Fundraising harvests philanthropic goodwill; it doesn’t produce it” (“Cultivating a Culture of Philanthropy: New Approaches to New Realities,” by James Michael Langley, Trusteeship, July/August 2014).

With 72 percent of philanthropic gifts coming from individuals, a closer look shows that large gifts (over $1 million) typically follow 15-20 years of modest giving. Also, once a donor has given 15 annual gifts, the possibility of that donor giving a large portion of his/her estate increases by 80 percent.

“A culture of philanthropy cannot be built without attracting and retaining, over two or more decades, a significant quotient of loyal alumni donors.” Instead of fixating on overall dollars raised, an attentive board should examine the number of donors who give for more than 10 years and ways to strengthen that longevity.

The data suggest that there are three factors important to long-term giving:
• Appreciation: Generous alumni share a belief that their education had value far in excess of the tuition cost. These alums may have a particular professor or coach whose influence was profound, or they may have been inspired by school traditions and rituals. Caution: The higher tuition costs of recent years are having along-term negative impact on giving, with alums feelingthey already “gave” enough.
• Affiliation: Alumni who continue to be actively involved with the school after graduation are more likely to be generous. The feeling of affiliation needs to be fostered by schools with an investment in alumni relations rather than simply asking for money over and over again.
• Agency: Generous donors believe that they are not only  giving to their school, but they are giving “through it to create a better world.” They also need to believe that their “philanthropic investment can take an institution, or some critical part of it, ‘from good to great.’” Schools can nurture agency by defining the distinctive ways the school can contribute to society.

“Cultures of philanthropy can no longer be cultivated by asking alumni to merely ‘come back, look back, and give back.’” Instead, to create a culture of philanthropy, board members can pursue several initiatives:
• Ensure the school has impactful rituals so students feel strongly about the school community
• Support faculty who are devoted to “setting high bars for student learning”
• Advocate for alumni relations activities that are substantive and “afford respectful, reciprocal, multidimensional relationships with alumni.”Overall, the board needs to look beyond merely fundraising and toward creating a culture of philanthropy so that the board may fulfill a bigger responsibility: “to ensure that the institution that it passes on to its successors is more distinctive and sustainable than that which it inherited from its predecessors.”

Boards & Trustees Related Blogs