This guide covers the effect the COVID-19 pandemic has had on the ability of fundraising for higher education institutions and offers donor strategies, tips, and tools to assist schools in fundraising in the current economic climate.
By mid-March, more than 1,100 colleges and universities across the United States canceled in-person classes in response to the COVID-19 crisis. The choice to close was made with student-safety in mind, although it risked the financial safety of the institutions who made it.
Data-Driven Major Gift Campaigns
The empty campuses, online classes, and canceled events that resulted have left colleges with huge financial deficits and no apparent way to significantly increase much-needed funds. Now is the time to fundraise, the question is: how?
The first hit higher education institutions took was having to return prorated refunds to students for expenses like dining and housing costs, which previously had been dependable income. That income will continue to be lost for institutions that decide to stay closed during the coming semester.
Institutions who decide to open will continue to suffer from financial difficulties in regard to additional student expenses—having to find and fund alternative housing options. Some universities are contracting with area hotels to spread out students, while others are forcing students to move from dorms to off-campus homes. Both of these strategies will result in housing expense shortfalls, with the former resulting in institutions paying more to house students, and the latter resulting in fewer students paying housing fees for higher education institutions.
Further exacerbating the problem, due to the pandemic and subsequent recession, fewer students are interested in traditional four-year institutions at this time. A survey conducted by Arts & Science concluded that 1 in 6 high school seniors who were planning on attending a four-year college or institutions full-time this fall believe they will now take a different path. This decline in interest will inevitably lead to more lost expense-induced and tuition income.
If that wasn’t bad enough, higher education institutions are also having to deal with finding a way to effectively fundraise in this unprecedented situation. A survey conducted by Washburn & McGoldrick estimated that 43% of higher-education fundraisers would be unable to meet their goals this year, denoting that a tried-and-true method has yet to be found. Between losing expenses, tuition, and fundraising money, higher education institutions are in an undeniably precarious financial position.
There has not been an event like the COVID-19 pandemic in any of our lifetimes.
Everything has changed, so fundraising strategies must adapt. Below are some tips and tools you can use to help your college or university make it through this crisis:
Prior to COVID-19, personalized outreach to donors was of utter importance. Now, it is a necessity.
With an overwhelming number of worthy causes competing for donations, it is crucial that you communicate why your cause is equally important. The best way to make a compelling case is by being informed about what appeals to each individual donor, how much they can contribute, and other background information.
That information is at your fingertips with WealthEngines’ comprehensive platform. With WealthEngine’s real-time intelligence you can automatically personalize a prospect’s online experience.
WE Screen analyses donor profiles for you, segmenting them and providing wealth scores and ratings so you can easily find the right prospect to approach. This helps you identify who you should be targeting for fundraising campaigns, and how you should be targeting them.
Specifically, WE Screen helps you create a donor pyramid with wealth modeling so that you can precisely and effectively segment and target donors. A donor pyramid categorizes prospects based on their engagement levels, mapping out paths for nonprofits to move them from lower levels of commitment to higher ones.
An effective strategy for increasing donations now is emphasizing to donors how their contributions can help solve relatable and immediate problems within your institution and student body. Hot button projects at this moment are strengthening mental health programs on campuses, creating new programs for increasing student safety, and of course, financial aid.
One of the biggest problems higher education institutions will face in the coming school year is providing financial aid to students. Higher education institutions have to juggle their financial needs with the financial needs of students who are personally suffering from the recession or whose families are struggling due to the recession.
State aid to higher education institutions nose-dived during the Great Recession, and to this day, “except for a handful of states, spending per student in public colleges and universities, adjusted for inflation, remains far below pre-recession levels.” Adding to this burden is the likelihood that during and after coronavirus, the increase in financial aid costs will either rival or surpass the increases seen during and following the Great Recession.
In fundraising to provide financial support to students, schools should make a conscientious effort to demonstrate the impact of donors’ dollars, providing them with information about the students who have or will benefit from their financial support. In doing so, institutions will make donors feel more connected to the positive change they are making in student’s lives, increasing the likelihood they will continue to donate.
Donations from mid-level donors are often overlooked in favor of trying to win over top-level donors. This is a mistake. As a collective force, mid-level donors can be powerful.
Experts believe that the trend of mega-gifts from top-level donors will decline because of the pandemic. This prediction is informed by past trends of big-time philanthropists contributing a lesser amount of large cash gifts to institutions during crises.
However, experts predict that a surge of grassroots financial support from middle-tier donors is likely. Therefore, higher education institutions should direct their energy toward appealing to alumni for small gifts.
An example of this occurred recently when Eastern Michigan raised 2 million from small donations, often totaling between $25-100 each, which it then turned around and handed out to graduates and freshmen. The institution gave $600 to each graduate and $400 to each freshman in hopes of easing the financial burdens they were facing due to the coronavirus pandemic. By going for middle-tier donors, and setting a goal that would create measurable, relatable change, Eastern Michigan succeeded.
To determine which middle-tier donors you should approach, use the WE Analyze tool. This predictive lead scoring and analysis platform uses one of the largest consumer data sets ever created to quickly give you deep insights into your donors. You can use that information to find middle-tier donors most likely to donate to your institution.
Every workplace has been shaken up by the chaos caused by COVID-19. The key is to prioritize organization so that you are fully capable of taking advantage of all tasks and opportunities that arise, especially fundraising options.
A clean and accurate database will save your institution time and resources. You will never need to track down lost alumni or update records with an accurate email address, phone number, and other contact information.
WealthEngine can provide you with that database, organizing your systems with real-time integration through its easy-to-use technology and strong partnerships with leading software providers. Spend less time organizing, let WealthEngine do it for you.
The inability to hold on-campus events will definitely hurt higher education institutions. After all, a pillar of U.S. universities is the events that campuses hold for prospective students, current students, alumni, and community members. Higher education fundraising events are incredibly important to institutions.
Higher education institutions receive the majority of their donations from two sources: online donations and in-person fundraising events. Losing one of those sources will inevitably lead to higher education institutions receiving less donation money. You can mitigate that loss with online events.
Get creative, many organizations have been using platforms like Zoom to hold musical events, social events, and ceremonies in the absence of in-person gatherings. You can easily construct an invite list by using WealthEngine’s database. It contains over 90% of the US population, and you can choose from over 1,500+ attributes to construct the perfect, customizable list.
Some of your donors may be thriving financially right now while others may have suffered considerable losses. It’s important to keep track of changes in the financial outlook of your donors.
Using WealthEngine’s WealthScore feature, you can quickly identify prospective donors and predict their giving levels. WealthEngine’s extensive wealth screening analytics tools give you a solid understanding of who has the capacity and propensity to give.
WealthEngine’s data is comprehensive and up-to-date, providing you with the necessary tools to keep your donor list up-to-date.
Our present has been completely altered by the pandemic, so naturally, the future will be, too. What the future of fundraising will look like is still not completely clear, but below are some informed predictions from experts:
Large capital gifts to fund campus building projects will likely be a thing of the past. Previously, some of the largest fundraising growth was in the capital project arena; however, it’s a hard-sell to collect donations for campus buildings on empty campuses.
The immediate growth in student financial need has led some higher education institutions to create initiatives that provide aid to students. Davidson College, UCLA, and Penn State are just a few of the higher-learning institutions that have recently rolled out initiatives to help students who are facing coronavirus-related hardships.
This push to use donations to help students may be met with some reluctance from donors. A CASE study found that alumni donors prefer to donate to athletics rather than donating to financial aid.
Another fundraising priority schools should consider is raising money for technology upgrades so that they can improve their online learning capabilities. Most economic experts agree that trends toward donating to medical and scientific research and STEM initiatives will develop.
Due to the recession brought on by COVID-19, donors are limiting and freezing their donations and gifts. This is unsurprising when you take into account donor responses during the last recession.
Paul N. Friga, a clinical associate professor at UNC found that general philanthropic donations in America in 2008 dropped 11.7% from 2007, a drop that was mirrored by a double-digit drop in donations to higher learning institutions. In 2009, UNC experienced a drop of $30 million in philanthropy, along with a significant drop in state support and endowment returns. This totaled out to equal 25% of the previous year’s operating revenue.
This decrease in philanthropy, when higher education institutions have already taken a huge financial hit due to shutting down campuses, will be detrimental, forcing the closure of even more schools. In 2009, UNC dealt with the loss of income by raising tuition, but that doesn’t seem like an option in the current financial climate. The recession has led to families tightening their belts, an effect that puts expensive institutions at a disadvantage.
Since 1988, colleges and universities have increased tuition by 213% and student debt is at an all-time high, equaling $1.53 trillion across the US. Because of the recession, and the already dramatic increase in tuition over the years, schools that raise tuition more to make up for losses due to COVID-19 will likely see a dramatic decrease in applications. One of the best options available to schools is to adjust fundraising strategies to try to mitigate losses.
Try a free demo of WealthEngine today! WealthEngine’s experts will guide you through using the platform’s comprehensive software, showing you all the benefits it has to offer. WealthEngine consultants take a personalized approach to your fundraising endeavors, making sure you understand how to best apply WealthEngine’s full range of tools including Wealth Search, Wealth Screening, Trend Analysis, and numerous others to optimize your college or university’s fundraising campaign.
Euromoney People Intelligence, a divisional pillar of Euromoney Institutional Investor PLC, rebrands its business as Altrata,…
WealthEngine’s sister company, Wealth-X, published the nineth edition of the World Ultra Wealth Report last…
Retaining current donors and drawing new supporters is key to the health of any nonprofit.…
Millennials will be the largest proportion of the wealthy and their giving practices shouldn't be overlooked. Organizations…
Successful nonprofits should look for new funding opportunities. In recent years, venture philanthropy has been…
This guide covers top giving trends for social justice causes, the future of donor landscapes,…