- Email: [email protected]
Fundraising in hospitality education: The role of deans and directors
The B&B Guest: A Comprehensive View by Bobbi Zane
pp. 69-75
Selecting that First Job:
How Students Develop Perceptions about Potential
Employers by Michael P. Sciarini and Robert H. Woods pp. 76-81
IN
Brief
Teaching Hospitality Courses through Distance Education:
A Personal Account by Susan S. Hubbard
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executive
pp. 82-86
summaries of this issue's feature
Fundraising in Hospitality
articles
Education: The Role of Deans and Directors
by Philip A. Conroy,.Jr., and Michael M. Lefever pp. 87-95
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A nationwide survey of almost 1,400 B&B guests provided an overview of those travelers' characteristics. Among guests' top-ten desirable B&B features are (1) a private bath, (2) a sense of privacy, (3) a quiet atmosphere, and (4) an innkeeper who tells of local sights and restaurants. The majority of B&B and country-inn guests are baby boomers, with a median annual household income of $73,000. Almost all were college educated, and 36.4 percent of respondents listed their occupations as professional. Inn guests spend 2.35 nights on a B&B getaway, and respondents projected that they would take 2.62 trips involving a bed-and-breakfast stay in the coming year. A couple typically spends $225.72 per day during a B&B visit for food, lodging, and other purchases.
From a preselected list of 20 items that may influence students' impressions of potential employers, 550 U.S. hospitality students from 19 schools ranked those factors and assigned those involving personal interaction the highest ratings The most influential factors were (1) Experience with the company as a consumer; (2) Word of mouth from faculty members; (3) Word of mouth from alumni; (4) Oompany representative's personality; (5) Word of mouth from students; (6) Guest lecturers in class; (7) Company representative's appearance; (8) Company participation in job fair; (9) Three-month work experience, internships; and (10) Oompanysponsored tours. Least influential were company-sponsored scholarships, company videos, company-sponsored social events, and company information on the internet or worldwide web. The experience of a professor in the hospitality program at Auburn University (Alabama) in taping classroom lectures and discussion has mostly been favorable. Moreover, offering courses via videotape has enabled students in remote locations to work toward advanced degrees while they continue to work (undergraduate courses are not so offered). Setting up classroom sessions for the camera places some restrictions on the faculty member, requiring considerable advance planning, reducing flexibility in class, and possibly inhibiting discussion among students in the classroom. On the other hand, live classes are more interesting to tape than studioonly lectures. Moreover, the camera goes along on field trips. Videos go to the distant students with little or no post-production editing. The faculty member reported that any negative aspects are more than offset by positive factors, primarily the efficiency of teaching via videos. Fundraising campaigns are an essential aspect of hospitality-education programs. While the dean or director is a key member of a fundraising team, fundraising campaigns also require the assistance of development professionals and committed volunteers. The three steps for initiating a fundraising program are: create a written development plan, compose a case statement, and recruit volunteers. The annual fund is the beginning point for most fundraising campaigns and for most donors, as annual-fund gifts are relatively small and are made regularly. Despite the importance of operating an annual fund, the bulk of donated funds come from major gifts, which must be cultivated. Three solicitation methods are direct mail, telephone calls, and personal meetings.
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l:undralsingin HospitaliW" Education The R01e 0fDeans and Directors by Philip A. Conroy, Jr., and Michael M. Lefever
Fundraising is an essentiaJ aspect of a program bead's responsibility, but it is also a team effort,
E d r a i s i n g has become an essential function for nonprofit organizations generally and for college and university programs particularly. In the case of colleges, fundraising fills two essential functions: it provides annual revenue that helps stem the rise of tuition (already viewed by many as high), and it builds endowments that provide funds for the scholarship aid that helps offset high tuition costs. This is not to mennon increasing the number o f stakeholders in the program to enhance other facets, such as career days, visitinglecturer programs, and gifts-in-kind. At the same time that fundraising's importance has grown, the prospects for developing a successful fundraising campaign have expanded greatly. While money is certainly not dropping from trees. nonprofit and charitable organza-
tions have the potential for tapping a substantial reservoir of capital. In the next several years nonprofit organizations that develop appropriate fundraising structures may share in a substantial transfer of wealth now occurring between generations. In addition, new wealth is still being created by various entrepreneurial endeavors. Your hospitality program has an excellent opportunity to attract investment from both generations of philanthropists--those
Philip A. Conroy, Jr., M.Ed.. is director ~f development, College of Food and Natural Resources, at the University of Massachusetts-Amherst. Michael M. Lefever, Ph.D., is director of the Cecil B. Day School of Hospitality Administration at Georgia State University. © 1997 Cornell University
August 1997 , 87
who are about to transfer their wealth and those who are still building it. These funds will come to your program, however, only if you organize your fundraising efforts effectively, because the competition for those funds will be considerable. As the dean or director of a hospitality-education program, you are a key player in the development effort, but you are by no means the only player. We believe you should allot time for fundraising, but it should not overwhelm your schedule. We surveyed 39 program heads to find out how much time they assign to fundraising duties. 1 We did not control for length of workweek or other intervening variables, so our figures are indicative only. The mean amount of time reported was just under 14 percent, but the range was large--from no time at all to 75 percent in one case. We found that the directors of two-year programs spent, on average, far less time on fundraising responsibilities than d i d the heads of four-year programs (two-year mean, 7.3 percent; fouryear mean, 16.7 percent). The percentage of time spent on fundraising by 12 heads of two-year programs ranged from zero to 33 percent, while the 27 responding four-year directors reported spending from zero to 75 percent of their time on fundraising. To those who are spending little or no time at all, we suggest greater involvement. In this article we outline the essential steps of creating a successful fundraising program, based on our experience at Amherst and Georgia State.
Three Steps G. Douglas Alexander, president of the Atlanta consulting firm of Alexander, Haas, O'Neil and Martin, tWe sent surveys via facsimile to 100 deans and program directors in April 1997. We received 39 responses. The survey asked the percentage of each respondent's work week spent on fundraising.
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suggests three "absolute essentials" in preparing to raise funds for an organization. 2 Those three key steps are: (1) develop a detailed written development plan that reflects your program's strategic plan; (2) carefully define your program's case for support; and (3) recruit volunteer leaders to attract the resources you need to meet your program's goals. Most hospitality-education programs are part of a larger university organization (often a business school). Within the university structure are resources for assembling an effective development program. While you as dean or director are a key figure in the fundraising and development effort, you should not attempt to raise funds singlehandedly. Instead, your chief role is to identify and define the areas that need funds, work with the university's development staff members, and provide leadership to guide volunteers and staff members through the fundraising process.
Working with a Development Professional Because your fundraising efforts will be competing with those of other groups and institutions, you as dean or program director must develop a close working relationship with a development professional. Large programs will be able to employ a development specialist as part of the administrative team. Indeed, many of the largest hospitality programs have made an investment in hiring a full-time development director. The usual model, however, is to rely on a college development specialist who devotes a portion of her or his time to the hospitality department's campaign. This individual will assist you in identifying program priorities, assessing the potential for funding those priorities, creating the plan 2G.D. Alexander, International Conference on Fundraising, Dallas, March 22, 1997.
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that outlines the program's priorities, and developing strategies for a fruitful campaign. In addition, the development specialist should assist with the identifying, cultivating, and soliciting of major and planned gift prospects and donors, as well as stewardship of their gifts. The development specialist's primary responsibility is to make sure that someone asks for a gift. While the development specialist should always be part of the solicitation team, that person will not necessarily be the person to ask for the gift. The dean or director or a volunteer from the hospitality industry who serves on your advisory board might be a more appropriate person to ask for a gift, depending on the prospect and the size of the person's gift potential.
Step One:The DevelopmentPlan The most important step in fundraising is to create a written development plan. (It is essential that the plan be in writing.) A written plan keeps you on track and provides opportunities to measure the program's success. The plan should include: • an introduction describing past fundraising accomplishments, • a statement of the program's current state, • goals for the future of the program, • cost estimates of future projects, • steps that must be taken to achieve the necessary funding (e.g., identification of volunteers), • a fundraising schedule, and donor-recognition plans. The plan should include details on fundraising strategies to be employed, such as annual campaigns, major gifts, and planned giving. If your program plans a capital campaign, that should be mentioned in the overall development plan, but the capital campaign requires a plan of its own. •
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The fundraising plan should include sections on budget and staffing; gift-tracking procedures; and donor-recognition programs. The plan should also set forth a schedule of publications that will support the program, and the cost of those publications should be included in the program costs. Publications are excellent tools for informing constituents of your fundraising campaign, highlighting your needs, soliciting contributions, recognizing donors, and showcasing the success of past campaigns or projects.
Step Two: Develop a Case Statement Perhaps your most important publication is the case statement. The case statement, which you present to your prospects, should emphasize how their gifts to the hospitality program will benefit them. The best case statements emphasize a great past and an organized future, with an explanation of how the mission of the program can be achieved through donor support. (Building the case for support is particularly
important for a capital campaign.) The case statement establishes the vision for the organization's direction and also establishes the boundaries for the support needed to meet the campaign's objectives. As an example, the University of Massachusetts has a six-year campaign based on three goals: (1) raise $125 million to support changes initiated by strategic planning; (2) recruit 3,000 new volunteers; and (3) strengthen the university's image. Each of the university's schools has its own campaign design, as do the largest departments, including the department of hotel, restaurant, and travel administration (H1KTA). The campaign statement is generally presented in a well-designed publication that is easy to read. The key elements are a vision statement from the organization's leader, a historical narrative that sets the stage for the vision of the organization's future, vignettes describing the suc-
cessful people and programs that the campaign will support, and priorities for the program with specific dollar goals. The essential points of the University of Massachusetts campaign case statement are as follows: Campaign theme: To Dream, To Act, To Lead
Vision statement: From Chancellor David Scott
Historical narrative: Discusses the evolution of the university from a college of agriculture to a comprehensive land-grant university with an international reputation for research, teaching, and service.
Campaign priorities: • $40 million to endow 30 faculty positions; • $5 million for merit scholarships and financial aid; • $5 million for student services and programs; • $40 million for college-based initiatives; • $5 million for the library; and • $30 million for campus facilities.
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are monetary. Perhaps the most important supporters of your The following is an example of the pitfalls of debt-reduction program are the senior campaigns, which are difficult to conduct even for worthwhile purposes. Several years ago a foundation related to a decision makers at large state university entered into negotiations to purchase your university with a horse farm for the university's nationally noted equinew h o m you will work studies program. The farm's owner was bankrupt, and the as you position your purchase represented a tremendous opportunity for the university. The case for purchasing the farm was compelprogram and seek a ling: the farm's asking price represented an incredible prominent position in bargain; the farm was in excellent condition; it offered all of the institution's fundthe facilities needed to house the program; and it was close to the university's campus. In short, all of the elements for a raising program. The successful fundraising campaign were present, except one. process of identificaIn fact, the campaign was not successful, largely because tion, cultivation, sothe decision was made to borrow the money to purchase licitation, and stewardthe farm and then raise the funds to reduce the debt. The university learned a hard lesson--to wit, the more compelship is the same for ling case would have involved raising funds first (with a both internal and exworst-case plan of borrowing any funds that could not ternal donors. In many be raised) during the 12 months that the foundation was cases, you will be asknegotiating with the owner and dealing with the bankruptcy trustee.--P.A.C, and M.M.L. ing for an allocation of resources to support your program. You As a large part of the College of should, therefore, develop a strategy Food and Natural Resources, the to convince your institutional leaders to support your program's funddepartment of H1KTA has responsiraising agenda through their active bility for a substantial part of the college's campaign, which parallels participation and the allocation of resources to implement your fundthat of the university. The H R T A raising strategy. department's campaign priorities Hospitality programs and their are: $1.5 million for an endowed constituencies often have high prochair in hospitality leadership, files in a university because the $300,000 in annual support to hospitality program frequently arthe department, and $10 million ranges the institution's events. Wellfor a new H R T A building and arranged events demonstrate your equipment. program's strengths both to univerStep Three: RecruitVolunteers sity leaders and to outsiders. At the same time, however, your case stateThe campaign must have a strong ment can allude to weaknesses-group of volunteers. The person that is, what you could do with chairing your campaign will be a additional funding--so that univervolunteer, and this essential person sity decision makers will consider will then assist in selecting members positioning your program near the of the volunteer board. If you altop of the university's fundraising ready have an advisory board, the agenda. pool from which you may select the The president or chancellor is a campaign chair and chief volunteers volunteer and a donor in the sense already exists. Your advisory board of giving time and talent to advocan be the campaign's volunteer cate and eventually solicit gifts on organizing board. behalf of your program. This person Melding with the institution. is one of your most important volEveryone you come in contact with unteers, w h o m you should ask to is a potential donor to your prowork actively on behalf of your gram--although not all donations
The Problem with Debt Reduction
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fundraising agenda. The same is true of other key members of the university administrative team (e.g., provost, chief academic officer). Good volunteer leadership is essential for your fundraising success. G. Douglas Alexander noted: "Volunteer leadership will be the most important asset of a nonprofit organization. ''3 The members of your advisory board should be some of your best major-gift prospects. If they are not actual prospects, they should be individuals who can attract major gifts for your program through the people they know or the corporations for which they work. In addition to their advisory role regarding curriculum, members of the industry advisory board have three essential roles in the development program: to serve as an advocate for the program, to assist with the development of the program's public image, and to assist with the fundraising plan. 4 They are the volunteer leaders who will make your development program successful. As in other parts of the development program, expectations for board members must be defined in a plan. The operating plan for the board outlines the responsibilities of the members with the explicit expectation that they will be donors to and sohcitors for the program. Since your best solicitors will come from your advisory board, the following rules of organization apply: • The strongest solicitors should make the biggest calls; • N o volunteer is assigned more than five calls at one time; • Largest gifts are solicited first (sequential fundraising); and • Leadership and top prospects are solicited before one moves on to other prospects. 3Ibid. 4See: Philip A. Conroy and Michael M. Lefever, "The Value of College Advisory Boards," Cornell Hotel and Restaurant Administration Quarterly, Vol. 37, No. 4 (August 1996), pp. 85-89.
Identifying Prospects The first donors identified in many
fundraising campaigns are hospitality corporations, but corporations are no longer necessarily in a position to make large gifts. While corporate giving can be an important part of a campaign, it should not be the centerpiece of your development program--if only because corporations face so many requests for support. The source of more than 80 percent of all philanthropic dollars in the United States today is individuals, not corporations or foundations. 5 In seeking the best individual donors, the best approach is to look at your natural constituencies first. For an educational institution the constituency usually means graduates-particularly graduates who have benefited professionally and personally from the education they received in your hospitality program. Even when you are cultivating a corporate gift you are really working to establish a relationship with a single person or a small group. Usually you are meeting with the C E O or a group of influential managers who can make a decision about a gift to your program. In both corporate and individual giving, the essential concept is that people give to people. Donors give because they are asked by the right person at the right time for the right amount.
Your Personal Gift Whether they are paid professionals or volunteers, the best fund raisers are people who have already made a personal gift to the program. As the program's dean or director, it is essential that you show your loyalty and commitment to your own hospitality education program by being 5See, for example: Beth J. Harpaz, "Economy Boom Pays OFFfor Charities" (Associated Press item), BhacaJournal, May 29, 1997, p. 8A.
a substantial donor to the program. You should make a gift that indicates a personal sacrifice. If you have donor-recognition clubs or societies, you should strive to be a member of the top giving club.
The Annual Fund The annual fund serves as the foundation for the remainder of the fundraising program. This part of your development program provides unrestricted funds for many purposes. One excellent approach is to apply annual-fund gifts to scholarships so that other revenues can be used to meet the program's operating needs. Because they have already made a commitment to the mission of your program, the donors to the annual fund are your best prospects for other types of gifts, as well, such as major and planned gifts. Your development plan should have a detailed section dealing with implementing the annual fund. This appeal should be designed to solicit support from all of your natural constituencies--graduates, students' parents, and friends of the program--plus a corporate solicitation that appeals to the organizations that have a relationship with your hospitality program. If you cannot establish a relationship between your hospitality-education program and the person or organization from which you plan to ask for an annual gift, you probably should not ask. Once again, your program's fundraising must be coordinated with the university's fundraising program. Universities commonly appeal for general unrestricted support in the annual fund. Since your goal is to ensure that your constituents' gifts are designated to the hospitality program, solicitation of your top annual-fund prospects is best handled with a separate mailing, a separate telephone-solicitation campaign, and assistance from your development professional.
The annual-fund plan should include a set goal for the amount to be raised; the overall objectives of the annual-fund program; the reason you are raising the money; the strategies for solicitation, such as direct mail, volunteer solicitation, or telephone solicitation; and the fundraising timetable. As mentioned above, the case statement that you present to your prospects should emphasize how their gift to the hospitality program will benefit them. Your solicitation material--whether it be, a fundraising letter, a script for a telephone solicitation, or talking points for a personal solicitation visit-must ask each prospect for a gift of a specific amount that's appropriate for that donor. R e c o g n i t i o n . Deciding how donors should be recognized is an essential part of your development plan. The plan should outline the appropriate recognition for different fundraising projects (e.g., various levels of giving). The nature of the gift for a particular type of recognition should be "market driven." For example, if you are constructing or renovating a building, the gift that puts a donor's name on the lobby should probably be set at an amount that is higher than gifts to name some of the other rooms, even if the other rooms actually cost more to build. The point of name recognition is that larger gifts should garner greater exposure. Your policies on naming buildings and rooms should be carefully established. We have observed some awkward moments in some programs' campaigns when a space has been formally named as the result of a pledge but for some reason the pledge was not honored. You should consider a membership organization for your best donors, especially for corporate prospects. Several hospitality-education programs have implemented orga-
August1997 , 91
nizations such as a "hospitality leaders council" that confers certain benefits for donor-members. M e m .~s must be ;t be able omise and, ~s, you will ~et value provided ar's tax ssary or ns (e.g.,
3rk). emiums is pport to ns and e same :ional orge that the l, coupled :s' names ocument, recognia permamajor gifts }me donors may appreciate dinners or personal access to the dean or president, but premiums are an expense that can detract from needed support to other parts of your hospitalityeducation program.
Approaches The goal of any fundraising program is to raise the greatest possible amount of money at the least cost. The more personalized the solicitation, the greater the yield in dollars but also the greater the cost of running the campaign. Every fundraising campaign uses one or more of the following means of asking for money: direct mail, telephone solicitation, and personal solicitation. D i r e c t mail. Direct mail can be the least expensive way to raise funds, but it also has the lowest yield of all approaches. Response rates for a direct-mail solicitation for small gifts range from 2 to 10 percent, and its use is inadvisable for potential
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donors of large gifts. Your directmail materials should be as personalized and professionally prepared as possible. Because your request for funds will have a great deal of competition in recipients' mailboxes, your goal is to have the envelope capture the prospect's attention and encourage the recipient to open the envelope and read the material. Once the person opens the envelope, the package must convince your prospect to sit down and write a check for at least the amount you requested in the letter. A tall order, indeed! T e l e p h o n e solicitation. Telephone solicitation has the potential to reach the most people directly, and it can therefore generate a strong flow of donations. The downside of telephone solicitation is that it is intrusive and can offend your potential donors if handled badly. Moreover, your telephone campaign faces competition not only from other nonprofit organizations but also from commercial enterprises selling any number of goods and services via the telephone. Many colleges and universities have well-organized telephonesolicitation programs in which students request funds over the telephone. Whether you have students or graduates call (or other volunteers), callers must be well-prepared and have solid information about your program. The generally accepted rule among fundraising professionals is that a person w h o m you telephone will give 25 percent of the requested amount about half the time. You might be tempted to retain a firm that specializes in fundraising by telephone. However, you should use caution when considering the use of an outside consulting firm. Check references to see that the firm you are considering is not guilty of using high-pressure tactics on potential donors. Should you
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retain a fundraising company, choose only a firm that charges a flat fee for its services, rather than one that charges a percentage of funds raised to remove the solicitors' "boilerroom" temptation to pressure donors for higher-than-appropriate gifts. Personal solicitation. The method that yields the greatest return but is the most expensive to implement is personal solicitation, usually by volunteers. There's a direct correlation between the time and money invested in preparing and managing volunteers and the amount of money raised. The most effective form of personal solicitation involves a volunteer asking for a gift from a peer--and it is even better when that volunteer can give personal testimony as to the importance of supporting the program based on his or her own gift or experience, in the case of cash-poor recent graduates. Loyal annual-fund donors make the best volunteers for seeking funds from their peers. In our experience, the prospect in a properly handled personal call is likely to give at least half of what is asked about 75 percent of the time.
Annual-Fund Details The best time to conduct an annual-fund campaign is in the final third of the calendar year (September through December) to take advantage of end-of-year tax decisions. While there is no bad time of the year for a fund drive, the leastdesirable time to conduct a campaign is during the summer months. Each technique used to solicit funds should be evaluated separately. The returns on the investment in a new annual-fund program, which usually depends heavily on direct mail and telephone solicitation, are generally a number of years in corning. As your fund program matures, personal solicitations will become more important. You will also be
asking your best donors to increase their commitment to your organization by increasing the size of their gifts and probably to serve as volunteer fundraisers. The selection of the best approach depends on your knowledge of your donors. If a donor responds best from a telephone call, then make the call. If the donor hates phone calls but responds well to a letter, then by all means send a personal letter and save the phone call to say thank you. 6
Major Gifts Major gifts are the sign of a mature and well-planned development program. Such gifts provide the endowment, capital investment, and operating funds that will make the greatest difference in your program. The receipt of major gifts provides an infusion of funds that permits the program to meet both capital and program needs. The key to a successful major-gift program is to establish strong relationships with prospects and donors. Most people give just one major gift to a particular institution (and possibly just one in a lifetime). The donor tends to make the gift from principal assets rather than from income. Major gifts are the most important part of an organization's private support program. It is commonly accepted among fundraisers that 80 to 90 percent of money raised by nonprofit institutions are in the form of major gifts. The best major-gift prospects are those who have indicated an affinity for your program through annual gift support. There are exceptions, of course, and a well-developed prospect-management program must include research into each prospect's ability and propensity to give. Most 6Admittedly, such knowledge requires extensive record-keeping, a topic beyond the scope of this article.
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hospitality programs should look to their host institution's development office for prospect research and for the necessary computer support that makes such research possible. The purpose of managing majorgift prospects is to advance from identifying a prospect to receiving a donation. The steps in the classic pattern are early cultivation, cultivation, solicitation, and stewardship. During early cultivation, the development-staff members identify the prospect and assess the level of the person's interest and involvement. If the person seems amenable to supporting the program, the development officers or volunteers involve the person with the institution during a series of events and activities. Eventually, the prospect begins to feel ownership in the program. Indeed, most major-gift prospects will not make a donation until they feel some personal involvement with a program. When campaign officials believe the time is appropriate, they will make a solicitation, actually asking for a specific sumiofmoney. During the ensuing conversation the prospect (soon to be donor) and the development professional negotiate the specifics of any gift and the donation is offered and accepted. The most important phase of the process is stewardship, in which groundwork is laid for future gifts. The dean (and president, if appropriate) thanks the donor and then demonstrates to that person how the program is using her or his gift. It may even be appropriate for the donor to take part in the program that is funded by their gift. The best major-gift solicitors are always well-informed about the program, the institution, and the prospect's relationship to the program. Programs should avoid "we need tile money now" strategies. Most major gift donors are motivated by a desire to have a profound, positive effect on other people.
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As in the annual-fund program, the major-gift program should be written into the overall develophe major-gift : the needs of which projrogram need e dollar cost ', is critical to Ljor-gift promembers, tculty can lead est maj or-gift Ffund program takes • The cuhivaprospect can lg several be part of the veloped for a carefully to ch your ', prospect's ask for a gift lething as simple as the prospect's change in the use of pronouns from " y o u " to "we." This shift indicates a critical degree of ownership•
Other Giving Programs You may also conduct specialpurpose fund drives, such as for debt reduction or capital donations• As part of a major-gift program, you will encounter several types o f gifts that may not involve someone's writing a check. Most of these are some form of"planned gift," or a donation that is triggered by a future event--frequently the donor's death• Planned giving. Planned giving is a specialized part of a major-gift program that is aimed at improving a program's long-term financial stability. Generally, planned gifts allow donors to give an asset such as cash, stock, or real estate via a bequest, charitable trust, deed, or contract that will provide benefits
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to both donors and the nonprofit organization or program. Planned giving can help donors increase the value of a gift by reducing their taxes, and can help them use cumbersome assets to make a gift. The large body of specialized knowledge regarding tax rules, asset management, and gift instruments for planned giving are not the province of the dean or most fundraisers. Rather than master the often-complicated rules regarding planned giving, rely on your development professional to define proper planned-giving instruments for donors w h o are so inclined. A planned gift is often written into the donor's will. Yet a vast majority of Americans do not have wills outlining where they wish their assets to go after their death. Consequently, your publications should mention the importance of bequests and estate planning. The hospitality industry has been a generous source of appreciated stock, and that appreciation has created wealth that can be of particular assistance to your program. You need to educate your prospects about the tax benefits that can accrue to their estate and beneficiaries as a result of a stock bequest• C a p i t a l c a m p a i g n s . If it has not already done so, your college or university will soon embark on a capital campaign• Capital campaigns are the single most popular act in m o d e r n fundraising, primarily because there is no better way for an institution to raise large amounts of money in a relatively limited amount of time. A capital campaign can reinvigorate an institution through a coordinated effort to improve the image of the institution, enlist advocates to promote the interests of the institution, and raise funds to meet the defined needs of the institution. If your program is going to embark on its own capital campaign,
EDUCATORS' you must have an easily understood mission, a strategic plan that outlines the direction of the program for the next five to ten years, and a compelling urgency for the campaign. A capital campaign, like any special fundraising effort, requires a wellthought-out plan that is separate from the program's overall development plan. This plan, which must be in writing, should be simple enough that it can be readily explained to and by the volunteers who will determine the campaign's success. Capital campaigns operate differently from most fundraising programs. They usually begin with a feasibility study conducted to assess whether an organization is ready to undertake such a massive effort. This feasibility study is usually conducted by a fundraising-counseling firm. The firm will examine how strong a case the institution can make for support from prospective donors and consider the prospects needed to successfully fund such a campaign. The chief technique for a capital campaign is sequential fundraising, in which the largest gifts are first secured before proceeding to the smaller gifts. If the feasibility study indicates a readiness to proceed, the campaign enters its quiet or "nuclear" phase, when the most-important major donors are solicited to make large commitments to the campaign, thereby setting the stage for other donors. The public phase of the campaign usually comes after 40 to 60 percent of the campaign goal is raised. Most campaigns begin with a celebration or campaign kickoff where the major gifts already received are publicly announced and acknowledged. If building construction is part of your capital campaign, we strongly advise that you not begin construction until all of the funds (or a substantial amount) are raised. Once construction has begun but suffi-
cient funds for construction have not been raised, the campaign then must focus on debt reduction instead of construction. Debt reduction is difficult to fund from donations because donors have trouble seeing the compelling need for debt reduction, as compared to construction (and other purposes). Moreover, be advised that a commitment is not necessarily a donation. While donors have every intention of honoring commitments, their circumstances can change rapidly in an economic recession, forcing them to delay payment or renege on a commitment. Such an eventuality can also turn a construction-focused capital campaign into a debt-reduction effort. As explained in the box on page 90, debt-reduction campaigns often do not attract strong support.
Fund-RaisingTrends Campaign goals are growing and, to a certain degree, the time lines to achieve grand goals are extending-often to five years or more. As a consequence of working with large goals and long deadlines, some organizations' development plans now comprise comprehensive campaigns that involve capital campaigns, annual funds, major gifts, and planned gifts. In addition, organizations are supporting the idea of shared leadership for the development program. During long campaigns, the volunteer serving as the campaign chair at the beginning of the campaign may not be the chair at the end of the campaign, or it may be necessary to find co-chairs. With more influential volunteers sharing in the responsibility of the plan, your program can develop a stronger, more diverse base of supporters. This could be particularly significant to a hospitalityeducation program due to the industry's transient nature. According to Bruce McClintock, chairman of Marts and Lundy, Inc., a Princeton, N e w Jersey-based con-
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suiting firm, the gift pyramids that make a campaign a success are steeper now than in past campaigns] By that he means that a small number of large gifts are responsible for the success of today's campaigns. The current thinking among fundraisers is that 90 percent of the campaign goal will come from 10 percent of the donors. 8 In many cases one gift accounts for 20 to 50 percent of the campaign goal, and no more than eight to ten gifts account for 90 percent of the goal.
Planning for Success We have emphasized in this article the importance of developing a solid development plan that reflects a hospitality-education program's strategic objectives, as well as those of your institution. A plan that is not developed with the participation of all levels of your staff and faculty will probably not achieve the level of success desired. All of your staff must buy into the program at least to a degree, and all of your program's constituents should share and embrace a vision for the program. Only then can you begin to involve alumni and friends. As a dean or director, you will have the opportunity in the near future to approach a new generation of philanthropists. These people will be even more particular about their gifts than donors in the past, for many of the new philanthropists are baby boomers, who have already demonstrated their propensity to have matters their own way. You will need to develop a detailed development plan, carefully define your case for support, and recruit the volunteer leaders who can identify and solicit the right people at the right time for the right amount. CQ 7 Bruce R. McClintock, International Conference on Fundraising, Dallas, March 22, 1997. ~Compare that notion to the long-established Pareto principle of 80 percent of volume coming from 20 percent of individuals.
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pp. 69-75
Selecting that First Job:
How Students Develop Perceptions about Potential
Employers by Michael P. Sciarini and Robert H. Woods pp. 76-81
IN
Brief
Teaching Hospitality Courses through Distance Education:
A Personal Account by Susan S. Hubbard
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executive
pp. 82-86
summaries of this issue's feature
Fundraising in Hospitality
articles
Education: The Role of Deans and Directors
by Philip A. Conroy,.Jr., and Michael M. Lefever pp. 87-95
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A nationwide survey of almost 1,400 B&B guests provided an overview of those travelers' characteristics. Among guests' top-ten desirable B&B features are (1) a private bath, (2) a sense of privacy, (3) a quiet atmosphere, and (4) an innkeeper who tells of local sights and restaurants. The majority of B&B and country-inn guests are baby boomers, with a median annual household income of $73,000. Almost all were college educated, and 36.4 percent of respondents listed their occupations as professional. Inn guests spend 2.35 nights on a B&B getaway, and respondents projected that they would take 2.62 trips involving a bed-and-breakfast stay in the coming year. A couple typically spends $225.72 per day during a B&B visit for food, lodging, and other purchases.
From a preselected list of 20 items that may influence students' impressions of potential employers, 550 U.S. hospitality students from 19 schools ranked those factors and assigned those involving personal interaction the highest ratings The most influential factors were (1) Experience with the company as a consumer; (2) Word of mouth from faculty members; (3) Word of mouth from alumni; (4) Oompany representative's personality; (5) Word of mouth from students; (6) Guest lecturers in class; (7) Company representative's appearance; (8) Company participation in job fair; (9) Three-month work experience, internships; and (10) Oompanysponsored tours. Least influential were company-sponsored scholarships, company videos, company-sponsored social events, and company information on the internet or worldwide web. The experience of a professor in the hospitality program at Auburn University (Alabama) in taping classroom lectures and discussion has mostly been favorable. Moreover, offering courses via videotape has enabled students in remote locations to work toward advanced degrees while they continue to work (undergraduate courses are not so offered). Setting up classroom sessions for the camera places some restrictions on the faculty member, requiring considerable advance planning, reducing flexibility in class, and possibly inhibiting discussion among students in the classroom. On the other hand, live classes are more interesting to tape than studioonly lectures. Moreover, the camera goes along on field trips. Videos go to the distant students with little or no post-production editing. The faculty member reported that any negative aspects are more than offset by positive factors, primarily the efficiency of teaching via videos. Fundraising campaigns are an essential aspect of hospitality-education programs. While the dean or director is a key member of a fundraising team, fundraising campaigns also require the assistance of development professionals and committed volunteers. The three steps for initiating a fundraising program are: create a written development plan, compose a case statement, and recruit volunteers. The annual fund is the beginning point for most fundraising campaigns and for most donors, as annual-fund gifts are relatively small and are made regularly. Despite the importance of operating an annual fund, the bulk of donated funds come from major gifts, which must be cultivated. Three solicitation methods are direct mail, telephone calls, and personal meetings.
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l:undralsingin HospitaliW" Education The R01e 0fDeans and Directors by Philip A. Conroy, Jr., and Michael M. Lefever
Fundraising is an essentiaJ aspect of a program bead's responsibility, but it is also a team effort,
E d r a i s i n g has become an essential function for nonprofit organizations generally and for college and university programs particularly. In the case of colleges, fundraising fills two essential functions: it provides annual revenue that helps stem the rise of tuition (already viewed by many as high), and it builds endowments that provide funds for the scholarship aid that helps offset high tuition costs. This is not to mennon increasing the number o f stakeholders in the program to enhance other facets, such as career days, visitinglecturer programs, and gifts-in-kind. At the same time that fundraising's importance has grown, the prospects for developing a successful fundraising campaign have expanded greatly. While money is certainly not dropping from trees. nonprofit and charitable organza-
tions have the potential for tapping a substantial reservoir of capital. In the next several years nonprofit organizations that develop appropriate fundraising structures may share in a substantial transfer of wealth now occurring between generations. In addition, new wealth is still being created by various entrepreneurial endeavors. Your hospitality program has an excellent opportunity to attract investment from both generations of philanthropists--those
Philip A. Conroy, Jr., M.Ed.. is director ~f development, College of Food and Natural Resources, at the University of Massachusetts-Amherst. Michael M. Lefever, Ph.D., is director of the Cecil B. Day School of Hospitality Administration at Georgia State University. © 1997 Cornell University
August 1997 , 87
who are about to transfer their wealth and those who are still building it. These funds will come to your program, however, only if you organize your fundraising efforts effectively, because the competition for those funds will be considerable. As the dean or director of a hospitality-education program, you are a key player in the development effort, but you are by no means the only player. We believe you should allot time for fundraising, but it should not overwhelm your schedule. We surveyed 39 program heads to find out how much time they assign to fundraising duties. 1 We did not control for length of workweek or other intervening variables, so our figures are indicative only. The mean amount of time reported was just under 14 percent, but the range was large--from no time at all to 75 percent in one case. We found that the directors of two-year programs spent, on average, far less time on fundraising responsibilities than d i d the heads of four-year programs (two-year mean, 7.3 percent; fouryear mean, 16.7 percent). The percentage of time spent on fundraising by 12 heads of two-year programs ranged from zero to 33 percent, while the 27 responding four-year directors reported spending from zero to 75 percent of their time on fundraising. To those who are spending little or no time at all, we suggest greater involvement. In this article we outline the essential steps of creating a successful fundraising program, based on our experience at Amherst and Georgia State.
Three Steps G. Douglas Alexander, president of the Atlanta consulting firm of Alexander, Haas, O'Neil and Martin, tWe sent surveys via facsimile to 100 deans and program directors in April 1997. We received 39 responses. The survey asked the percentage of each respondent's work week spent on fundraising.
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suggests three "absolute essentials" in preparing to raise funds for an organization. 2 Those three key steps are: (1) develop a detailed written development plan that reflects your program's strategic plan; (2) carefully define your program's case for support; and (3) recruit volunteer leaders to attract the resources you need to meet your program's goals. Most hospitality-education programs are part of a larger university organization (often a business school). Within the university structure are resources for assembling an effective development program. While you as dean or director are a key figure in the fundraising and development effort, you should not attempt to raise funds singlehandedly. Instead, your chief role is to identify and define the areas that need funds, work with the university's development staff members, and provide leadership to guide volunteers and staff members through the fundraising process.
Working with a Development Professional Because your fundraising efforts will be competing with those of other groups and institutions, you as dean or program director must develop a close working relationship with a development professional. Large programs will be able to employ a development specialist as part of the administrative team. Indeed, many of the largest hospitality programs have made an investment in hiring a full-time development director. The usual model, however, is to rely on a college development specialist who devotes a portion of her or his time to the hospitality department's campaign. This individual will assist you in identifying program priorities, assessing the potential for funding those priorities, creating the plan 2G.D. Alexander, International Conference on Fundraising, Dallas, March 22, 1997.
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that outlines the program's priorities, and developing strategies for a fruitful campaign. In addition, the development specialist should assist with the identifying, cultivating, and soliciting of major and planned gift prospects and donors, as well as stewardship of their gifts. The development specialist's primary responsibility is to make sure that someone asks for a gift. While the development specialist should always be part of the solicitation team, that person will not necessarily be the person to ask for the gift. The dean or director or a volunteer from the hospitality industry who serves on your advisory board might be a more appropriate person to ask for a gift, depending on the prospect and the size of the person's gift potential.
Step One:The DevelopmentPlan The most important step in fundraising is to create a written development plan. (It is essential that the plan be in writing.) A written plan keeps you on track and provides opportunities to measure the program's success. The plan should include: • an introduction describing past fundraising accomplishments, • a statement of the program's current state, • goals for the future of the program, • cost estimates of future projects, • steps that must be taken to achieve the necessary funding (e.g., identification of volunteers), • a fundraising schedule, and donor-recognition plans. The plan should include details on fundraising strategies to be employed, such as annual campaigns, major gifts, and planned giving. If your program plans a capital campaign, that should be mentioned in the overall development plan, but the capital campaign requires a plan of its own. •
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The fundraising plan should include sections on budget and staffing; gift-tracking procedures; and donor-recognition programs. The plan should also set forth a schedule of publications that will support the program, and the cost of those publications should be included in the program costs. Publications are excellent tools for informing constituents of your fundraising campaign, highlighting your needs, soliciting contributions, recognizing donors, and showcasing the success of past campaigns or projects.
Step Two: Develop a Case Statement Perhaps your most important publication is the case statement. The case statement, which you present to your prospects, should emphasize how their gifts to the hospitality program will benefit them. The best case statements emphasize a great past and an organized future, with an explanation of how the mission of the program can be achieved through donor support. (Building the case for support is particularly
important for a capital campaign.) The case statement establishes the vision for the organization's direction and also establishes the boundaries for the support needed to meet the campaign's objectives. As an example, the University of Massachusetts has a six-year campaign based on three goals: (1) raise $125 million to support changes initiated by strategic planning; (2) recruit 3,000 new volunteers; and (3) strengthen the university's image. Each of the university's schools has its own campaign design, as do the largest departments, including the department of hotel, restaurant, and travel administration (H1KTA). The campaign statement is generally presented in a well-designed publication that is easy to read. The key elements are a vision statement from the organization's leader, a historical narrative that sets the stage for the vision of the organization's future, vignettes describing the suc-
cessful people and programs that the campaign will support, and priorities for the program with specific dollar goals. The essential points of the University of Massachusetts campaign case statement are as follows: Campaign theme: To Dream, To Act, To Lead
Vision statement: From Chancellor David Scott
Historical narrative: Discusses the evolution of the university from a college of agriculture to a comprehensive land-grant university with an international reputation for research, teaching, and service.
Campaign priorities: • $40 million to endow 30 faculty positions; • $5 million for merit scholarships and financial aid; • $5 million for student services and programs; • $40 million for college-based initiatives; • $5 million for the library; and • $30 million for campus facilities.
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are monetary. Perhaps the most important supporters of your The following is an example of the pitfalls of debt-reduction program are the senior campaigns, which are difficult to conduct even for worthwhile purposes. Several years ago a foundation related to a decision makers at large state university entered into negotiations to purchase your university with a horse farm for the university's nationally noted equinew h o m you will work studies program. The farm's owner was bankrupt, and the as you position your purchase represented a tremendous opportunity for the university. The case for purchasing the farm was compelprogram and seek a ling: the farm's asking price represented an incredible prominent position in bargain; the farm was in excellent condition; it offered all of the institution's fundthe facilities needed to house the program; and it was close to the university's campus. In short, all of the elements for a raising program. The successful fundraising campaign were present, except one. process of identificaIn fact, the campaign was not successful, largely because tion, cultivation, sothe decision was made to borrow the money to purchase licitation, and stewardthe farm and then raise the funds to reduce the debt. The university learned a hard lesson--to wit, the more compelship is the same for ling case would have involved raising funds first (with a both internal and exworst-case plan of borrowing any funds that could not ternal donors. In many be raised) during the 12 months that the foundation was cases, you will be asknegotiating with the owner and dealing with the bankruptcy trustee.--P.A.C, and M.M.L. ing for an allocation of resources to support your program. You As a large part of the College of should, therefore, develop a strategy Food and Natural Resources, the to convince your institutional leaders to support your program's funddepartment of H1KTA has responsiraising agenda through their active bility for a substantial part of the college's campaign, which parallels participation and the allocation of resources to implement your fundthat of the university. The H R T A raising strategy. department's campaign priorities Hospitality programs and their are: $1.5 million for an endowed constituencies often have high prochair in hospitality leadership, files in a university because the $300,000 in annual support to hospitality program frequently arthe department, and $10 million ranges the institution's events. Wellfor a new H R T A building and arranged events demonstrate your equipment. program's strengths both to univerStep Three: RecruitVolunteers sity leaders and to outsiders. At the same time, however, your case stateThe campaign must have a strong ment can allude to weaknesses-group of volunteers. The person that is, what you could do with chairing your campaign will be a additional funding--so that univervolunteer, and this essential person sity decision makers will consider will then assist in selecting members positioning your program near the of the volunteer board. If you altop of the university's fundraising ready have an advisory board, the agenda. pool from which you may select the The president or chancellor is a campaign chair and chief volunteers volunteer and a donor in the sense already exists. Your advisory board of giving time and talent to advocan be the campaign's volunteer cate and eventually solicit gifts on organizing board. behalf of your program. This person Melding with the institution. is one of your most important volEveryone you come in contact with unteers, w h o m you should ask to is a potential donor to your prowork actively on behalf of your gram--although not all donations
The Problem with Debt Reduction
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fundraising agenda. The same is true of other key members of the university administrative team (e.g., provost, chief academic officer). Good volunteer leadership is essential for your fundraising success. G. Douglas Alexander noted: "Volunteer leadership will be the most important asset of a nonprofit organization. ''3 The members of your advisory board should be some of your best major-gift prospects. If they are not actual prospects, they should be individuals who can attract major gifts for your program through the people they know or the corporations for which they work. In addition to their advisory role regarding curriculum, members of the industry advisory board have three essential roles in the development program: to serve as an advocate for the program, to assist with the development of the program's public image, and to assist with the fundraising plan. 4 They are the volunteer leaders who will make your development program successful. As in other parts of the development program, expectations for board members must be defined in a plan. The operating plan for the board outlines the responsibilities of the members with the explicit expectation that they will be donors to and sohcitors for the program. Since your best solicitors will come from your advisory board, the following rules of organization apply: • The strongest solicitors should make the biggest calls; • N o volunteer is assigned more than five calls at one time; • Largest gifts are solicited first (sequential fundraising); and • Leadership and top prospects are solicited before one moves on to other prospects. 3Ibid. 4See: Philip A. Conroy and Michael M. Lefever, "The Value of College Advisory Boards," Cornell Hotel and Restaurant Administration Quarterly, Vol. 37, No. 4 (August 1996), pp. 85-89.
Identifying Prospects The first donors identified in many
fundraising campaigns are hospitality corporations, but corporations are no longer necessarily in a position to make large gifts. While corporate giving can be an important part of a campaign, it should not be the centerpiece of your development program--if only because corporations face so many requests for support. The source of more than 80 percent of all philanthropic dollars in the United States today is individuals, not corporations or foundations. 5 In seeking the best individual donors, the best approach is to look at your natural constituencies first. For an educational institution the constituency usually means graduates-particularly graduates who have benefited professionally and personally from the education they received in your hospitality program. Even when you are cultivating a corporate gift you are really working to establish a relationship with a single person or a small group. Usually you are meeting with the C E O or a group of influential managers who can make a decision about a gift to your program. In both corporate and individual giving, the essential concept is that people give to people. Donors give because they are asked by the right person at the right time for the right amount.
Your Personal Gift Whether they are paid professionals or volunteers, the best fund raisers are people who have already made a personal gift to the program. As the program's dean or director, it is essential that you show your loyalty and commitment to your own hospitality education program by being 5See, for example: Beth J. Harpaz, "Economy Boom Pays OFFfor Charities" (Associated Press item), BhacaJournal, May 29, 1997, p. 8A.
a substantial donor to the program. You should make a gift that indicates a personal sacrifice. If you have donor-recognition clubs or societies, you should strive to be a member of the top giving club.
The Annual Fund The annual fund serves as the foundation for the remainder of the fundraising program. This part of your development program provides unrestricted funds for many purposes. One excellent approach is to apply annual-fund gifts to scholarships so that other revenues can be used to meet the program's operating needs. Because they have already made a commitment to the mission of your program, the donors to the annual fund are your best prospects for other types of gifts, as well, such as major and planned gifts. Your development plan should have a detailed section dealing with implementing the annual fund. This appeal should be designed to solicit support from all of your natural constituencies--graduates, students' parents, and friends of the program--plus a corporate solicitation that appeals to the organizations that have a relationship with your hospitality program. If you cannot establish a relationship between your hospitality-education program and the person or organization from which you plan to ask for an annual gift, you probably should not ask. Once again, your program's fundraising must be coordinated with the university's fundraising program. Universities commonly appeal for general unrestricted support in the annual fund. Since your goal is to ensure that your constituents' gifts are designated to the hospitality program, solicitation of your top annual-fund prospects is best handled with a separate mailing, a separate telephone-solicitation campaign, and assistance from your development professional.
The annual-fund plan should include a set goal for the amount to be raised; the overall objectives of the annual-fund program; the reason you are raising the money; the strategies for solicitation, such as direct mail, volunteer solicitation, or telephone solicitation; and the fundraising timetable. As mentioned above, the case statement that you present to your prospects should emphasize how their gift to the hospitality program will benefit them. Your solicitation material--whether it be, a fundraising letter, a script for a telephone solicitation, or talking points for a personal solicitation visit-must ask each prospect for a gift of a specific amount that's appropriate for that donor. R e c o g n i t i o n . Deciding how donors should be recognized is an essential part of your development plan. The plan should outline the appropriate recognition for different fundraising projects (e.g., various levels of giving). The nature of the gift for a particular type of recognition should be "market driven." For example, if you are constructing or renovating a building, the gift that puts a donor's name on the lobby should probably be set at an amount that is higher than gifts to name some of the other rooms, even if the other rooms actually cost more to build. The point of name recognition is that larger gifts should garner greater exposure. Your policies on naming buildings and rooms should be carefully established. We have observed some awkward moments in some programs' campaigns when a space has been formally named as the result of a pledge but for some reason the pledge was not honored. You should consider a membership organization for your best donors, especially for corporate prospects. Several hospitality-education programs have implemented orga-
August1997 , 91
nizations such as a "hospitality leaders council" that confers certain benefits for donor-members. M e m .~s must be ;t be able omise and, ~s, you will ~et value provided ar's tax ssary or ns (e.g.,
3rk). emiums is pport to ns and e same :ional orge that the l, coupled :s' names ocument, recognia permamajor gifts }me donors may appreciate dinners or personal access to the dean or president, but premiums are an expense that can detract from needed support to other parts of your hospitalityeducation program.
Approaches The goal of any fundraising program is to raise the greatest possible amount of money at the least cost. The more personalized the solicitation, the greater the yield in dollars but also the greater the cost of running the campaign. Every fundraising campaign uses one or more of the following means of asking for money: direct mail, telephone solicitation, and personal solicitation. D i r e c t mail. Direct mail can be the least expensive way to raise funds, but it also has the lowest yield of all approaches. Response rates for a direct-mail solicitation for small gifts range from 2 to 10 percent, and its use is inadvisable for potential
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donors of large gifts. Your directmail materials should be as personalized and professionally prepared as possible. Because your request for funds will have a great deal of competition in recipients' mailboxes, your goal is to have the envelope capture the prospect's attention and encourage the recipient to open the envelope and read the material. Once the person opens the envelope, the package must convince your prospect to sit down and write a check for at least the amount you requested in the letter. A tall order, indeed! T e l e p h o n e solicitation. Telephone solicitation has the potential to reach the most people directly, and it can therefore generate a strong flow of donations. The downside of telephone solicitation is that it is intrusive and can offend your potential donors if handled badly. Moreover, your telephone campaign faces competition not only from other nonprofit organizations but also from commercial enterprises selling any number of goods and services via the telephone. Many colleges and universities have well-organized telephonesolicitation programs in which students request funds over the telephone. Whether you have students or graduates call (or other volunteers), callers must be well-prepared and have solid information about your program. The generally accepted rule among fundraising professionals is that a person w h o m you telephone will give 25 percent of the requested amount about half the time. You might be tempted to retain a firm that specializes in fundraising by telephone. However, you should use caution when considering the use of an outside consulting firm. Check references to see that the firm you are considering is not guilty of using high-pressure tactics on potential donors. Should you
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retain a fundraising company, choose only a firm that charges a flat fee for its services, rather than one that charges a percentage of funds raised to remove the solicitors' "boilerroom" temptation to pressure donors for higher-than-appropriate gifts. Personal solicitation. The method that yields the greatest return but is the most expensive to implement is personal solicitation, usually by volunteers. There's a direct correlation between the time and money invested in preparing and managing volunteers and the amount of money raised. The most effective form of personal solicitation involves a volunteer asking for a gift from a peer--and it is even better when that volunteer can give personal testimony as to the importance of supporting the program based on his or her own gift or experience, in the case of cash-poor recent graduates. Loyal annual-fund donors make the best volunteers for seeking funds from their peers. In our experience, the prospect in a properly handled personal call is likely to give at least half of what is asked about 75 percent of the time.
Annual-Fund Details The best time to conduct an annual-fund campaign is in the final third of the calendar year (September through December) to take advantage of end-of-year tax decisions. While there is no bad time of the year for a fund drive, the leastdesirable time to conduct a campaign is during the summer months. Each technique used to solicit funds should be evaluated separately. The returns on the investment in a new annual-fund program, which usually depends heavily on direct mail and telephone solicitation, are generally a number of years in corning. As your fund program matures, personal solicitations will become more important. You will also be
asking your best donors to increase their commitment to your organization by increasing the size of their gifts and probably to serve as volunteer fundraisers. The selection of the best approach depends on your knowledge of your donors. If a donor responds best from a telephone call, then make the call. If the donor hates phone calls but responds well to a letter, then by all means send a personal letter and save the phone call to say thank you. 6
Major Gifts Major gifts are the sign of a mature and well-planned development program. Such gifts provide the endowment, capital investment, and operating funds that will make the greatest difference in your program. The receipt of major gifts provides an infusion of funds that permits the program to meet both capital and program needs. The key to a successful major-gift program is to establish strong relationships with prospects and donors. Most people give just one major gift to a particular institution (and possibly just one in a lifetime). The donor tends to make the gift from principal assets rather than from income. Major gifts are the most important part of an organization's private support program. It is commonly accepted among fundraisers that 80 to 90 percent of money raised by nonprofit institutions are in the form of major gifts. The best major-gift prospects are those who have indicated an affinity for your program through annual gift support. There are exceptions, of course, and a well-developed prospect-management program must include research into each prospect's ability and propensity to give. Most 6Admittedly, such knowledge requires extensive record-keeping, a topic beyond the scope of this article.
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hospitality programs should look to their host institution's development office for prospect research and for the necessary computer support that makes such research possible. The purpose of managing majorgift prospects is to advance from identifying a prospect to receiving a donation. The steps in the classic pattern are early cultivation, cultivation, solicitation, and stewardship. During early cultivation, the development-staff members identify the prospect and assess the level of the person's interest and involvement. If the person seems amenable to supporting the program, the development officers or volunteers involve the person with the institution during a series of events and activities. Eventually, the prospect begins to feel ownership in the program. Indeed, most major-gift prospects will not make a donation until they feel some personal involvement with a program. When campaign officials believe the time is appropriate, they will make a solicitation, actually asking for a specific sumiofmoney. During the ensuing conversation the prospect (soon to be donor) and the development professional negotiate the specifics of any gift and the donation is offered and accepted. The most important phase of the process is stewardship, in which groundwork is laid for future gifts. The dean (and president, if appropriate) thanks the donor and then demonstrates to that person how the program is using her or his gift. It may even be appropriate for the donor to take part in the program that is funded by their gift. The best major-gift solicitors are always well-informed about the program, the institution, and the prospect's relationship to the program. Programs should avoid "we need tile money now" strategies. Most major gift donors are motivated by a desire to have a profound, positive effect on other people.
August 1997 ° !~3
As in the annual-fund program, the major-gift program should be written into the overall develophe major-gift : the needs of which projrogram need e dollar cost ', is critical to Ljor-gift promembers, tculty can lead est maj or-gift Ffund program takes • The cuhivaprospect can lg several be part of the veloped for a carefully to ch your ', prospect's ask for a gift lething as simple as the prospect's change in the use of pronouns from " y o u " to "we." This shift indicates a critical degree of ownership•
Other Giving Programs You may also conduct specialpurpose fund drives, such as for debt reduction or capital donations• As part of a major-gift program, you will encounter several types o f gifts that may not involve someone's writing a check. Most of these are some form of"planned gift," or a donation that is triggered by a future event--frequently the donor's death• Planned giving. Planned giving is a specialized part of a major-gift program that is aimed at improving a program's long-term financial stability. Generally, planned gifts allow donors to give an asset such as cash, stock, or real estate via a bequest, charitable trust, deed, or contract that will provide benefits
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to both donors and the nonprofit organization or program. Planned giving can help donors increase the value of a gift by reducing their taxes, and can help them use cumbersome assets to make a gift. The large body of specialized knowledge regarding tax rules, asset management, and gift instruments for planned giving are not the province of the dean or most fundraisers. Rather than master the often-complicated rules regarding planned giving, rely on your development professional to define proper planned-giving instruments for donors w h o are so inclined. A planned gift is often written into the donor's will. Yet a vast majority of Americans do not have wills outlining where they wish their assets to go after their death. Consequently, your publications should mention the importance of bequests and estate planning. The hospitality industry has been a generous source of appreciated stock, and that appreciation has created wealth that can be of particular assistance to your program. You need to educate your prospects about the tax benefits that can accrue to their estate and beneficiaries as a result of a stock bequest• C a p i t a l c a m p a i g n s . If it has not already done so, your college or university will soon embark on a capital campaign• Capital campaigns are the single most popular act in m o d e r n fundraising, primarily because there is no better way for an institution to raise large amounts of money in a relatively limited amount of time. A capital campaign can reinvigorate an institution through a coordinated effort to improve the image of the institution, enlist advocates to promote the interests of the institution, and raise funds to meet the defined needs of the institution. If your program is going to embark on its own capital campaign,
EDUCATORS' you must have an easily understood mission, a strategic plan that outlines the direction of the program for the next five to ten years, and a compelling urgency for the campaign. A capital campaign, like any special fundraising effort, requires a wellthought-out plan that is separate from the program's overall development plan. This plan, which must be in writing, should be simple enough that it can be readily explained to and by the volunteers who will determine the campaign's success. Capital campaigns operate differently from most fundraising programs. They usually begin with a feasibility study conducted to assess whether an organization is ready to undertake such a massive effort. This feasibility study is usually conducted by a fundraising-counseling firm. The firm will examine how strong a case the institution can make for support from prospective donors and consider the prospects needed to successfully fund such a campaign. The chief technique for a capital campaign is sequential fundraising, in which the largest gifts are first secured before proceeding to the smaller gifts. If the feasibility study indicates a readiness to proceed, the campaign enters its quiet or "nuclear" phase, when the most-important major donors are solicited to make large commitments to the campaign, thereby setting the stage for other donors. The public phase of the campaign usually comes after 40 to 60 percent of the campaign goal is raised. Most campaigns begin with a celebration or campaign kickoff where the major gifts already received are publicly announced and acknowledged. If building construction is part of your capital campaign, we strongly advise that you not begin construction until all of the funds (or a substantial amount) are raised. Once construction has begun but suffi-
cient funds for construction have not been raised, the campaign then must focus on debt reduction instead of construction. Debt reduction is difficult to fund from donations because donors have trouble seeing the compelling need for debt reduction, as compared to construction (and other purposes). Moreover, be advised that a commitment is not necessarily a donation. While donors have every intention of honoring commitments, their circumstances can change rapidly in an economic recession, forcing them to delay payment or renege on a commitment. Such an eventuality can also turn a construction-focused capital campaign into a debt-reduction effort. As explained in the box on page 90, debt-reduction campaigns often do not attract strong support.
Fund-RaisingTrends Campaign goals are growing and, to a certain degree, the time lines to achieve grand goals are extending-often to five years or more. As a consequence of working with large goals and long deadlines, some organizations' development plans now comprise comprehensive campaigns that involve capital campaigns, annual funds, major gifts, and planned gifts. In addition, organizations are supporting the idea of shared leadership for the development program. During long campaigns, the volunteer serving as the campaign chair at the beginning of the campaign may not be the chair at the end of the campaign, or it may be necessary to find co-chairs. With more influential volunteers sharing in the responsibility of the plan, your program can develop a stronger, more diverse base of supporters. This could be particularly significant to a hospitalityeducation program due to the industry's transient nature. According to Bruce McClintock, chairman of Marts and Lundy, Inc., a Princeton, N e w Jersey-based con-
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suiting firm, the gift pyramids that make a campaign a success are steeper now than in past campaigns] By that he means that a small number of large gifts are responsible for the success of today's campaigns. The current thinking among fundraisers is that 90 percent of the campaign goal will come from 10 percent of the donors. 8 In many cases one gift accounts for 20 to 50 percent of the campaign goal, and no more than eight to ten gifts account for 90 percent of the goal.
Planning for Success We have emphasized in this article the importance of developing a solid development plan that reflects a hospitality-education program's strategic objectives, as well as those of your institution. A plan that is not developed with the participation of all levels of your staff and faculty will probably not achieve the level of success desired. All of your staff must buy into the program at least to a degree, and all of your program's constituents should share and embrace a vision for the program. Only then can you begin to involve alumni and friends. As a dean or director, you will have the opportunity in the near future to approach a new generation of philanthropists. These people will be even more particular about their gifts than donors in the past, for many of the new philanthropists are baby boomers, who have already demonstrated their propensity to have matters their own way. You will need to develop a detailed development plan, carefully define your case for support, and recruit the volunteer leaders who can identify and solicit the right people at the right time for the right amount. CQ 7 Bruce R. McClintock, International Conference on Fundraising, Dallas, March 22, 1997. ~Compare that notion to the long-established Pareto principle of 80 percent of volume coming from 20 percent of individuals.
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