|
UR
Finances 101: Frequently asked questions |
|||||||
|
What is
advancement?
“Operation Advance is the name of our multiple-year
effort to re-organize and build our Advancement program at the University of Rochester.
Our goal is a sophisticated, best-practices organization with the capability
of executing comprehensive campaigns, in close and productive collaboration
with our academic partners.” The University’s
advancement efforts have improved considerably in recent years. Annual giving exceeded $100 million for the
first time in FY2008. Plans are
underway for a major capital campaign, which will be announced publicly in
October, 2011.
Why is a capital campaign necessary? During
the past several decades, world-class research universities have built modern sophisticated
advancement operations and conducted progressively larger comprehensive
campaigns, raising billions of dollars. This trend is accelerating as we
approach the greatest intergenerational transfer
of wealth in history, amounting to trillions of dollars. The
This
slide is from Joel Seligman’s January
2008 report to the Faculty Senate. In those years, the
University of Rochester did not launch disciplined, modern, comprehensive University-wide
campaigns (a key to driving growth in philanthropic gifts) because the
University lacked the required structure, expertise, and resources. [However,
there were some campaigns run by individual schools within UR.] We are now in
a new era, marked by the start of Joel Seligman’s presidency. Advancement has
been rapidly condensing decades of organizational development into a few
years. These efforts will enable the successful execution of the University’s
first-ever national caliber campaign and achieve readiness for a subsequent
transformational comprehensive campaign.
Why is it
taking so long to get it started? It is important to re-emphasize
that advancement is a long-term strategy that engages our constituencies in
process of institution building. The Business Plan known as “Operation
Advance” was unanimously endorsed by the Board
of Trustees in March 2007. The
vision of a comprehensive campaign for the All successful campaigns
have four phases: ·
Strategic planning and buildup, ·
Nucleus phase in which majors gift commitments
are obtained, ·
Public campaign and ·
Stewardship.
·
Engage highly trained and specialized advancement professionals to
conduct comprehensive market research and cultivate donor relationships on a
national level ·
Develop a modern information system and centralized business
processes ·
Articulate ennobling purposes to inspire giving ·
Align institutional goals with donors’ interests and integrate them
as key partners in strategic planning ·
Achieve the highest quality of donor services and stewardship. To
put it another way, alumni relations and fundraising have not been given the
care they deserve until relatively recently.
Events such as Meliora Weekend were not held prior to the
Sesquicentennial of 2000. There was a
time in not so distant past, when our endowment was among the top 5 in the
country, when the then administration appeared to think that it did not need
to pay attention to such matters. . While other universities were building modern
advancement programs, the A
campaign on the scale we are contemplating cannot succeed until the
appropriate advancement infrastructure has been created. In particular we need
to identify and cultivate relationships with large numbers of potential
donors at various financial levels.
This process is underway but is far from complete. What kind of
return can we expect from the capital campaign? The
Operation Advance Business Plan estimated total cash receipts exceeding $1
billion through the final year of our campaign. It is important to note that determination
of the official campaign goal is dependent upon promises of major gifts during
the Nucleus Phase and the appeal of the university’s long term goals to our
potential donors. Typically, a public campaign is launched when 40-50 percent
of the eventual campaign goal has been received in cash and pledges. The
Operation Advance Business Plan estimated a 67% average net cash return over
the life of the campaign, a rate that is comparable to that of our peers.
This means that we expected to spend 33 cents for each dollar raised. To date through Fiscal Year 2008,
Advancement has generated a University-wide 77% net cash return (meaning each
dollar raised has cost only 23 cents), 10% better than planned. We must underscore that fundraising results
are spiky (variable on a year-to-year basis) and highly sensitive to the
economic environment. Because one-time transformational gifts or bequests can
also create large spikes, the long-term trend line is a much better metric
for performance. Although
the primary focus of Operation Advance is on actual cash gifts rather than
promises of future gifts, building our pledges and gift expectancies is
critical to the long-term success of our Advancement program. Over time,
approximately 1/3 of each year’s cash goal should come from pledges made in
earlier years. A consistent, predictable revenue stream of pledge payments
can help even out the spikes and provide a base of support that we can build
upon in future years. In Fiscal Year 2008, we booked total commitments of
$140.3M, representing a 52.7% increase over the prior fiscal year’s total
commitments of $91.9M. In FY08, new pledges totaled approximately $64M,
adding approximately $43M to our net pledge balance, representing future cash
flows. What do all
of the advancement people do, and why do we need so many of them? The work of Advancement is, at its core, to build
long-term, mutually beneficial relationships between the University and our
alumni, parents, and friends. Deeply
committed and engaged donors will provide the philanthropic support to fuel
our ambitious plans for the University’s future. Most of our prospects will travel to Rochester
only once or twice per year, if at all. So we must create meaningful
activities across the nation in order to engage them in the life of the
University. This requires substantial programs, interactions, and
investment. There is incredible
competition for philanthropic dollars, and we must constantly make the case
for the Historically at
|
|||||||
