Philanthropy 101

In an average year, about $100 million is donated to colleges and universities in the Inland Northwest.

If the schools have anything to say about it, that figure’s about to get a lot bigger.

Washington State University, by far the biggest fundraiser among regional universities, is preparing for a campaign in the next few years whose eventual goal may be as much as $1 billion. It’s an effort that would require the school to roughly “double the flow” of annual donations, President V. Lane Rawlins says.

Meanwhile, administrators overseeing fundraising at the University of Idaho and at Eastern Washington University are hoping to drive up donations and lay the foundation for their own fundraising campaigns. As public universities delve deeper into fundraising, driven by stagnant state funding and ambitious goals, private schools see more competition in a philanthropic arena they dominated only a few generations ago.

“There is more competition for the dollar,” said Whitworth College President Bill Robinson. “There are more dollars, but there is more competition for the dollar.”

American colleges raised more than $25 billion in private donations in the 2005 fiscal year, according to The Chronicle of Higher Education. The top 10 fundraising schools accounted for half of that figure, with top fundraiser Stanford checking in at more than $600 million.

The dollar figures are more modest at schools in the Inland Northwest. WSU raised more than $54 million in 2006, and the University of Idaho raised more than $28 million. They’re both well ahead of Eastern Washington University and private colleges Whitworth and Gonzaga University.

Schools are always raising money, but a capital campaign typically sets an ambitious goal and pursues donations more aggressively over several years. Such a campaign focuses and centralizes fundraising efforts, as well as promotes a vision for the school’s future, officials say.

The billion-dollar goal is becoming more common at public universities. In September, The Chronicle of Higher Education listed nine schools that have concluded $1 billion campaigns, including the University of Washington – which is now considering setting a goal beyond $2 billion. WSU’s incoming president, Elson Floyd, oversaw a billion-dollar effort in the University of Missouri system.

Rawlins says WSU’s campaign is likely to set a goal of between $600 million and $1 billion over seven years, though WSU Foundation officials said the campaign may not enter its “public phase” for several years.

“We haven’t set an exact amount, but we know those are the orders of magnitude we have to go after to be competitive,” Rawlins said.

WSU is now in the “preparation phase” and will enter the “silent phase” in the next few years. Universities typically run seven-year campaigns, and they try to raise about half their goal during the silent phase, before making a big public splash and marketing push.

“We’re definitely ramping up,” said Len Jessup, head of the WSU Foundation and the university’s vice president for advancement.

Fundraising is growing even faster at schools like EWU, which have been later in coming to the pursuit of gifts than research institutions like WSU and UI.

While EWU raises a lot less money than those schools, its rate of increase in recent years has been greater. Total donations rose 26 percent between 2000 and 2005, and the overall size of its endowment grew by more than 50 percent.

The school’s new vice president for advancement, Michael Westfall, says he wants to see the school show “dramatic increases” in fundraising in the first couple of years of his tenure. Eventually, EWU will launch its own fundraising campaign.

“Most universities are either planning for a campaign,” he said, “or they’re in a campaign.”

Increased pressure

One reason there’s increased pressure to raise money has been the decline in public funding provided by states.

According to the Washington Higher Education Coordinating Board, state appropriations per student at Washington’s four-year schools have gone down over the past 15 years. Adjusted for inflation, the total appropriations per full-time student dropped from $9,501 in the 1991-93 biennium to $8,250 in 2005-07.

Meanwhile, tuition has risen and the desire for private donations has grown. Westfall said regional universities, such as Eastern, and land grant schools, such as UI or WSU, used to be called “state-funded” schools. Now, he said, it’s more like “state-assisted.”

“The privates, the Harvards, the Yales, they were way ahead of public institutions in understanding the importance of philanthropy,” he said.

Private donations show up all over campuses, going toward scholarships, endowed positions for professors, construction campaigns and research support. Most money that goes into the nonprofit fundraising foundations established by public schools is targeted for specific uses; it doesn’t just go into the school’s overall budget but is tethered to a particular program or position.

That’s where “the art of fundraising” comes in, said Chris Murray, the UI’s vice president for advancement – “finding that mix between what the university needs and what the donor is interested in.”

Like Westfall at EWU, Murray is relatively new to the job, coming from the University of Oregon six months ago.

He said the need for private giving at universities is more pressing at all levels in higher education. “There has been an increased pressure over the last five years, last seven years, to be competitive with the other institutions in your peer group.”

The fundraising push has even made its way into the community college system. Gary Livingston, chancellor of the Community Colleges of Spokane, said the CCS system often turns to private donors to help cover basic classroom costs.

Its foundation is trying to raise $800,000 over four years to buy equipment for Spokane Community College’s radiology and sonography program. The state provides per-student funding that doesn’t cover expensive equipment needed for some programs, Livingston said.

But for a growing number of public four-year schools, declines in state funding is only one factor. Rawlins said public universities want to be more competitive, to offer more opportunities and facilities to students, faculty and researchers.

To do that, schools want to support high-end research programs and build the best new facilities. When it comes to the “meat-and-potatoes” priorities of taxpayer funding, “it’s probably unrealistic to expect states to do that,” Rawlins said.

‘Fuel for programs’

Private donations go toward every corner of a college’s operations: from remodeling the football stadium to hiring a professor in a specialized subject to providing scholarships.

At WSU, a recent $3 million gift from Jack and Janet Creighton established the Corps of Discovery chair in Lewis and Clark studies, the largest endowed chair in school history. The school will hire a top expert in Western history – and the boundaries of the position were determined by the Creightons and a panel of scholars.

“It’s just phenomenal what that will do for the program and students,” said Jessup.

Another recent donation of $1 million, from Mikal and Lynn Thomsen, will go into a scholarship fund targeted toward students from small towns in Washington who have good grades but little money.

“We supply fuel for programs around campus on a daily basis,” Jessup said.

Private colleges have had a longer-term commitment to fundraising, and many of the biggest have enormous endowments. Harvard’s is about $26 billion.

At schools like Whitworth and Gonzaga, fundraising is one of a few ways college officials find new sources of money.

“You only get more money in three ways – charge more, more students or more gifts. That’s about it,” Robinson said.

Gonzaga concluded a $150 million campaign last year, an effort that exceeded the school’s goal by more than $30 million. Pat Reese, associate director of development, said that as Gonzaga has grown, it has been important to raise private funds to keep up with the costs.

As that has happened, she said, potential donors are becoming more involved in wanting to direct and measure how their money is used.

“Donors and prospective donors are far more informed about philanthropy,” she said.

That often means that donors need to be attracted by a school’s goals or priorities, and not just its ever-rising costs.

“They do not invest in need,” said Westfall. “They invest in vision.”