survey of fundraising and alumni relations 2007 (sofar 2007) · survey of fundraising and alumni...

Survey of Fundraising and Alumni Relations 2007 (SOFAR 2007)

Working Paper No. CPNS 38

Dr Cameron Newton, Dr Daniel McDiarmid, Dr Wendy Scaife, Prof Myles McGregor-Lowndes

The Australian Centre for Philanthropy and Nonprofit Studies Queensland University of Technology

Brisbane, Australia

February 2008

GPO Box 2434 BRISBANE QLD 4001 Phone: 07 3138 1020

Fax: 07 3138 9131 Email: [email protected]

http://cpns.bus.qut.edu.au CRICOS code: 00213J

ACKNOWLEDGEMENT

The research team wishes to acknowledge the invaluable comments and assistance of those who completed the survey and those who for various reasons could not take part, but still assisted in the research. Annual surveys conducted in future years will be all the more useful and user friendly because of such efforts. The team also acknowledges the support and assistance of the Fundraising Institute Australia and ADAPE: the Association of Development and Alumni Professionals in Education (Australasia Inc).

The Australian Centre for Philanthropy and Nonprofit Studies (CPNS)

is a specialist research and teaching unit at the

Queensland University of Technology in Brisbane, Australia

It seeks to promote the understanding of philanthropy and nonprofit issues by drawing upon academics from many disciplines and working closely with nonprofit, practitioners, intermediaries and government

departments. CPNS’s mission is “to bring to the community the benefits of teaching, research, technology and service relevant to philanthropic and nonprofit communities”. It’s theme is ‘For the Common Good’.

The Australian Centre for Philanthropy and Nonprofit Studies reproduces and distributes these working papers from authors who are affiliated with the Centre or who present papers at Centre seminars. They

are not edited or reviewed, and the views in them are those of their authors.

A list of all the Centre’s publications and working papers is available from http://cpns.bus.qut.edu.au and digital downloads are available through QUT ePrints at http://eprints.qut.edu.au/

CRICOS code: 00213J

ISBN 1-74107-162-7

© Queensland University of Technology February 2008

http://cpns.bus.qut.edu.au/

TABLE OF CONTENTS

1.0 EXECUTIVE SUMMARY............................................................................................1 1.1 SOFAR BACKGROUND ..............................................................................................3 1.2 DEST ANNUAL FINANCIAL REPORTS ..................................................................4 1.3 SOFAR DEVELOPMENT ............................................................................................4 1.4 THE 2007 SOFAR SURVEY.........................................................................................6 1.5 FUNDRAISING INCOME............................................................................................7

INDIVIDUAL CONTRIBUTIONS......................................................................................................... 7 CORPORATE. FOUNDATION AND INTERNATIONAL CONTRIBUTIONS............................................... 8 BEQUESTS ...................................................................................................................................... 9 GIFTS IN KIND.............................................................................................................................. 10

1.6 FUNDRAISING AND ALUMNI RESOURCING.....................................................10 FUNDRAISING AND ALUMNI STAFF .............................................................................................. 11 EXPENDITURE .............................................................................................................................. 12 CAMPAIGN PHASE........................................................................................................................ 13 ALUMNI DATA ............................................................................................................................. 14 PROSPECT MANAGEMENT ............................................................................................................ 14

1.7 ISSUES FOR 2008 SOFAR SURVEY........................................................................15 APPENDIX ...................................................................................................................16

1 Working Paper CPNS 38

1.0 EXECUTIVE SUMMARY Against a backdrop of increasing interest in higher education philanthropy, the Australian Centre for Philanthropy and Nonprofit Studies (CPNS) surveyed Australian Universities to begin benchmarking their fundraising and alumni relations.1 This data relates to the calendar year 2006, being the first full annual survey. Who Participated? Eighteen of the 39 universities completed the survey, being 46% of all Australian institutions. All of the various types of institutions were represented such as Group of Eight (Go8), Australian Technology Network (ATN), Innovative Research Universities Australia (IRU) and New Generation Universities (NGU). Does the SOFAR 2007 Survey represent a national snapshot of Higher Education fundraising? No. Although all categories of universities participated, the total population characteristics are sufficiently unclear or unknown to prevent generalisation of the SOFAR sample results to the total university sector. SOFAR 2007 will be of use to participating universities to measure and improve their own endeavours and to the whole sector by identifying broad trends. In future years, with greater participation, refining of the survey and universities’ data collection procedures a national snapshot will be possible. This survey kickstarts the process. What contributions did individuals make? Universities received 5,905 (median 201) contributions from individuals amounting to $8,594,147 (median $348,970) with a further $1,558,240 pledged. More than half the universities (56%) received contributions from their council or senate members. However, over three quarters (77%) did not have or receive a contribution from those responsible for overseeing the universities’ foundation. What contributions did Australian corporations and foundations make? Australian companies are significant contributors to universities with 90% of universities receiving contributions worth in total $7,343,521 with a further $8,789,119 pledged. Only a relatively small amount is sourced from corporate foundations ($115,000). What contributions did Australian statutory corporations make? Government’s statutory corporations (e.g., corporatised agencies such as power utilities) appear to be significant contributors to universities with 90% of universities receiving contributions worth in total $183,235,320 (median $274,500) with a further $10,113,855 pledged. What contributions did international sources make? Contributions from international sources are of high value ($29,620,890), but scarce (26) and less than half the universities (44%) received them. A further $9,269,196 is pledged from international sources. What is the role of bequests? Only eight bequests were realised in 2006 being $4,127,842 in value. It is estimated that known bequests total $52,347,808 with a median of $1,485,000.

1 The survey also included New Zealand universities, university colleges and schools, but only Australian universities are reported here.

What is the role of the University’s Annual fund? Alumni accounted for more than 90% of gifts (median 93.83%) to the Annual fund, with a value of nearly 90% (median 88.8%) of the total given. This was followed by staff (median 3.1%) with a percentage of total median value of 3.5%. What is the total of contributions for 2006? The 18 universities that participated in SOFAR had a total of $246,469,143 in contributions (including gifts in kind) with a median of $1,611,651. We caution against simply grossing up the amount to gain an estimate of total contributions of all Australian Universities because of the unknown representativeness of our sample and the inherent limitations of an initial survey as explained below. At what level is the engagement with alumni? Universities are aware of some 1,204,782 living alumni and have an address for about 60%. The median of alumni with known addresses is 44,040 with a median of 6 domestic alumni chapters and 5 active international chapters. The median of alumni attending a function during the year was less than 3%. What is the level of intentional management of future donor prospects? Ten universities reported managing (i.e. in the process of building a stronger relationship with) a total of 694 prospects or donors with a total gift potential of an estimated $176.5 million. A further 3,072 prospects and donors with unrated donation potential are being managed by these universities. How are Development Offices staffed? There were a total of 140.8 equivalent full time staff in development offices in the sample with a median of 6.30 full time staff. The range of staffing levels is significant with a span from 0 to over 20. In 2007, it was anticipated that more than 30 positions would be created with most attention on general fundraising (15) and database staff (9). In what phase of fundraising campaigns are universities? Fifty percent of institutions have units involved in a major campaign at present, but only two were in the active publicised phase. Those in active campaign mode had reached more than 65% of their campaign goal. The total of campaign goals is $37,600,000 with a median of $3,250,000. What are the expenditures of Development Offices? Nearly half the expenditure is devoted to staffing costs (46%) and with consultants (12%) accounts for nearly 60% of expenditures. After salaries and consultants, the next highest median expenditure was media (9%). The median total expenditure was $310,133. How confident are the researchers with the data? As with the initial stages of any financial benchmarking project, the results are dependent on institutions being able to collect and report information on a standard comparative basis. Until reporting systems are standardised and their integrity proved, the data will need to be interpreted with caution. We have used the median to mitigate the large range in the data. The median is the middle of a distribution: half the scores are above the median and half are below the median. The median is less sensitive to extreme scores than the mean and this makes it a better measure than the mean for highly skewed distributions which were evident in some results.



Will there be a SOFAR survey in 2008? CPNS intends to replicate the SOFAR survey in 2008 and all Higher Educational institutions, residential colleges and schools will be invited to participate in an online survey in March 2008. Again, only those institutions that participate in the survey will receive the full survey results. 1.1 SOFAR BACKGROUND Many Australian universities are showing increasing interest in the development of their fundraising and alumni relations. This is evidenced by:

• DEST’s inclusion of certain financial data on donations and bequests in its annual financial snapshot of Australian universities since 2004;2

• the Business/Higher Education Roundtable (BHERT) report Increasing Support for Australian Universities,3 chaired by Emeritus Prof Dennis Gibson AO;

• the Howard Government’s initiative to establish a $6b Higher Education Endowment fund (HEEF) to in part match philanthropic capital gifts;4

• aggressive expansion of fundraising and alumni staff positions in the majority of universities;5 and

• raised media interest in significant gifts to universities such as that of Mr Feeney’s Atlantic Philanthropies.6

The Australian Centre for Philanthropy and Nonprofit Studies (CPNS) has pioneered fundraising teaching and research in Australia having established the first Australian tertiary fundraising units in 1990 and being instrumental in developing a growing research agenda in the field. In 2005, after consultations with industry bodies, CPNS initiated a research agenda to develop measures and data collection instruments to provide useful information about educational institutions’ fundraising and alumni relations operations. In 2005, in conjunction with the Association of Development and Alumni Professionals in Education (ADAPE), a survey of ADAPE members in Australian and New Zealand schools and universities provided some aggregate data focused more particularly on school respondents. 7 The SOFAR involvement reflects the wish to create more knowledge about the sector for universities’ various stakeholders, This effort begins the process of questioning ‘what is success?’. It prompts participants to measure not only against their budgets but against their potential. By the same token, it gives an Australian context to the realities of current giving, especially in an environment where outcomes headlined tend to be about the stellar Harvard, Stanford billion dollar donations resulting from long decades and traditions of giving to higher education in the US.

2 DEST, Annual Financial Statements. The publication and related guidelines are available from http://www.dest.gov.au/sectors/higher_education/ 3 B-HERT Position Paper No. 13 (December 2006) - Increasing Private Support for Australian Universities available at http://www.bhert.com/documents/B-HERTPositionPaperNo.13_001.pdf 4 http://www.heef.dest.gov.au/ 5 A number of universities placed job advertisements for all levels of staff in a very competitive fundraising employment market, often looking to North America to fill these positions. 6 Atlantic Philanthropies gifts to Australian Universities can be found at http://atlanticphilanthropies.org/ and a recent biography of Mr Feeney is Conor O'Clery's The Billionaire Who Wasn't, Public Affairs, 2007. 7 ADAPE Australasia Inc., and The Centre of Philanthropy and Nonprofit Studies, Educational Development in Australasia: 2005 Benchmarking Survey, ADAPE and Queensland University of Technology, November 2005.

http://www.dest.gov.au/sectors/higher_education/

http://www.bhert.com/documents/B-HERTPositionPaperNo.13_001.pdf

http://www.heef.dest.gov.au/

http://atlanticphilanthropies.org/


1.2 DEST ANNUAL FINANCIAL REPORTS Each year, Universities are required to prepare Annual Financial Statements in accordance with reporting guidelines set by the Department of Education, Science and Training.8 The publication adjusts information to make it comparable and standard across all universities. Since 2004, it has required financial information on donation and bequests, scholarship and prizes and non-government grants. There appears to be significant under reporting of such income given the results of the SOFAR survey, probably due to data collection issues. Some accounting standards mean that what would normally be regarded as gift income is recorded as capital. This appears to be the case with large building constructions and hinges on the wording of the gift agreement. Other issues arise with gifts in kind valuations and formal accounting standards. 1.3 SOFAR DEVELOPMENT During 2005, a pilot survey designed to enable institutional benchmarking was circulated amongst practitioners for comment, and in early 2006 a revised survey was trialled with Australian and New Zealand Universities, which was reported in a CPNS working paper. 9 We anticipated that the following stakeholders would find the data generated by our research useful:

• Managers who have responsibility for designing and evaluating fundraising and alumni relations programs

• Staff who want to know how their work compares – important information when building a career in this field

• Vice-Chancellors who make the resource allocation to resource fundraising and alumni activities want to know the return on their investment – both absolute returns and relative to peer institutions

• Alumni who want to know the level of effort their institution is putting into the relationship

• Donors who want to know if the institution they support is attracting wide support, and doing so efficiently

• Volunteers who give their time to assist a particular institution, and want to know how their efforts compare with others

• Governments which might seek to facilitate incentives or remove barriers for philanthropic giving to universities or provide resources to encourage greater fundraising and alumni development capacity

• The Public, including potential students, who might reasonably judge private support and the quality of alumni relations as indicative of the quality of an institution.

The survey design draws upon similar surveys that have been developed across a significant period in the United States of America10 and more recently in the United Kingdom focussing on educational institutions.11

8 The publication and related guidelines are available from http://www.dest.gov.au/sectors/higher_education/ 9 This survey was developed by Dr Daniel McDiarmid, General Manager of the consultancy Global Philanthropic and Adjunct Professor at CPNS under the auspices of CPNS. The Myer Foundation provided financial support to the initial stage of this project. Further information about the development of the survey instrument is available in Dr Daniel McDiarmid, Improving the Effectiveness of Fundraising and Alumni Programs using International Benchmarks, Working Paper CPNS 35, October 2006 available at http://eprints.qut.edu.au/ Global Philanthropic remains a research partner in the SOFAR survey. 10 For example, The Voluntary Support of Education and the Council ForThe Advancement and Support of Education. 11 Increasing Voluntary Giving to Higher Education (The Thomas Report) available at http://www.dfes.gov.uk/hegateway/hereform/voluntarygiving/index.cfm

http://www.dest.gov.au/sectors/higher_education/

http://eprints.qut.edu.au/

http://www.dfes.gov.uk/hegateway/hereform/voluntarygiving/index.cfm


Alumni relations, fundraising and business offices in US universities have been developing standard definitions for reporting gift income and expenditures in alumni relations, fundraising and other constituent relations since the late 1970s. This is aided by the comprehensive annual tax return required of all charitable institutions which has driven the development of financial data definitions and systems to collect such information.12 Since then, several standards have been published and used to gather data. These voluntary surveys have been used to measure and compare the fundraising-philanthropy performance of US universities and colleges. The Voluntary Support of Education (VSE) of the Council for Aid to Education (CAE) is comprehensive in its information. Participants are able to access their own data, and undertake extensive data mining and analysis of results going back ten years. Nearly 1000 institutions participate in the VSE survey, including more than 75% of four-year institutions. The survey forms and some of the data are available on the CAE website.13 Included amongst the available data are league tables of private support in total, and by state and by type of institution. The Council for the Advancement and Support of Education (CASE) provides standard definitions and a reporting regime for the management of advancement and for fundraising campaigns, and conducts an annual survey of the cumulative results of university fundraising campaigns. 14 Using on-line tools, CASE also offers benchmarking in alumni relations, and rolling surveys in email solicitation, soft-credits and salaries in the sector. In the United Kingdom, a group of about twenty university Development Directors, the “Ross Group,” developed an annual survey of gift revenue and costs with the express aim of “measuring the philanthropic health of institutions”. 15 Almost 80 UK institutions currently complete the survey – and these range across the spectrum of UK higher education, but exclude the universities of Oxford and Cambridge whose philanthropic returns are significantly higher than other UK institutions. The UK survey does not measure bequest intentions. It does however provide, in an accompanying paper, extensive advice on how staff are to distinguish what are “philanthropic donations”, which are to be reported in the survey, and “exchange transactions” which are not reported in the survey. Recognising that each year there are institutions completing the survey for the first time, the UK survey asks for the current year and previous two years’ data on the following:

• New funds raised (counting new pledges, unpledged cash, but excludes payments on previous pledges and excludes bequests)

• Cash income from philanthropic gifts, bequests, and other fundraising • Value of gifts in kind • Value of single largest gift and pledge received • The number of gifts and pledges of GBP500,000 and above • Details of the annual fund appeal: no of alumni of record, amount of gifts and pledges

received and the number of alumni contributing • Key questions about capital campaigns: financial target, duration of public phase, and

the percentage of target received before “going public”.

12 The IRS Form is known as the Form 990 and has recently been revised. It is available at http://www.irs.gov/charities/article/0,,id=176613,00.html 13 http://www.cae.org 14 The current survey can be seen at http://www.case.org/files/Research/PDFs/07CampaignSurvey_WebVersion_final.pdf 15 Increasing Voluntary Giving to Higher Education (The Thomas Report) available at http://www.dfes.gov.uk/hegateway/hereform/voluntarygiving/index.cfm

http://www.irs.gov/charities/article/0,,id=176613,00.html

http://www.cae.org/

http://www.case.org/files/Research/PDFs/07CampaignSurvey_WebVersion_final.pdf



The UK survey also seeks data on fundraising costs:

• Staff and non-staff costs • Expenditure on alumni relations • No. of fundraising staff and alumni staff • The institution’s total expenditure

The last questions of the UK survey seek data that will assist in analysis of the data:

• In what year did the fundraising program commence? • To whom does the Director of Development report? • Does the university have overseas offices or staff that participate in fundraising? • Is the institution involved in clinical medicine?

Although this UK data has been kept for only a few years it has already proved valuable in the broad policy area, providing the data which underpinned a British Government taskforce report on increasing voluntary giving to higher education.16 1.4 THE 2007 SOFAR SURVEY In early 2007, the researchers wrote to Vice Chancellors of all Australian universities to invite their institutions to participate in the SOFAR survey. Eighteen of the 39 Australian universities completed the survey, being 46% of all Australian institutions. All of the various types of institutions were represented such as Group of Eight (Go8), Australian Technology Network (ATN), Innovative Research Universities Australia (IRU) and New Generation Universities (NGU). Information was sought on the 2006 calendar year, being the financial year of universities and other educational institutions. SOFAR participation was on the basis that participating institutions would receive full disclosure of all data and only aggregated results would be publicly released. As is common in the early stages of annual benchmarking studies, some of the potential participants:

• were concerned about how their organisation would be perceived by stakeholders on the publication of the study;

• believed that they might be giving up a competitive advantage; or • could not obtain the required data in a cost effective or timely fashion due to their

internal reporting systems. A number of institutions expressed interest in participation in 2008 once they had their record keeping in order and had progressed in the establishment or restructuring of their fundraising and alumni offices. One organisation which did not participate informed the researchers that it was benchmarking internationally. The survey was delivered online and the software was found not to be as user-friendly as expected by respondents, despite assistance from the researchers. Once all responses had been received, data tables were prepared and forwarded to each participant for checking and comments. Researchers also followed up perceived inconsistencies with each institution for further clarification. Both the aggregated report for public release and draft report to participating institutions were provided to participants for clarification and comment before final release. In the analysis below, the median is usually used. The median is the middle of a distribution: half the scores are above the median and half are below the median. The median is less sensitive to extreme scores than the mean and this makes it a better measure than the mean for highly skewed distributions, which were evident in some results.

16 Increasing Voluntary Giving to Higher Education (The Thomas Report) available at http://www.dfes.gov.uk/hegateway/hereform/voluntarygiving/index.cfm


1.5 FUNDRAISING INCOME Individual Contributions Universities received 5,905 (median 201) contributions from individuals amounting to $8,594,147 (median $348,970) with a further $1,558,240 pledged. Donations range widely with a few large donations skewing the mean. Hence the median is more informative. For example, the total contributions by nine foundation board members equalled $1,410,736 with a mean of $352,684 and a median of $219,550. Universities who wish to develop their fundraising might begin with an effort to ensure that they receive contributions from those closely connected to the institution such as the governing board, foundation board, staff and alumni. It is somewhat sobering that just under half of the universities did not receive any contributions from their council or senate members and approximately two thirds did not receive a contribution from those specifically charged with overseeing the universities’ foundation. Sophisticated external donors such as major donors and foundations, particularly those with exposure to the environments in North America and Europe, will look to the internal support given to the institution by those involved in its governance and senior managers as a measure of the worthiness of the institution. Perhaps the expectation that those leading the university back their belief with financial support was not part of their recruitment. At the very least, university administrations might consider a change of role guidelines in future so donation support and advocacy for that support is implicit and encouraged. It is well said that nonprofit organisations are limited only by their access to affluence and influence. The argument that many senior volunteers give their time needs to be valued and considered, and of course there are many ways senior supporters can help the fundraising role beyond direct giving and asking. However, the burning concern evident in this survey is that those who presumably know their organisations best are not giving even the most token financial donation. Developing an internal culture of giving is an ongoing strategic issue identified in this part of the survey and in later questions. In the private school context, parents play a significant role at present in contributions in Australia, and this might also be a new field for some universities to cultivate with an appropriate program. Only one university reported making fundraising requests of parents of students. This may be an area of potential revenue growth, but most universities do not currently capture parents’ details at the time of a students’ enrolment, and few have specific programs for parents/familes. Arguably, the number and value of contributions could increase across all categories. The philanthropic pie for higher education can be bigger but the case for giving to higher education generally needs greater articulation. The specific elements that philanthropy can bring alongside existing government input does not appear to be well defined. Analysis of the number and value of contributions reveals a significant variation from the mean. Table 1: Individual contributors

Contributor category Institutions receiving

contributions (%)

Contributions (No.)

Median amount banked ($)

Governing board 56% 45 1,750 Foundation board 33% 9 219,550 Staff 72% 1,072 18,500 Alumni 78% 3,630 94,485 Parents of students or alumni 28% 8 1,025 Other 83% 1,141 125,515

Source: Appendix Table 1


Corporate. Foundation and International Contributions Australian companies appear to be significant contributors to universities with 90% of universities receiving contributions worth in total $7,343,521 with a further $8,789,119 pledged. Corporate foundations are less involved ($115,000). As greater numbers of Australian companies move to take advantage of the relatively easy to establish, new Prescribed Private Fund (PPF) structure this contributor category should grow. Government’s statutory corporations (e.g. corporatised agencies) appear to be significant contributors to universities with 90% of universities receiving contributions worth in total $183,235,320 (median 274,500) and a further $10,113,855 pledged. It is possible that further clarification is required in distinguishing between when governments are engaging in philanthropy and when it is contracted services such as the provision of research for some respondents. Philanthropic trusts and foundations are involved with a significant number of universities (89%) and with a fair number of contributions (105 with a median of 6). The total amount received was $5,497,183 with a median of $198,707 and a total of $1,921,783 with a median of $205,000. For those institutions that do not receive contributions from such sources, this represents one of the best immediate ‘bang for the buck’ opportunities in fundraising. Given the growth in Australian foundation creation at present and good investment returns on foundation corpus, distributions are in a growth phase for private foundations. Again, the new PPF option has proved a popular one with individuals and families, allowing as it does for tax effective structuring and the streamlining and profiling of family name and giving where desired. Contributions from international sources are of high value ($29,620,890), but few in number (26) and with less than half the universities (44%) receiving such contributions. A further $9,269,196 is pledged from international sources. It is another area for those institutions that do not presently receive contributions from this source to consider in any strategic planning to develop their philanthropic funds. Many universities have projects with international impact and therefore drawing power. Systems to search overseas foundation databases are now well established and within the reach of most organisations. Table 2: Corporate, Foundation and International Contributions

Contributor category Institutions receiving

contributions (%)

Contributions(No.)

Median amount

banked ($)

Total pledges

outstanding ($)

Domestic statutory corporations and government entities

89% 122 274,500 10,113,855

Domestic companies 89% 889 203,303 8,789,119

Domestic foundations, trustee companies

89% 105 198,707 1,921,783

Domestic nonprofit organisations 44% 94 46,650 400,000

Corporate foundations 17% 2 57,500 - International sources 44% 26 302,105 9,269,196




Bequests Only 8 bequests were realised in 2006 being $4,127,842 in value. It is estimated that known bequests total $52,347,808 with a median of $1,485,000. Bequests have the potential to be far more important given the generational transfer of wealth that will occur over the next decades with Australia’s aging and relatively wealthy baby boomers. They may well be the ‘sleeping giant’ for the higher education sector. Whilst it is generally agreed that the cost of seeking a bequest is low in comparison to the size of the gift, the time lag between investment and return may of course be decades. It takes a leadership with long term vision to invest in bequests but evidence suggests those organisations who have done so reap the rewards. Many charitable organisations are beginning to encourage donors to make provision in their wills through the appointment of bequest officers. The Giving Australia 2004 survey of Australian householders shows that only 58% of Australians have a will and, of these, 7.5% report leaving a charitable bequest.17 A recent study of Victorian probate returns indicates that fewer than 5% of Victorian estates provide a charitable bequest and the average amount bequeathed is just over 1% of the total estate assets. 18 While North American charitable bequest statistics are unlikely to be achieved in Australia without comparable taxation incentives (avoidance of estate duties and charitable remainder trusts), there is significant prospects for growth in this form of fundraising given the demographics and relativity wealthy cohort. It is useful to know the value of bequests as an indicator of the progress of bequest solicitation, but such information is difficult to ascertain from potential donors and valuation of bequests is at best a guess given the appreciation of property over the years or gift of the residue of an estate rather than a fixed sum or specific property. It is also well accepted that a significant percentage of bequestors choose not to notify an organisation of their intentions, making predictions an even more rubbery exercise. With the more concerted effort to make donors think about a bequest across all cause sectors, it seems likely that those in the marketplace now will win the long term benefit. Bequest research internationally indicates that people seldom change their charitable bequest intentions once made. The concern in the SOFAR survey is that a number of universities appear to not be actively seeking bequests at all. Table 3: Bequests

Bequest category Institutions receiving bequests

(%)

No. bequests Total ($) Median

($)

Bequests realised in the previous 12 months 22% 8 4,127,842 427,500 Bequests notified of known value 50% 139 52,347,808 1,485,000 Bequests notified of unknown value 44% 171


17 Giving Australia. Giving Australia: Research on Philanthropy in Australia (No. FaCS2086.0510). Canberra: Department of Family & Community Services, Australian Government, 2005. 18 Baker, C. How Victorians leave their money - patterns of transmission and giving. Swinburne University of Technology, 2007.


Gifts in Kind Since 2000, the taxation environment has significantly altered to encourage the gift of property such as shares of any value and land (including conservation covenants), intellectual property, vehicles and equipment over $5,000 in value.19 Our independent observation was that little has been invested in seeking share donations by institutions and these results bear out those observations, and one wonders if universities are making their donors aware of these options? The large number of ‘other’ category probably reflects a lack of records of such gifts and more rigorous record keeping in this category of giving may well in the future indicate a much higher level of contribution. Table 4: Gifts in kind

Gift Institutions receiving

gifts (%)

Estimated value ($) Median value ($)

Equipment 56% 3,471,825 64,000Land 0% 0 -Software licenses 6% 50,000 50,000Artwork 50% 1,026,147 50,000Shares 0% 0 -Museum artefacts 11% 210,000 105,000Other 44% 2,834,863 50,000

Source: Appendix Table 5 1.6 FUNDRAISING AND ALUMNI RESOURCING The resources of an institution invested in fundraising and administration is a matter that should be of considerable interest to internal stakeholders. Return on investment is important guidance for internal budgeting decisions, and requires accurate measurement of expended resources. External stakeholders also have an acute interest in what they refer to as administration and fundraising expenses, often seeking to reduce them to ratios and comparing them to notional benchmarks. Many unsophisticated commentators and donors have unrealistic views driven by tabloid media notions that fundraising should be a costless exercise conducted by volunteers or that public fundraising organisations are often characterised by administration expenses that “gobble up” donations.20 The reaction of some organisations and their fundraising staff has not been helpful with claims that organisations ensure that no administration expense is taken from donations. Further, very creative internal accounting arrangements that shift what are clearly fundraising and administrative costs to other cost centres or reclassify them to operational expenditures such as education or marketing are used. Such public misconceptions and game playing is further institutionalised when charity regulators such as those in New South Wales and Victoria feel compelled to set fundraising cost ratios which are not based on any rational examination of the evidence.21

19 Refer CPNS Current Issues Sheet 2002/4, Tax Deductible Gifts of Property over $5,000, available at http://www.bus.qut.edu.au/research/cpns/documents/2002%20Tax%20Deductible%20Gifts.pdf 20 Giving Australia. Giving Australia: Research on Philanthropy in Australia (No. FaCS2086.0510). Canberra: Department of Family & Community Services, Australian Government refer to commentary at p 32 of donor expectations, 2005. 21 Further information on these issues is available in Ted Flack, The mandatory disclosure of cost of fundraising ratios: Does it achieve the regulators’ purposes? CPNS Working Paper no. 26, 2004 available at available through QUT ePrints at http://eprints.qut.edu.au/archive/00004555/

http://www.bus.qut.edu.au/research/cpns/documents/2002%20Tax%20Deductible%20Gifts.pdf

http://eprints.qut.edu.au/archive/00004555/


The Centre believes that such ill-informed public attitudes and resultant ‘game playing’ need to be altered through vigorous debate informed by evidence-based research. It is anticipated that in time this research project will contribute to that evidence base and consequent debate. Importantly, the development of this survey offers the prospect of consistent accounting definitions and allocation protocols, which form the basis of any useful benchmarking exercise. It is also critical that cost differences evident between start up and established fundraising and alumni operations and the different stages of a campaign cycle are measured and acknowledged. The University of Oxford in the years 2002-2004 had fundraising costs of 14% of the money raised in those years, but individual units had costs ranging between 0 and 179%. It is commonly accepted that the average cost of fundraising in the US is about 16%. For top 500 charities in the UK the average is about 15.3% with a range of 0 to 123%.22 In Australia, the NSW fundraising regulators use an expense benchmark of 40% of the gross proceeds as unacceptable.23 We deliberately have not calculated any return of investment or cost of fundraising ratios on the 2007 returns for several reasons. Without considerable data cleansing the raw results are misleading, particularly averages because several participants did not have any fundraising costs or did not provide them in the appropriate form. Our interaction with survey participants indicated that in all but a few cases record keeping would have to be modified in future years to better capture the expenses needed for accurate calculation. This was the experience as well in the UK for the initial Ross Group surveys. We expect this to improve in future years as record keeping is altered and more participants engage in the survey. Such ratios are best taken over a three or five year rolling period rather than a single year because of the nature of fundraising campaigns and long return on investment periods for some types of fundraising (e.g. early stage direct mail programs, new events, bequests). It is also appropriate to look at campaigns as a whole, rather than individual years of a campaign. Another factor in the Australian landscape is the relative youth of many university development operations. Cost ratios have more opportunity to stabilise over time so it might be anticipated that less established offices may be operating with the higher cost of fundraising that is not uncommon in new players still building donor volume. We just do not have the quality or amount of data to make any sensible comments on cost of fundraising at present. This will come in future years. Fundraising and Alumni Staff Median full time equivalent staff employed in fundraising and alumni relations was 6.30 with a range of between none and more than 25 staff. Accurately recording and ascertaining the amount and costs of human resources is essential for such tasks, but not a simple exercise. For instance, ascertaining the proportion of staff who are also engaged in duties other than fundraising and alumni relations is difficult, but compounded by the previously noted fundraising and administrative expense perceptions by external stakeholders. Similarly, the question arises of allocating a proportion of university leaders’ salaries to development if they are realistically engaged in fundraising for a percentage of their time. US surveys indicate that some deans or university presidents may devote for instance 50% of their time to working in this area. A significant issue for institutions in structuring their fundraising and alumni resources is whether to adopt a central office structure or locate staff resources in units such as faculties, schools or research units, or a hybrid of both. Only four of the institutions had staff resources located in units with only one not having a central office presence as well. When future survey

22 S. Acharya and E Dimson, Endowment Asset Management - Investment Strategies in Oxford and Cambridge, Oxford university Press, Oxford, 2007 23 NSW Government Office of Liquor, Gaming and Racing, What controls exist over charitable fundraising? available at http://www.olgr.nsw.gov.au/charitable_what_controls.asp.

http://www.olgr.nsw.gov.au/charitable_what_controls.asp

data is available it is anticipated that some observation may be made about the effectiveness of such strategies and the conditions under which they produce optimum outcomes. What of the spread of activities and priority apparently given them? The importance of donor research is clearly indicated with a full time equivalent staff member filling this role in the median data. Would other cause areas reflect a similar priority for research? It is unlikely. Relationship management/donor-based fundraising proponents would perhaps applaud that at least some dedicated personnel (0.40 FTE) are engaged in donor stewardship. Of course, this task would also be implicit hopefully in other roles across the office. Table 5: Staff Activity

Main activity of staff Institutions with staff in activity

(%)

Total (median FTE)

Senior fundraising and alumni relations management 78% 1.25Fundraising 78% 1.50Alumni relations 83% 1.00Database management and database entry 72% 1.00Prospect and alumni research 56% 1.00Gift processing 56% 0.33Event management 67% 1.00Donor stewardship 56% 0.40Administration support 67% 0.55Other 11% 2.00Total staff in fundraising and alumni relations - 6.30

Source: Appendix Table 8 Expenditure Nearly half the expenditure is devoted to staffing costs (46%) and with consultants (12%) reaches nearly sixty percent. The current competitive market for fundraisers will continue into the foreseeable future with consequent pressures on salaries and retention issues. However, universities have significant advantages over other nonprofit employers because of their ability to offer candidates comparatively stable and secure positions in relatively well resourced and experienced fundraising teams compared to many nonprofit organisations. Institutions were asked about their intentions for additional staff positions in 2007 and it appears that significant expansion will have taken place. In 2007, staff were forecast to be sought mostly in fundraising – general or major gifts (15), database (9), and alumni – general (5.5) across the 18 universities. On average, universities are seeking a median of 1 or 2 staff members in each of the categories, with the exception of alumni – communications and publications, for which no positions will be sought. With human resources driving most costs the vital role of senior volunteers/advocates to expand the asking front again is underlined. Given the growth in some departments set to occur in 2007, tracking can begin of the impact of staff increases. Again, a short-term view here is myopic, as fundraising is a long road paved by relationship building and the decision to give is not made overnight. Results of new staff may take two to three years to be evident. While publications at 4% is not a major cost contributor, it will be interesting to see if more online communication and networking, particularly with the advent of Web 2.0 sees a decrease in costs or if more donors can be derived from these new outreach vehicles.


Figure 2: Expenditure of fundraising and development offices

Salaries46%

Database5%

Consultants12%

Publications4%

Other media9%

Events - domestic3%

Events - international4%

Mailing4%

Telephones1%

Office expenses - travel2%

Other10%

SalariesDatabaseConsultantsPublicationsOther mediaEvents - domesticEvents - internationalMailingTelephonesOffice expenses - travelOther

Source: Appendix Table 13 Campaign Phase Fundraising campaigns do not fit within a single calendar or financial year and usually span five or more years depending upon the type of campaign and size of the institution. Expenses and income will vary between different phases of the campaign cycle and thus comparisons between institutions that do not take account of their campaign phases will not be very enlightening. Fifty percent of institutions were not involved in a campaign at present and only two were in the active publicised phase. Those in active campaign mode had reached more than 65% of their campaign goal. One third were in a quiet phase or planning phase leading up to the active campaign . During this planning phase, project identification and development occurs together with an institutional readiness or feasibility study which can mean significant expense without any resultant income during that fiscal period. Another interesting aspect to look for in future will be to track over time the impact of these campaigns on future annual giving. Embracing more major donors and the marketplace noise of a successful capital campaign often boosts the ongoing donation trend line for organisations and moves them into a more mature level of operation.


Figure 3: Involvement in capital campaigns

0

2

4

6

8

10

12

Not involved in acampaign at

present

Planning phase(project

development,feasibility study,or considering a

campaign)

Quiet phase(recruitment of

volunteer leadersand lead gifts)

Public phase(active, publicised

campaign)

Accounting-stewardship

(wrapping up)

Uni

vers

ities

(fre

quen

cy)

Source: Appendix Table 12 Alumni Data It is reasonable to anticipate that alumni would be good prospects to contribute during their lifetime or be positive advocates to encourage others to contribute. Being able to effectively build a relationship with alumni is critical to this outcome and regular communication is strategic to building such a relationship. The mobility of alumni, particularly those who reside overseas, female alumni who have changed surnames and the growing alumni numbers provide significant challenges for database maintenance. The percentage of known alumni addresses of all living alumni ranged from 1% to 73%. Only one institution sought fees for alumni membership (96 members paying a total of $13,395) with institutions having a median of 6.0 active domestic chapters and 5.0 international chapters. The median of the percentage of alumni who attended an event during the year was 2.7% with a range between none recorded to nearly 10%. Table 6: Alumni contact

Median Living alumni of known address 44,040 Living alumni of unknown address 28,516 No. of active domestic chapters 6.0 No. of international chapters 5.0 % of alumni attending an event during the year 2.7

Source: Appendix Table 10 Prospect Management The past fifteen years has seen increased use of individualised gift solicitation strategies (a practice known as moves management, prospect management or sometimes relationship fundraising). Ten universities reported managing a total of 694 prospects or donors with a total gift potential of $176.5 million. A further 3,072 prospects and donors with unrated donation potential are being managed by these universities. Given Australia’s increasing crop of



millionaires, due to property and other booms, it will be interesting to track growth in the higher echelons of the following table over time. Table 7: Prospects under intentional management

Gift potential Prospects and donors actively managed

$10,000,000+ 2 $5,000,000+ 11 $1,000,000+ 44 $500,000+ 67 $100,000+ 141 $50,000+ 141 $10,000+ 288 Not rated 3,072

Source: Appendix Table 11 1.7 ISSUES FOR 2008 SOFAR SURVEY Some universities declined to participate in the survey because they were establishing or restructuring their Development Offices. Others could not make any meaningful attempt at completing the survey because the data required had not been collected in 2006 or was too difficult to obtain within the time frames. It is anticipated that the survey and accompanying guides may prompt more considered record keeping, which will ease participation in the SOFAR survey in future years. Further, participants reported that the online survey software was not as user-friendly as expected. We have encouraged participants to assist us in refining the survey and its data dictionary definitions. The 2008 SOFAR survey will reflect these improvements. QUT has installed a new online software program which is expected to provide greater flexibility and user-friendliness for survey participants. CPNS intends to replicate the SOFAR survey in 2008 and all Higher Educational institutions, residential colleges and schools will be invited to participate in an online survey in March 2008. Again, only those institutions that participate in the survey will receive the full results of the survey. It is at this level for the committed participants that the richest data will flow. By comparing directly with others of a similar age of development operation, geographic market or size, telling comparisons can emerge. Success and failure at both a macro and micro level can be put in context and action/trials for improvement instigated. In addition, the discipline of recording accurate data in defined ways and building a measurable trend over time may faciliatate better internal analysis. Agreeing to be part of benchmarking can be an exposing exercise. It reflects well on those who take this step in that it signifies the wish to be a learning organisation (not just an institution of learning!). It is a pinnacle of evaluation and bespeaks a management that is willing to air mistakes, work in progress and really live a culture of continuous improvement. Over time, it is hoped that benchmarking members will increasingly drive and grow this benchmarking process now the ice has been broken and establishment work done. This foundational input has been a contribution of CPNS, stemming originally from the work of Dr Daniel McDiarmid and some valued input by The Myer Foundation. Hopefully the higher education sector will step forward to enhance this benchmarking in future years so that it can be the best possible tool to hone approaches and lift their outcomes.

APPENDIX Table 1: Individual Contributions: Cash and Pledges

Individual contributions: Cash and pledges

Institutions receiving

contributions (%)

Number of contributions

receivedTotal amount banked ($)

Number of pledges received

Total pledges outstanding ($)

Total 56% 45 75,070 3 51,000Mean 5.6 9,384 1.5 25,500

Median 1.5 1,750 1.5 25,500Total 33% 9 1,410,736 2 40,000

Mean 3.0 352,684 2.0 40,000Median 2.0 219,550 2.0 40,000

Total 72% 1072 408,475 10 56,900Mean 97.5 37,134 5.0 28,450

Median 12.0 18,500 5.0 28,450Total 78% 3630 2,519,582 120 663,440

Mean 363.0 229,053 24.0 132,688Median 199.0 94,485 12.0 3,740

Total 28% 8 22,475 3 2,700Mean 2.7 7,492 3.0 2,700

Median 3.0 1,025 3.0 2,700Total 83% 1141 4,157,809 66 744,200

Mean 95.1 296,986 11.0 124,033Median 46.5 125,515 6.0 74,850

Total 5905 8,594,147 202.00 1,558,240Mean 454 572,943 28.86 194,780

Median 201 348,970 13.00 65,550

Governing board

Foundation board

Current staff

Alumni

Parents of students/alumni

Other

TOTAL


Table 2: Corporate and Foundation Contributions: Cash and Pledges

Corporate and foundation contributions: cash and

pledges

Institutions receiving

contributions (%)

Number of contributions

receivedTotal amount banked ($)

Total pledges outstanding ($)

Total 89% 122 183,235,320 10,113,855Mean 11.1 14,095,025 1,685,642

Median 7.0 274,500 272,250Total 89% 889 7,343,521 8,789,119

Mean 68.4 524,537 1,255,588Median 28.0 203,303 80,000

Total 89% 105 5,497,183 1,921,783Mean 8.8 392,656 320,297

Median 6.0 198,707 205,000Total 44% 94 684,191 400,000

Mean 18.8 114,032 200,000Median 17.0 46,650 200,000

Total 17% 2 115,000 -Mean 1.0 57,500 -

Median 1.0 57,500 -Total 44% 26 29,620,890 9,269,196

Mean 4.3 4,231,556 9,269,196Median 2.0 302,105 9,269,196

Total 1238 226,496,105 30,493,952Mean 88 14,156,007 4,356,279

Median 31 898,081 885,000

Domestic statutory corporations and

government entities

Domestic companies

Domestic foundations and trustee companies

contributions

Domestic nonprofit organisations

Corporate foundations

International sources

TOTAL


Table 3: Bequests

Bequests

Number of bequests realised in the previous 12

months

Total bequests realised in the

previous 12 months ($)

Number of all bequests notified of known value

Total of all bequests notified

of known value ($)

Number of all bequests notified of unknown value

Institution has a gift club or other form of society for people who

have advised the institution that they have made a bequest in

favour of the institution. Total 8.0 4,127,842 139.0 52,347,808 171.0 33%Mean 2.0 1,031,961 17.4 5,816,423 21.4

Median 1.5 427,500 5.0 1,485,000 7.5

Table 4: Other Contributions (not elsewhere classified)

Other contributions Total value ($)

Total 936,415Mean 156,069

Median 30,312


Table 5: Gifts in Kind

Gifts in kind

Institutions receiving gifts in

kind (%)

Estimated value ($)

Total 56% 3,471,825Mean 433,978

Median 64,000Total 0% 0

Mean -Median -

Total 6% 50,000Mean 50,000

Median 50,000Total 50% 1,026,147

Mean 114,016Median 50,000

Total 0% 0Mean -

Median -Total 11% 210,000

Mean 105,000Median 105,000

Total 44% 2,834,863Mean 404,980

Median 50,000Total 7,592,835Mean 542,345

Median 176,363

Other

TOTAL

Software licences

Artwork

Shares

Museum artefacts

Equipment

Land



Table 6: Total Contributions for the Year 200624

Total contributions for the year Total value ($)

Total 246,469,143Mean 13,587,161

Median 1,611,651 24 This table is the sum reported by respondents in the survey, although the individual items reported do not sum to this amount. It should be treated with caution.

Table 7: Annual Fund 2006*

Annual fundInstitutions receiving

contributions (%) % of gifts received % of total givenTotal 17% 1.30 12.52

Mean 0.65 6.26Median 0.65 6.26

Total 17% 3.00 1.40Mean 1.50 0.70

Median 1.50 0.70Total 39% 26.03 49.73

Mean 4.34 8.29Median 3.10 3.50

Total 50% 429.05 513.63Mean 71.51 85.61

Median 93.83 88.80Total 6% 0.54 0.93

Mean 0.54 0.93Median 0.54 0.93

Total 39% 205.80 213.15Mean 34.30 35.53

Median 4.50 5.58

Parents of students/alumni

Other

Governing board

Foundation board

Staff

Alumni

Annual fund

The percentage of last year's annual fund contributors

contributing to this year's annual fund.

Renewing donors' total annual fund contributions as a

percentage of their total annual fund giving last year.

The total of this year's annual fund contributions expressed as a percentage of the cost of this year's annual fund (including

relevant direct staff costs). Mean 51.76 75.92 145.49

Median 47.79 85.77 123.00

*Some universities do not have annual funds.


Table 8: Development Office Staff 2006

StaffInstitutions

conducting activity Staff in central office Staff in units Total staffTotal 78% 30.60 - 31.50

Mean 2.19 - 2.25Median 1.25 - 1.25

Total 78% 27.15 2.00 29.15Mean 2.09 1.00 2.08

Median 2.00 1.00 1.50Total 83% 21.80 3.50 24.30

Mean 1.68 0.88 1.74Median 1.00 1.00 1.00

Total 72% 16.95 - 16.95Mean 1.30 - 1.30

Median 1.00 - 1.00Total 56% 8.70 - 8.70

Mean 0.97 - 0.97Median 1.00 - 1.00

Total 56% 6.65 - 6.65Mean 0.67 - 0.67

Median 0.33 - 0.33Total 67% 11.00 0.50 11.50

Mean 1.10 0.50 1.05Median 1.00 0.50 1.00

Total 56% 5.65 1.00 6.65Mean 0.63 1.00 0.74

Median 0.40 1.00 0.40Total 67% 13.90 - 13.90

Mean 1.16 - 1.16Median 0.55 - 0.55

Total 11% 2.00 - 2.00Mean 2.00 - 2.00

Median 2.00 - 2.00Total 134.80 7.00 140.80Mean 8.43 1.75 8.28

Median 5.95 1.75 6.30

Senior fundraising and alumni relations management

Fundraising

Alumni relations

Database management and database entry

Administration support

Other

TOTAL

Prospect and alumni research

Gift processing

Event management

Donor stewardship


Table 9: Number of Positions Sought by Organisation in 2007

Number of positions sought by organisation

Fundraising staff - general or major

gifts

Fundraising staff - alumni or annual

givingFundraising staff -

bequestsAlumni staff -

generalAlumni staff -

reunions

Alumni staff - communications and publications Database staff

Prospect Research staff

Donor Stewardship staff

TOTAL 15.0 3.0 2.0 5.5 1.0 0.0 9.0 2.6 2.0Mean 1.7 1.0 1.0 0.9 1.0 - 1.5 0.9 1.0

Median 2.0 1.0 1.0 1.0 1.0 - 1.0 1.0 1.0 Table 10: Alumni

Alumni

No. of living alumni of

known address

No. of living alumni of unknown address

No. of alumni who paid

alumni dues during the year

Total receipts from alumni

dues ($)

No. of active domestic chapters

No. of international

chapters

% of alumni attending an

event during the year

TOTAL 765,806 438,976 96 13,395 92 89 36Mean 47,863 31,355 96 13,395 8.4 6.8 2.8

Median 44,040 28,516 96 13,395 6.0 5.0 2.7



Campaign phase Institutions in phase Units in phase Campaign goal ($)Campaign results to

date ($)Total 56% 61% - -

Mean - -Median - -

Total 28% 11% 26,000,000 5,000,000Mean 13,000,000 5,000,000

Median 13,000,000 5,000,000Total 6% 6% 35,000,000 14,000,000

Mean 17,500,000 7,000,000Median 17,500,000 7,000,000

Total 11% 6% 13,500,000 9,400,000Mean 13,500,000 9,400,000

Median 13,500,000 9,400,000Total 0% 6% 750,000 783,000

Mean 750,000 783,000Median 750,000 783,000

Total 37,600,000 20,551,000Mean 6,266,667 6,850,333

Median 3,250,000 1,700,000

Not involved

Planning phase

Quiet phase

Public phase

Accounting phase

TOTAL

Prospects $10,000,000+ $5,000,000+ $1,000,000+ $500,000+ $100,000+ $50,000+ $10,000+ Not ratedTOTAL 2.00 11.00 44.00 67.00 141.00 141.00 288.00 3072.00Mean 1.00 11.00 6.29 11.17 14.10 15.67 32.00 384.00

Median 1.00 11.00 2.00 6.00 5.50 14.00 20.00 117.00

Table 11: Prospect Management

Table 12: Campaign Phase

Table 13: Development Office Expenditure

Total 78% 4369845 - 4434845Mean 397259 - 369570

Median 264000 - 217000Total 67% 121288 30000 241476

Mean 15161 30000 30185Median 12500 30000 23523

Consultants Total 33% 377101 - 377101Mean 62850 - 62850

Median 59188 - 59188Total 61% 147385 155585

Mean 21055 19448Median 20000 17500

Total 39% 5000 178972 183972Mean 5000 35794 36794

Median 5000 40000 40000Total 72% 350322 - 350322

Mean 35032 - 35032Median 16150 - 16150

Total 28% 42000 - 42000Mean 21000 - 21000

Median 21000 - 21000Total 56% 146901 - 146901

Mean 20986 - 20986Median 20000 - 20000

Total 56% 74958 - 74958Mean 10708 - 10708

Median 5116 - 5116Total 67% 215557 - 215557

Mean 26945 - 26945Median 7533 - 7533

Total 28% 428198 - 428202Mean 85640 - 85640

Median 50000 - 50000TOTAL Total 6,230,055 208,972 6,602,419

Mean 479,235 34,829 471,601Median 258,000 35,000 277,000

Mailing

Telephones

Salaries

Database

Publications

Other media

Office expenses, travel

Other

Events - domestic

Events - international


Survey of Fundraising and Alumni Relations


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