By Jeff Jowdy, President, Lighthouse Counsel

 

 

By Victor Wilson, Senior Consultant, Lighthouse Counsel | Vice President of Student Affairs, Emeritus, University of Georgia

 

 

Philanthropy has played an essential role in American higher education since John Harvard’s donation created Harvard University in 1636. Higher education has played a vital and leading role in the growth of philanthropy and the profession of advancement since then.

Giving USA 2024 reported that giving to education was at an all-time high, even when adjusted for inflation. According to CASE, giving to U.S. higher education institutions was $58 billion in the fiscal year ending June 30, 2023.

While there are positive trends, higher education institutions still face varying challenges.

Daunting Challenges

The need for and importance of philanthropic support has increased while institutions face daunting challenges:

Relevance

  • The pandemic illuminated the need for vocational workers, and the prospect of student debt has many high school graduates considering technical training.
  • With the rise of distance education, schools must more effectively articulate the case for and benefits of being and living on campus.
  • Online education is regarded as an alternative to the expense of an on-campus education. For college or university, online education is expensive, particularly if offered in addition to the campus-based education.
  • Schools must ensure that their online programs are robust and differentiated from competitors.
  • As higher education costs rise, the pressure to major in a professional program with a positive “return on investment” does as well. There is growing concern and discussion about the “real world” relevance of some higher education programs and traditional degrees.
  • Colleges and universities must ensure that graduates have the practical, technical and soft skills needed for the workforce.

Affordability

  • Student loan debt and tuition are increasing, and graduates are struggling to repay loans. Large debt limits workforce options based on the need to repay loans.
  • There are recent calls to shrink degree completion to three years to offset student costs.

Enrollment

  • The number of high school graduates in some regions of the country is decreasing, leading to lower enrollment, particularly in small private and faith-based colleges and universities.
  • As students increasingly opt for vocational/technical training, colleges and universities may find their pool of prospective students shrinking.
  • Annual college closures are likely to increase above their current rate if the anticipated decline in higher education enrollment transpires, according to a Federal Reserve Bank of Philadelphia working paper.
  • An analysis by Deep Thoughts in Education reveals that approximately 30 nonprofit universities ceased operations in 2024.

Political Environment

  • With changing demographics in the United States, institutions face pressure to address racism, sexism and other inequities to ensure an inclusive environment. Calls for greater inclusivity and diversity can be met with resistance to “woke” education, resulting in tensions among stakeholders.
  • Campus actions and policies increasingly could become an internal or external lightning rod. With today’s geo-political climate and a politically divided nation, donor activism is increasing, with some donors placing conditions on their contributions or canceling their commitments over disagreements with the university.

Technology

  • Information technology tools are inextricable from modern education. Sadly, they are expensive and carry the risk of external threats and internal abuse. Colleges and universities need financial support to keep up with rapid changes in technology and maintain its infrastructure.
  • Students have embraced distance learning – and competitors offer it – so schools must continue to adapt to online and hybrid learning models.
  • Artificial intelligence and automation are transformative, and institutions are learning how to embrace them while maintaining academic integrity.

Leadership

  • The average tenure of a president continues to shrink, leading to more frequent disruptions in the continuity of leadership. There are also continuing debates as to who is now qualified to be a president. Many do not feel experience in higher education is necessary anymore, and more political leaders are being appointed without endorsement from campus constituencies.

These challenges may adversely affect the perceptions of donors and prospective donors. However, they also present opportunities for refining an institution’s identity, which could increase philanthropic support.

We offer observations based on our 25 years of partnering with higher education institutions and the experience of our team members, who include former university presidents and vice presidents. The following are tips for increased success in 2025.

Tips for Increased Success

Staff Recruitment, Retention and Coaching

  • The right leadership is essential for an advancement program to fulfill its potential. At larger institutions, a poor leader can survive while momentum carries a program. At the same time, it can take years to fix problems and increase success.
  • Passion for the institution is essential in advancement. Staff retention statistics are poor, and smaller institutions have challenges competing with larger institutions and the for-profit sector. The average tenure in a single position is two to three years in a profession where deep relationships built on behalf of the institutions are vital.
  • Leaders should work to provide a stellar, positive culture for the advancement team by investing in training and development for all team members. Be wary of hiring professionals with a history of short tenures – especially as they mature in the profession. Have succession planning in place while making sure team members know they are valued.
  • Increase staff where needed – the return will more than pay for itself. CASE’s VSE survey data from 101 institutions showed a typical return on investment in 2018 of 942 percent! With returns of three to five times the investment, this presents a sound business model for enhancing staffing. You need enough staff to support essential functions and to be in front of your major donor prospects.
  • Consider outsourcing certain staff functions when facing complex staffing issues. Some positions may only be needed for a specific duration, which also allows the opportunity to expand a search or develop additional internal capacity.
  • Invest in relationship-based training rather than sales/insurance training. Transactional approaches may see short-term gains but will lose in the long term. Build capacity so that internal staff coaches your major gift team.

Growing Constituency Engagement

  • Most significant gifts to higher education come from those engaged with the institution. Provide meaningful and sustainable opportunities to engage alumni and friends, including future friends. Potential significant donors should be offered the opportunity to engage in the college/university activities of interest to them.
  • Create engagement opportunities for alumni to connect with each other and the institution through mentoring programs, regional events and virtual programs and platforms.
  • Build a strong student alumni program and educate faculty and staff that students are the institutions’ customers, future alumni and donors. Plan to keep student leaders involved with the institution as they graduate – this can have a significant impact on alumni giving.
  • Every academic program should have an advisory council, which should be staffed fully or partially by advancement professionals. Properly support advisory councils for alumni, colleges and programs. Provide opportunities for continued involvement and communication when people leave these groups.

Enhancing Cultivation and Stewardship

  • While focusing on major gifts, ensure that every donor’s giving and stewardship experience is as personalized as possible. Stay attuned to donor perceptions and interests through regular visits, broader surveys and focus groups.
  • While institutions have a need for unrestricted gifts, most often initial gifts are for a specific program or need. As donors bond and become more engaged with the institution, they become comfortable with unrestricted giving. Focus on aligning institutional goals with donor passions. Personalize donor experiences by targeting your outreach based on interests, past giving and engagement patterns.
  • Regularly recognize and thank donors with personalized updates about how their contributions make a difference. Effective stewardship builds trust and helps retain donors. Remember that keeping donors is much easier and more cost effective than securing new ones.
  • The importance of storytelling is vital – bringing to life the difference a donor can make (and supporting it as appropriate with facts). Interaction with students who have benefited from a donor’s support is paramount. Students tell the story better than anyone. From letters from scholarship recipients to lunch with them, make every effort to connect donors with the students and faculty who have benefited from their generosity.
  • Use technology to enhance relations through a hybrid model of donor engagement, combining in-person and virtual interactions to meet diverse preferences. With technology and AI-powered tools, outreach can be increasingly personalized, speaking to a donor’s history and interest. Institutions and donors are embracing technology and virtual meetings/visits (paired with in-person visits and gatherings) to maximize participation and flexibility. Key campus traditions as well as student presentations such as TEDx, pitch competitions, etc. should be online and accessible.
  • Focus on data integrity – institutions of all sizes suffer from inaccurate records and insufficient procedures and support.
  • Be sure that any donor or prospective donor outreach is in sync with the desires of the donors.

Growing Giving Opportunities and Methods

  • The “Great Wealth Transfer” is expected to see around $84 trillion transferred to younger generations by 2045, primarily from the aging Baby Boomer generation. This figure is based on research from Cerulli Associates. Higher education is seeing great success and great opportunity with planned giving.
  • In major campaigns, we see planned gifts typically accounting for 20% to 30% and sometimes approaching 50%. CASE reports a substantial increase in endowment gifts to higher education in recent years.
  • Enhance planned giving programs through staffing and technology to make planned giving understandable and easy for donors, and to share compelling legacy stories.
  • Share a variety of giving opportunities, including capital, programming and endowment. Develop an ongoing catalog of gift opportunities for each college/unit/program. Educate donors about the opportunities to spread a gift commitment over time and the use of donor-advised funds, IRA distributions, matching gifts and planned/legacy giving.
  • Donors, especially younger donors, are increasing their giving through innovative methods and to causes beyond traditional higher education and nonprofits.
  • Crowdfunding campaigns and giving days can use online platforms to target younger donors and drive their engagement.
  • Keep appeals fresh. Your donors and prospective donors have many organizations seeking their support. Consider how you can stand out.

Increasing Communication Effectiveness

  • Advancement communications is different than traditional marketing. Your advancement communications need to be coordinated in delivery and content with a donor focus. Highlight your institution’s impact with compelling stories that emotionally connect with audiences. Invite the donor to be the hero of the story.
  • Communicate with donors through multiple channels and in ways that they prefer. If a donor texts you, this opens the door for appropriate texting. Video messaging (such as birthday greetings) can be very effective with individual donors. Your communications plan should include broad, overarching advancement messaging (coordinated with that of the institution) and funnel down to communications tailored as much as possible to each donor/prospective donor.

Building a Culture for Philanthropy

  • Advancement professionals must understand the institution’s mission and vision. That means they must be included in planning and must be on board with the institution’s direction.
  • For maximum success, philanthropy must be embraced across the campus, from the board and president to academic and administrative leaders to faculty and staff.
  • The university community needs to understand the critical role advancement plays in the institution’s health.
  • Donors value their teachers and mentors, thereby making them excellent ambassadors.
  • Since alumni value former teachers and mentors, encourage those individuals to be ambassadors to alumni.
  • Promote collaboration between advancement, academics and student affairs. This ensures a unified message and maximizes the use of institutional resources. Engage students early in the idea of giving back. Encourage philanthropy through senior class campaigns, student giving days and educational initiatives about institutional funding.

Growing the Donor Pipeline

  • For long-term success you will need to build the pipeline of future donors and combat donor attrition. Concentrate on alumni, non-alumni, potential friends, businesses and foundations. Include donor acquisition in many forms and with many constituencies in your advancement plan.
  • Use committed donors to help identify and connect you with future donors. Implement fun and innovative strategies to gain prospective donors’ attention and gauge their interest. Beyond major gifts and events, use digital platforms like crowdfunding, social media campaigns and text-to-give tools to reach younger and tech-savvy audiences.

Utilizing Campaigns Strategically

  • Comprehensive fundraising campaigns are normal in higher education. You have ongoing annual giving and endowment programs, and most institutions roll these programs in with a major capital campaign for a comprehensive effort.
  • Adopt comprehensive fundraising strategies to engage a broader donor base and align stakeholders with the institution’s vision. Be sure that your campaign’s goals are integrated with the long-term institutional goals as outlined in the strategic plan and campus master plan. By continually communicating these priorities, donors will not be surprised when elements fall into a major campaign.
  • Many institutions are stretching the timeline of campaigns – some nearly a decade from study to completion. Over the past few decades, most campaigns have had five-to-seven-year horizons. Institutions can often raise more and build deeper relationships by lessening the duration of campaigns, focusing more on engagement and using smaller, targeted or phased campaigns between major comprehensive campaigns. Some institutions give the impression of being in a perennial major campaign.
  • We have seen remarkable success with campaigns using a two-to-three-year active solicitation timeline and a five-year pledge period. Be sure to have major gift efforts that you can focus on between major campaigns. At the same time, be aware of donors’ interests and receptivity and pace gift requests to align with their interests and your interest in a long-term relationship
  • A reliable campaign strategy and benefit is marshaling resources to build enthusiasm and focus for a specific time. Even at a major institution with significant resources, it is not easy to maintain volunteer, staff and donor enthusiasm for the duration of a campaign.
  • The essential research phase of a campaign planning study is as relevant as ever in major campaigns, and we have seen remarkable success in having college/program unit mini studies as a phase of a major campaign study. The added investment pays rich dividends, allowing you to have a more targeted strategy and increasing the effort’s success.
  • For all advancement programs, adhere to the highest standards of integrity in reporting.
  • When announcing campaign results, go beyond the headlines for transparency and give details. Do not be tempted to take shortcuts in reporting to achieve a campaign goal or gain “status” in a publication.

Reflecting Inclusiveness

  • Despite competing political narratives, inclusion remains paramount to higher education.

Leveraging Data, Technology and Systems

  • Technology provides cost-effective tools for engaging donors, tailoring cultivation, enhancing conversations and facilitating gift solicitation. Predictive analytics and AI can identify high-potential donors, while virtual platforms expand engagement opportunities for donors. Appeals can be personalized using insights from donor history, geography, academic major and areas of interest, with tools like virtual reality or 3D tours becoming standard for promoting major capital projects.
  • Every advancement program will benefit from leveraging data, technology and systems. Audit CRM and digital tools to ensure that they support personalization, predictive analytics and robust data management. Use analytics to identify trends, predict donor behavior and measure campaign impact.
  • Adopt AI tools to streamline prospect research, provide actionable donor insights and automate communication, improving efficiency and precision in targeting donors and alumni. Choose data-driven strategies to guide fundraising decisions and help assess and refine processes for greater impact. Enhance reporting capabilities for critical insights into fundraising performance and to tailoring of engagement approaches.

Developing a Relevant Case

  • Donors like projects that address key issues and bring together partnerships from across the campus and with other institutions and partners.
  • Institutions are attracting donors by linking campaigns to sustainability and social impact. This could ensure renewable energy and other programs that appeal to environmentally conscious donors. This reinforces the importance of having institutional values and priorities intersecting with those of donors and prospective donors.
  • Be sure that donors see their role in solving critical issues through your institution and that your case is compelling and relevant.

Engaging Key Constituencies

  • Successful institutions bolster their alumni relations programs and ensure they are integrated and coordinated with development and expanding outreach to other key constituencies. According to CASE, in 2022 alumni giving represented around 23% of total giving to higher education, giving from non-alumni individuals 16% and giving by organizations 61%.
  • This includes integrating alumni relations and career services, offering a life-long value to alumni and engaging alumni in mentoring roles with students. Continuing education programs can be successful in engaging alumni and non-alumni alike.

A Bright Future

Donors are critical to the success of higher education. While facing daunting challenges, there is great opportunity even in the challenges themselves. Many people are eager for 2025 to be quite different from the drama and tensions of 2024. Now is the time to express optimism about the future and eagerness for people to be part of a success story.