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Major Gifts: A Strategy for Succeeding During Financial Crisis

Lucy Lewis, Sr. Associate Director of Principal Gifts, Yale University

Late fall 2008, our economy fell dramatically. The banking industry was "too big to fail." Many of our donors lost considerable wealth, while many held tight to what they had. Our institutions in higher education and independent schools, along with the other organizations in the non-profit sector felt the impact. Many of our presidents, heads of school, and other leaders advised us "keep close to your donors."

Four years later, where are we? What major trends do we see and what are the challenges we face? Starting in this issue of Bright Ideas, we will tackle this issue and hear from many of our colleagues in our profession. To begin the series, we invited Lucy Lewis at Yale University to share her thoughts on this very important topic.

Nobody escaped the financial crisis. It hit hard and over a prolonged period of time. Most institutions experienced a decline for two years in a row, with the decline in the second year generally much steeper than the first year. So, in order for Yale to meet the $3.5 billion goal of the Yale Tomorrow Campaign (which was increased from $3 billion in September 2008, by the way), a fresh strategy was essential, right?

Wrong! We never once wavered in our focus on the long-term strength of the University's relationships with its prospects and the programs that underpinned them. Not surprisingly, the success of the Campaign was determined by a relatively small number of donors. In fact, the 80/20 rule – and even the 95/5 one – was long gone. Fewer than one percent of campaign donors gave gifts totaling $3 billion, or 100 percent of the original campaign goal (77 percent of the revised goal of $3.5 billion).

As we reviewed these spectacular numbers in the final campaign analysis, what was immediately evident was that at the root of the tremendous success was the fact that every individual gift, across the board and regardless of level, had a story of a personalized and donor-focused approach. Yes, some gift closures took considerably longer than anticipated; others did not come to fruition during the Campaign. What was unwavering, though, was the approach of our vice president, Inge Reichenbach. Her commitment–indeed, her expectation–to ensuring that across the campus we "cultivate donors in a very personal and individualized way with a perspective toward developing life-long relationships rather than taking a more 'transactional' approach that focuses primarily on solicitations." Further, she observes, "By committing to the long-term strength of the prospect’s relationship with the University, we were able to protect future significant giving."

Now, in this post-Yale Tomorrow era, we have turned our focus to the opportunities that lie ahead – and we do so with our donor-centric strategy firmly and consistently in place. To meet the ever-pressing funding needs of the University, Inge has named six areas that are crucial for continued success:

  • Clear institutional fund raising priorities: An enhanced system has been created for the purpose of identifying programmatic initiatives and facilities needs across campus and reconciling them with Yale' standing fund raising priorities of building budget relieving endowment and unrestricted current resources.
  • Appropriate insittutional involvement: In order to maintain the average annual Campaign giving level, the University will direct energy and resources anew into identifying and cultivating new prospects. Yale’s major source of new prospects comes from an outstanding research department, and it is essential that its efforts are uninterrupted post-campaign. With a goal of adding up to 400 major gifts prospects, complementary activities include Reunion, industry, and geographic based volunteer screenings, including and especially international.
  • Means of compelling communication: Creating compelling communications for fundraising projects remains an ongoing priority. Major donor publications will be maintained post-Campaign and the website has been redesigned to reflect the ongoing and new fund raising priorities. A new data system will allow for an enhanced formalized stewardship program.
  • Sufficient budget and staff resources: Yale prides itself on spending 4 cents on every dollar raised. Particularly in a time of ongoing, University-wide budget cuts, careful attention is being paid to the limitations placed on new activities, programs, projects or support of expanded programs which are necessary to ensure the strength of individual giving results. Those institutions that are realizing increased financial return are those that have been able to maintain or increase the level of investment in development.

When the market crashed in 2008, we continued to hit the road to see our prospects. In the face of so much uncertainty, a demonstration of our unwavering interest was warmly received and unfailingly appreciated. Indeed, the seven years of the Yale Tomorrow Campaign showed that while external events like the global financial crisis can have a powerful effect on giving, staying the course is essential to success.

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