Philanthropy key to fixing higher education

By Todd Cohen

Colleges and universities need to practice what they preach and claim to teach about the importance of preparing their students for a fiercely competitive global marketplace and information economy.

Bloated from fat times with a sense of entitlement, higher education is failing its customers, now that times have grown lean, by pampering and pandering to students while shamelessly chasing magazine rankings.

Administrators at colleges and universities pay lip service to innovation and change but seem incapable of making more than cosmetic touch-ups to their business model.

Holding that business model hostage are faculty who are hooked on a tenure system that enables them in resisting even the hint of change.

That business model also is held prey by an institutional culture of bureaucracy that is deeply entrenched and disturbingly insulated from the grim forces of today’s real-world marketplace.

The job of breaking up the massive gridlock that higher education has become ultimately may fall to its fundraisers and donors, players who actually can make a difference because they deal in a currency that carries a lot more weight than empty talk about change, innovation and engagement.

Two recent articles in The New York Times cast a harsh light on higher education’s flaws and failures.

In a May 14 opinion column, Richard Arum of New York University and Josipa Roksa of the University of Virginia, authors of “Academically Adrift: Limited Learning on College Campuses,” say students are breezing through college without breaking a sweat, cracking open many books or improving their skills and smarts.

Because many schools count on students to evaluate teachers and courses, the article says, good assessments go to easy teachers, while those who actually enforce rigor are seeing declines in enrollment.

And because resources typically are based on enrollment, rigorous classes and programs are likely to be cancelled or shrunk.

Trustees, meanwhile, obsess over institutional rankings and fiscal concerns, and schools invest their big bucks into fancy facilities.

Where does that leave students?

The Times reported on May 18 that students with new college degrees are stumbling in today’s dismal marketplace.

“Employment rates for new college graduates have fallen sharply in the last two years, as have starting salaries for those who can find work,” the Times reported. “What’s more, only half of the jobs landed by these new graduates even require a college degree, reviving debates about whether higher education is ‘worth it’ after all.”

College and university administrators talk a lot about the need for innovation, entrepreneurialism, risk-taking, collaboration and community “engagement.”

In practice, however, they are cautious and timid, panicked by budget cuts yet still cowed by faculty for whom brutal competition in the collapsed economy is little more than something to study, measure and write about.

Fundraisers at colleges and universities can play a critical role in rescuing their institutions from their alternative universe and getting them back on track in the real world.

To do their job, fundraisers must understand the needs both of their institutions and their donors, and broker gifts that will address those needs while building relationships between the institutions and donors that will prosper and endure.

While some donors inherited their wealth, others built it by creating enterprises that succeeded because they met real needs in the marketplace and delivered services their customers wanted and valued.

Savvy development officers ought to be able to help donors see the value of investing in programs and initiatives to help colleges and universities adapt to and prepare students to cope with marketplace realities.

The 17-campus University of North Carolina system, for example, just has been awarded $3 million over three years by the Oak Foundation in Geneva, Switzerland, to better address the needs of students who, while capable of successful college attendance and graduation, still struggle because they learn differently than other students.

The program, which UNC hopes to expand, initially will take effect at three of its campuses to support needs of students with “learning differences,” as well as the instructional-development needs of the faculty who teach them.

Despite its serious shortcomings, higher education in the U.S. remains the envy of the world, but U.S. competitiveness increasingly will depend on colleges and universities that can adapt to changing times, produce graduates who can cope with the demands of a complex world, and offer programs and services to address urgent social and global needs in the communities the schools serve.

Fundraisers and donors can and must serve as change agents to help colleges and universities adapt their business to a marketplace that demands innovation, not just in theory but in practice.

Community key to fundraising

By Todd Cohen

Giving is all about community.

Americans give money, volunteer and serve on boards mainly because they want to help make their communities better places to live and work.

But fundraising, the flip side of giving, is not always about community: When they ask prospective donors for money, far too many nonprofit staff and volunteer leaders focus on fundraising techniques and the needs of the nonprofit and, sometimes, of the donor, rather than on the needs of the community.

That needs to change if nonprofits expect to do a better job raising money so their organizations can better serve people and places in need.

That is the message of Karla Williams, a national fundraising consultant based in Charlotte, N.C., where she is a key adviser to United Way of Central Carolinas in its effort to transform its organizational culture in the wake of a scandal over its ousted CEO’s compensation.

She also is director of the Leadership Gift School at the Institute for Philanthropic Leadership, a local effort in Charlotte to strengthen the work of local nonprofit leaders and fundraisers.

Williams says nonprofits that want to be more effective fundraisers first must build a culture of philanthropy at their organizations.

That is hard work: It requires, first, that a nonprofit’s staff and board understand the history and role of philanthropy, as well as fundraising tools and strategies, and how and when to use them.

It also requires truly getting to know donors and helping them understand the community and the role their gift can play in helping the nonprofit address urgent community problems.

It is “imperative,” Williams says, that nonprofits “understand how much work it takes to be deliberate in our creating a sense of philanthropy” that will help build a sense of community.

She cites a 2000 study of 40 U.S. communities that found Americans do a great job volunteering and giving to charity, mainly through religious congregations, but take few chances, stick to their own kind and are divided by race and class.

In short, our communities are low on “social capital,” or the social connections or civic glue critical to hold communities together and help them thrive.

Led by Robert Putnam of Harvard University in partnership with local community foundations and private foundations, the study prompted many funders to launch efforts to strengthen social capital in their communities.

Some of those efforts have created safer, more vibrant neighborhoods; helped residents and businesses get more engaged in civic life and affairs; and built closer connections among people from different backgrounds and walks of life who previously did not come into contact with or even know one another.

Others have taken on some of the most urgent and complicated needs in their communities, such as improving dismal high-school graduation rates or better serving vulnerable people like the homeless.

By creating a culture of philanthropy that connects their organizations and the people who support them with the larger community, nonprofits can help strengthen the community’s social capital.

Greater social capital, in turn, can make fundraising more effective and generate more philanthropy.

So fundraising and giving both become more strategic and meaningful and have a greater impact because people who are connected to one another and to their community have a more intimate understanding of common problems and want to be involved in helping to fix them.

Instead of treating fundraising as a “mechanical” process, and treating donors as if they were automated teller machines, Williams says, nonprofits can raise a lot more money and use it more strategically and effectively by spending the time to get to know donors, and helping them see the connection between their values, the causes they care about, the impact they want to have, and the difference they can make in healing and repairing their communities.

Giving is indeed about community.

By making sure their organizations and their donors understand the meaning, value, role and methods of philanthropy, and the needs of their communities, Williams says, giving and its impact will grow.

“The notion of connectivity,” Williams says, “is a critical measure of whether we’re doing a good job.”

Boards missing in action on fundraising

By Todd Cohen

Nonprofits need to do a better job asking their boards to ask for money and, equally if not more important, helping them understand that effective fundraising depends on building a culture of philanthropy at their organization that connects their mission to the needs of the community.

The fact that boards are missing in action on what should be one of their core responsibilities is one of the worst-kept secrets in the nonprofit world.

But two new reports suggest a big part of the problem lies with nonprofits’ failure to engage their boards in fundraising.

According to an informal online poll by the Association of Fundraising Professionals, or AFP, that got 838 responses, the part of their job that gives fundraisers the most anxiety is trying to get their board involved in fundraising.

“Board members play an important role in fundraising because they are greater spokespersons for the charity they serve and they can speak with authority on the impact of the organization,” Andrew Watt, AFP president and CEO, says in a statement.

“However, many board members focus more on the fiscal management and operations aspects of their responsibilities,” he says, “and it can be challenging for fundraisers to get them involved in raising money.”

That sounds like denial: A central requirement for joining a board should be a commitment to help raise money, and a core job for nonprofit staff should be to make sure their boards are asking for money.

Indeed, any board member who fails to get involved in fundraising or claims he or she does not know fundraising is expected of board members must be living on another planet and has no business being on a board.

A separate survey by Cygnus Applied Research, the consulting firm headed by fundraiser Penelope Burk, finds that, while donors say “being asked by a leadership volunteer” is what influences them more than anything else to give, and to give generously, nonprofits are doing a poor job preparing their boards to help raise money.

Among nearly 3,500 donors surveyed who were current or recent board members – part of a much larger online questionnaire to which over 22,000 North American donors responded -- only one in three said their nonprofits required all board members to help raise money, only 39 percent received any kind of fundraising training, only 6 percent said their nonprofits had a budget to train board members, and only 18 percent said their boards evaluate their fundraising performance.

The survey attributes some of the difficulties boards experience to nonprofits’ nominating committees “that do not function year-round or have loose or vague requirements of candidates regarding fundraising.”

For those and other reasons, the survey says, fundraisers are “leaving money on the table.”

Crushed by the damaged economy and the surge in demand for services it has fueled, nonprofits are struggling to continue to serve clients and keep their doors open and lights on.

So they should use every resource they can find to generate the support they need, and boards should be one of a nonprofit’s best fundraising resources.

Effective fundraising, however, requires not just knowing and using the techniques of asking, but also understanding and helping donors see the connection between the mission of the organization and the needs of the community.

If nonprofits fail to build a culture of philanthropy and make sure their boards ask for money, and if boards fail to understand the value and role of philanthropy, and to ask for support, they will be asking for failure and will have no one to blame but themselves if their organizations fail to survive.

Charitable value must be earned

By Todd Cohen

Many charities seem to operate with a split personality.

In working to serve people and places in need, nonprofits and philanthropic organizations are hard-working, resourceful heroes in our communities.

But in assuming their good work entitles them to special treatment, and whining when they do not get what they want, too many nonprofits and foundations seem spoiled and smug.

Make no mistake: The charitable marketplace is a treasure of our democracy, addressing the symptoms and causes of our most urgent social and global problems, and independently taking on the tough jobs that government and business either cannot or will not handle.

But many nonprofits and foundations, and the trade groups that represent them, apparently infected with the increasingly toxic mindset that pollutes much of our culture, also are quick to blame others for the organizational challenges they face, and to stamp their feet when they don’t get their way.

Instead of pouting and pointing fingers, nonprofits and foundations should do what they do best, which is to build strong organizations that can sustain themselves in helping the communities they serve improve themselves.

Consider the recent report by the Johns Hopkins Listening Post Project that says local governments in recent years, with little public attention, have burdened a lot of nonprofits with taxes and fees, and now are planning hikes that could damage nonprofits and local governments alike.

Nonprofits and foundations receive special tax treatment because lawmakers in the past concluded their work provides an important service to the public.

But that special treatment is a gift based on a policy decision, not a constitutional or innate right, and nonprofits and foundations must continue to earn the tax and regulatory privileges they enjoy.

Nonprofits, for example, consume local services like water, roads, and police and fire protection, yet they seem to believe their charitable mission should free them from paying their fair share of the cost to a community of those services.

But are nonprofits prepared to make the case, complete with metrics, that the value they provide to the community, based on a calculation that accounts both for their impact and their cost of doing business, justifies the taxpayer investment the community makes in them?

That can be a tough case to make, and some nonprofits act as if it is beneath them to have to make it.

What is more, some nonprofits – all along the spectrum of ideological orientation -- are quick to complain about special spending or tax breaks for wealthy people, corporations, special-interest groups or vulnerable social groups.

And organized philanthropy, which collectively controls over half-a-trillion dollars in invested assets, screams bloody murder any time a lawmaker suggests private foundations should have to pay out more than the currently-required 5 percent of their assets each year in grants and overhead expenses.

But why should wealthy donors get up-front tax breaks for parking their fortunes in charitable foundations, which then get to invest that wealth and enjoy the power it gives them, while hoarding most of the funds even though their tax-exemption is based on the expectation the funds will be used to address social needs?

Like any other organization, interest group or individual, nonprofits and foundations can and do make the case for tax breaks and other public policies they believe will support the common good.

Instead of just moaning about not getting what they assume they are owed, however, nonprofits should make a clear and compelling case about the value they add to their communities in return for the taxpayer investment they believe they should get.

Equally important, if not more so, nonprofits and foundations should make sure their own houses are in order and that they truly are adding to their communities the value they claim to be adding and in return for which they received their tax-exempt status in the first place.

A wake-up call for nonprofits

By Todd Cohen

Nonprofits no longer can afford not to get their act together quickly.

The violation of the U.S. economy by a greedy gang of financial-services and housing-industry thugs has brutalized nonprofits and the people and places in need they serve.

And as a continuing series of surveys and reports shows, nonprofits themselves are strained to the breaking point by the economic crisis, squeezed between rising demand for services and tighter sources of revenue, particularly from government grants, contracts and fees for services.

The result is grim indeed: The most vulnerable among us are hurting and at risk of even greater pain, and many of the nonprofits that exist to serve them are at risk of shutting down.

Elected officials, lawmakers and politicians, always quick to pander to voters, are looking for ways to cut funding to safety-net social programs and to boost taxes and other fees to nonprofits.

Consider a handful of recent surveys.

An online survey by Mary Kay of 672 domestic-violence shelter across the U.S. found domestic violence had grown for the third straight year, with three of four shelters attributing the increase to financial issues, while abuse is more severe, children are significantly affected, shelters are reducing services and eliminating staff positions, and government cutbacks are hurting shelters’ ability to help survivors.

And a survey by the Johns Hopkins Listening Post Project says local governments have imposed taxes and fees on a big share of nonprofits in recent years, and now are planning for increases that could hurt nonprofits and local governments alike.

But a third survey, commissioned by child-advocacy group First Focus, shows that Americans are not as dumb as government officials and politicians seem to think they are.

According to the phone survey of over 1,000 likely 2012 voters, 58 percent of voters believe the lives of children in America have gotten worse in the last 10 years, and children’s programs are most important to voters relative to other programs facing potential government funding cuts.

In the trenches of America, nonprofits are struggling to reinvent themselves, address their communities’ urgent needs and cope with politicians on the make for votes with ham-fisted tax cuts.

The huge challenge for nonprofits is stick to their mission, create an organizational culture that values and embraces the connection between their mission and the larger needs of the community, and help prospective donors see the critical link between the causes they care about, the mission of the organization and the needs of the community.

While it is hard enough for them these days to deliver their services and pay their bills, nonprofits also need to be taking on the fundamental task of remaking themselves to survive and thrive in a radically different, rapidly changing marketplace.