Higher Education Advancement and Strategic Growth

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</li> <li> <a href="/insights">Featured Insights</a> </li> </ol> </nav> </div> <div id="block-de-theme-content" class="block-de-theme-content block block-system block-system-main-block"> <div class="field field--name-field-resource-type field--type-entity-reference field--label-hidden field__item">Blog</div> <h1 class="js-quickedit-page-title page-title">  <span class="field field--name-title">Advancement and Strategic Growth</span> </h1> <article class="node node--type-resource node--view-mode-full"> <div class="node__content"> <div class="date-time-share-container"> <div class="field-group date-time-container"> <div class="field field--name-field-publication-date field--type-datetime field--label-hidden field__item"><time datetime="2024-09-27T12:00:00Z" class="datetime">September 27, 2024</time> </div> <div class="field-group time-taken"> <div content="3" class="field field--name-field-time-to-read field--type-integer field--label-hidden field__item">3 minute</div> <div class="field 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class="image-style-_-1-scale-and-crop-large" /> </div> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>In last month’s blog, we outlined <a href="https://www.kaufmanhall.com/insights/blog/laying-groundwork-strategic-growth">the imperative for strategic growth</a> as colleges and universities confront unfavorable demographic trends. As leadership prepares for growth and revenue diversification opportunities, the institution’s advancement office (i.e., fundraising and alumni relations) should be a primary focus.</p><p>This month, our colleague, Erik Kahill, will discuss how a well-functioning advancement office can not only provide significant new revenue streams to offset potential declines in tuition revenue, but also can provide critical support in aligning with and generating financial support for new strategic growth initiatives.</p><p>Advancement offices have undergone significant change in recent years. Data analytics have transformed advancement, enabling institutions to stratify prospect cohorts, shorten the relationship cycle, align advancement office staffing with the greatest areas of opportunity, and maximize the full gift potential of donors. Data analytics have also enabled institutions to better identify potential donors—both alumni and non-alumni—that might represent missed opportunities for the institution. While data-driven prospect identification and predictive gift modeling are being developed in-house at better-resourced institutions, advancement offices that lack these capabilities and skillsets can outsource model development to improve their own performance.</p><p>Advancement offices also have realized that shortening pledge cycles—moving, for example, from 5-year to 3-year pledges—can increase their pledge fulfillment rate. They have decreased their use of traditional call centers in favor of more sophisticated—and more effective—texting and social media strategies to engage alumni and other potential donors. They have embraced a new class of donors who look to make transformative, high-impact gifts—a development that aligns perfectly with the launch of a strategic growth campaign. And they have come to understand that relationship management of the most valued donors is a three-legged stool, with an institutional leader, advancement officer, and institutional volunteer (usually a board member) assigned to each significant relationship. Working together, this triad can ensure that there is continuous forward motion that leads to a long-standing and valuable association.</p><p>To fully capture the benefits of these changes in institutional advancement, leadership should focus on two questions. First, do we have the datasets and analytics needed to measure donor potential and engagement in an effective, useful way? And second, have we structured our advancement office in a way that best supports its productivity and effectiveness?</p><h2>Data analytics, donor potential, and donor engagement</h2><p>The ability to track donor engagement enables the advancement office to identify the highest-potential donors and the frequency and quality of their engagement with the institution.</p><p>Much of the data needed for these assessments is available within the institution itself. Isolating the characteristics of your most impactful and engaged donors requires an understanding of your internal datasets and how that data can be enriched with third-party datasets to improve relationships. These efforts can largely be accomplished with internal resources, leveraging the expertise of both the advancement operations and other capabilities at your institution, such as institutional research. The missing element for many advancement offices is the availability of data analytic models necessary to put this data to use to grow revenues.</p><p>Key insights that data analytic models can generate include:</p><ul><li><strong>Giving potential within donor gift bands.</strong> “Share of wallet” is an important metric, which can vary between donor gift bands (i.e., donor cohorts defined by their giving potential). Understanding how much the institution is capturing of the available funds within each gift band can identify opportunities for growth and investment. Focusing on the gift bands where an institution is exceeding or underperforming will allow for deeper analysis. That deeper analysis might lead to new donor strategies or operational developments that can improve the return on an institution’s investment.</li><li><strong>Engagement potential.</strong> Data on graduation year, degree, attendance at campus events, participation in speaking opportunities, enrollment of children or grandchildren, and/or past donations can identify prospective donors most receptive to your institution’s strategic priorities.</li><li><strong>Areas of donor interest.</strong> Attendance at athletics events, for example, can signify stronger attachment to the institution, while attendance at cultural or educational events can identify more focused areas of interest and provide actionable data for the institutional advancement office.</li></ul><p>These insights define the opportunities for the institution. Maximizing these opportunities depends on optimizing the productivity and effectiveness of the advancement office.</p><h2>Advancement office productivity and effectiveness</h2><p>Analytical modeling can identify gaps between current and optimal performance, as can benchmarking with peer organizations.</p><p> A few key performance indicators (KPIs) for advancement office productivity and effectiveness include:</p><ul><li>Total cash in per year</li><li>Total new pledges per year</li><li>Bequest intentions per year</li><li>Amount of giving per advancement office FTE</li><li>Amount of giving per enrolled student</li><li>Amount of giving per living alumnus</li></ul><p>These KPIs help measure the advancement office’s overall productivity and provide a transparent way to measure success across the institution.</p><p>Using these KPIs to measure the advancement office’s productivity (e.g., amount of giving per advancement office FTE) can help identify operational or structural issues that are impeding the advancement office’s success. The balance between advancement officers pursuing specific school or department opportunities vs. those pursuing centralized, institution-wide opportunities may be misaligned. Major gift officers may not be receiving the analytical or administrative support they need to free up their time to pursue donors. Alternatively, too many staff may be assigned to annual giving campaigns and not enough to major giving opportunities. The issue, in other words, may not be too many advancement office FTEs, but sub-optimal deployment or support of those FTEs to drive maximum effectiveness.</p><h2>Providing momentum to a strategic growth campaign</h2><p>Investments in the advancement office—especially those that enhance its data analytics capabilities and ensure that its staff are best positioned for success—can provide strong momentum to a strategic growth campaign. If the advancement office is better able to identify, cultivate, and secure donor gifts and pledges, the capital needed to fund strategic growth initiatives can be increased, and the speed at which the institution can pursue its strategic growth campaign accelerated.</p><p>A well-functioning advancement office should be viewed as a business unit within the institution, appropriately resourced—and held accountable—to achieve its goals. If these conditions are met, the advancement office can generate a significant margin to support an institution’s strategic transformation.</p></div> <div class="field field--name-field-topic field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/insights-all?sort=field_publication_date&order=desc&f%5B0%5D=topic%3A1211" hreflang="en">Blog: Sustaining Higher Education</a></div> <div class="field__item"><a href="/insights-all?sort=field_publication_date&order=desc&f%5B0%5D=topic%3A1176" hreflang="en">Higher Education</a></div> </div> <div class="field field--name-field-section-title field--type-string field--label-hidden field__item">More Higher Education Resources</div> <div class="field field--name-field-components field--type-entity-reference-revisions field--label-hidden field__items"> <div class="field__item"> <div class="paragraph paragraph--type--from-library paragraph--view-mode--component"> <div class="field field--name-paragraphs 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src="/sites/default/files/styles/16_9_scale_and_crop_medium/public/images/2024-06/strategic-fiancial-planning_thumb.jpg?h=b69e0e0e&itok=WJJcDlvS" width="900" height="506" alt="Strategic and Financial Planning" loading="lazy" class="image-style-_6-9-scale-and-crop-medium" /> </div> <div class="field--name-field-resource-type">Blog</div> <div class="content-wrapper"> <h2>Financial Literacy and Strategic Financial Planning</h2> <div class="field field--name-field-publication-date field--type-datetime field--label-hidden field__item"><time datetime="2024-06-28T12:00:00Z" class="datetime">June 28, 2024</time> </div> </div> </div> </a> </article> <article class="resoure-blog-type pathway-486 pathway node node--type-resource node--view-mode-component"> <a href="/insights/blog/how-promote-financial-literacy-within-your-institution"> <div class="node__content"> <div class="content-img"><img 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