Tag Archives: endowment

Leadership and Fundraising: No Money No Mission

“…the true leader can be recognized because somehow or other his people consistently turn in superior performances…. A leader is great, not because of his or her power, but because of his or her ability to empower others.  Success without a successor is failure.”  This quote from Robert Townsend was used by Jeanette OBryant, Development Coordinator at the National Civil Rights Museum as she introduced her boss, outgoing museum president Beverly Robertson.

She concluded her remarks with Townsend’s words: “Loyalty to the leader reaches its highest peak when the follower has personally grown through the mentorship of the leader.  Why? Because you win people’s heart by helping them grow personally.”

These words capture the essence of Robertson. She has a strong respect for her staff and has provided them with opportunities to grow and assume leadership. And, she is leaving the museum in a strong position for her successor to build from.

The event we were attending was an intimate breakfast at the newly renovated museum that brought together former board members, volunteers, donors, supporters, staff and community members to hear Robertson’s reflections and tour the museum with her. She began by lifting up current and former staff, board members and volunteers – calling them by name and thanking them for their involvement. She made it clear that her tenure was rooted not the in the status that accompanies her position, but rather in her commitment to the museum and the legacy of Dr. Martin Luther King, Jr.

Here are qualities we observe in Robertson that contribute to her success as a fundraising leader. She makes everyone she comes in contact with feel good about their interactions with her and their support of the museum. She invites everyone to the table, while keeping her eye on the prize: raising money. She lifts up her staff, encourages them to move beyond what they perceive as their limitations, and provides opportunities for professional growth. She is a “we” not “me” person. Never once have we heard “I raised the money.” She is clear that fundraising is front and center for a nonprofit’s success. She summed it up with “No money, no mission” followed by a warm laugh that embraced the audience. In our words: you can have great ideas, but without money it is very difficult to bring them to life.

Robertson has served as president for 17 years, ending her tenure with the opening of the renovated museum and the beginnings of an endowment. She will be succeeded by Terri Lee Freeman, president of the Community Foundation for the National Capital Region, a public foundation serving the District of Columbia, suburban Maryland and northern Virginia.

We salute Beverly Robertson and we welcome Terri Lee Freeman.

Visit the National Civil Rights Museum in Memphis TN.  http://civilrightsmuseum.org/

Mel and Pearl Shaw are the authors of “Prerequisites for Fundraising Success” and “The Fundraiser’s Guide to Soliciting Gifts.” They provide fundraising counsel to nonprofits. Visit them at www.saadandshaw.com. Follow them on Twitter: @saadshaw.


Endowment: For Today or Tomorrow

Many of us have had to make hard decisions in order to survive these past five years. Some have had to take money from a retirement account to pay for daily living expenses, a decision with enormous repercussions. But, sometimes you have to make difficult decisions.

The same is true for non-profits. While fundraising is rebounding for many organizations across the country it is not rebounding for all. Many are still contemplating lay-offs and reductions in services, classes, programming and advocacy. Some with endowments or reserve funds are considering using those funds to cover operating expenses. Some who raised funds for a specific purpose are now considering using those funds for operations.

These are tough decisions and we have great empathy for those sitting on boards who are considering such “options.”

If you are in this situation, we offer a word of caution. Formal endowments can be board restricted. Before your board votes to change restrictions in order to allow the organization to access needed capital, think about what it took to build that endowment and how your actions may affect future endowment fundraising efforts. While your challenges are immediate, your constituents’ memories are long. Gifts to endowment typically represent the largest and most meaningful gift an individual will make. They are often made to secure an institution “in perpetuity.” If the endowment is “raided” now, how does a potential donor know her gift won’t face the same future?

Likewise, if you have a “reserve fund” consider what was communicated to donors when you asked for their help building this reserve.  Was it built for a time like today? If so, use it! If not, think about what it means to use funds for a purpose that is different from what you solicited them for. This is even more critical if your board is considering using funds raised for a building, or new initiative to pay for operations. The betrayal of trust can last for years and may take more effort than your current or future boards will ever have.

If you want to avoid this situation, we offer a word of encouragement. Do what you can to meet your operating costs and simultaneously create an organization-wide culture of fundraising. Engage your board in giving and asking others to give. Diversify your fundraising, thank your donors, and engage leadership-level volunteers. Cultivate current and prospective donors long before you ask for a gift, and long after you receive one. Employ the prerequisites for fundraising success. If you don’t know what these are, write to us at news@saadandshaw.com and we will send you a list to focus your work.

If you can, avoid decisions that provide short term gain and long term pain.

Yes We Can – Building HBCU Endowments

Dr. John Berry

Dr. John Berry

Endowments are an important component of institutional stability and sustainability. They are a way to help address future needs and to leverage fundraising now and in the future. The growth of endowments at all colleges and universities has come under increasing scrutiny as those institutions with meaningful endowments examine their investment policies, and those with small or developing endowments look at how to grow theirs.

We asked Dr. John Berry to provide his insights in this guest blog. Dr. Berry’s dissertation focused on effective fund raising operations for endowment development.  Let us know your thoughts.

It’s safe to write that these are times in which greatness comes to the fore, as development professionals manage to make a way out of no way. It seems that all around us the fund raising landscape looks extremely bleak.

If you work in higher education in this country, these are challenging times.  Large, midsized, and small colleges and universities are struggling with the reality of shrinking lines of credit or perhaps no line of credit at all. This situation has the potential to cause a catastrophic system failure for numerous colleges and universities, which is an unimaginable scenario.

At the Historically Black University where I am employed, my weekly directors’ meetings have become dire, to say the least. It’s clear from all of the power centers within the university that this institution is experiencing the onset of a massive reduction in its operational budget, stemming from the extremely poor condition of the national economy. The briefing that I’ve received is sobering.

But the circumstances surrounding my institution are not isolated. This university is not the exception but rather the rule, as its leadership grapples with the very difficult decisions of scaling down programs, disciplines,  and the very heart of any college or university—its faculty and staff.

The drastic funding concerns of higher education nationwide are simple and yet complex in their formulation. Historically, the primary resource formula is based on a college’s or university’s projected student recruitment. The more students successfully enrolled, the more tuition fees paid by Pell grants, along with scholarships, fellowships, and students loans to supplement financial aid packages. These are the power centers/funding streams of colleges and universities’ chief financial officers.

The present economic climate of institutions indicates that students from low-income households or those facing the loss of parental employment and federal grants no longer will no longer be able to cover the full cost of tuition. These students often must defer their dreams of pursing a college degree.  In the past, a viable option for a family’s tuition shortfall was applying for a private-sector student loan which generally supplements an existing federal grant thereby resulting in a zero balance with a college or university for the academic year.

At public universities such as mine, we have seen our state economy drop. Therefore state tax revenue has dropped, meaning massive operational budget cuts along with the act of reverting existing allocated funds back to the state’s treasury.

The question then becomes, what are the options for small to midsized schools like those within the HBCU sector? As a professional development officer/fundraiser at an HBCU, I have—along with many of my colleagues at other HBCUs—seen the handwriting on the wall. But I have been for the most part unable to build up counter measures to address difficult times such as this unprecedented economic downturn. All but a very few colleges and universities, if called upon to do, so could fully cover their annual operating budgets by drawing on the school’s private reserves resources. The critical aspect to this sustainability function is that the larger a college or university endowment, the more options an institution’s leadership has to ward off periodic economic downturns.

The fundamental question for higher education leadership of small and midsized colleges and universities must be “what is the annual yield of primarily unrestricted funds coming from their respective institutions’ endowment portfolios?’ The pure income from a college- or university-invested endowment has become of the utmost importance to chief financial officers. The leadership at HBCUs will be called upon to aggressively manage these funds for maximum growth toward annual income yield.

The Challenges for Leadership
Given the grim economic prognosis for the United States—perhaps for the next few years—nationally, higher education will be called upon to do more with less government-allocated and philanthropic resources. However, the reality is that colleges and universities with larger endowments portfolios will probably fare better than those that do not. The late Dr. Benjamin E. Mays, former president of Morehouse College in Atlanta, Georgia, said once in an affirming speech to “always think big.” This should be the rallying cry for 21st century HBCU sector leadership.

The Nobel Laureate and Yale economist James Tobin said in regard to higher education leadership and endowment management responsibility in 1974, “The trustees of endowed institutions are the guardians of the future against the claims of the present. It is their task to preserve equity among generations.”

The challenge in the early part of the 21st century is daunting for most institutions of higher education, but one could argue even more so for the HBCU sector and these institutions fund raising officers.  However, if history does nothing else in this kind of situation, it can provide a road map from which a plan of action can be developed and implemented to achieve a new desired outcome. Case in point:  Dr. Mary McLeod-Bethune, founder and president of the college which bears her worthy name, started that institution with $2.50. However when Dr. Bethune stepped down as president of the college, it had a $2 million endowment. As noted in her biography, Dr. Bethune herself cooked and sold fried-fish sandwiches to enhance the schools fund raising efforts. A word to the wise is sufficient: We are able.

John M. Berry
Chief Development Officer
South Carolina State University Student Affairs