This past summer, President Craig Williford and the board of trustees of Denver (Colorado) Seminary asked Vice President for Advancement Gary Hoag to take a look at the fundraising programs of selected evangelical seminaries and report back to them on his findings. He invited development staff at ten seminaries to participate in the study. Eight responded in the affirmative.

The purpose of the peer comparison study was mutual encouragement, or as Hoag puts it, "to sharpen one another." He was hopeful that "by participating in the study, each seminary — the board, president, and development staff — would find assistance as needed by discussing findings of the report with leaders at other institutions." That hope also informed the participants' willingness to share with In Trust readers from what they've learned.

Beginning Observations

For the most part, the theological schools included in Hoag's study experienced strong giving in the four-year period of FY01 to FY04, in some cases buoyed by significant grant dollars, and in other places spurred on by campaign efforts. However, when it came to the schools' annual funds, several had a harder go of it, posting less in unrestricted gifts in FY04 than was received in FY01. This finding mirrors what fundraising consultants and others who track giving patterns in the U.S. and Canada have reported: donors, and most especially individuals who are capable of making major gifts, are trending toward designated or restricted giving.

That said, when the case is strong and enough contacts are made, Hoag notes, donors still do give in support of current operations. This was demonstrated by the 19.6 percent increase in unrestricted gifts to the eight schools as a group during the four-year period.

Focus on Individuals

Within the eight-school study, the leading source of gifts was individuals, with friends and alumni/ae leading the way in total dollars received and in the number of donors.

In light of this finding, Hoag encourages institutional leaders to make new donor acquisition and attrition management a priority in their planning. "If the size of the average gift increased during the year, instead of immediately assuming this is good news, board members should ask if the increase came because total giving was up, or if donor attrition meant fewer individuals were carrying a heavier load," he advises.

Given the importance of individual donors to the success of the advancement programs, Hoag was surprised by how little attention is paid to prospect research. "Careful research enables a staff to prioritize their time by identifying individuals who may have a greater propensity and capacity to give," he explains. Within his study, the seminary posting the lowest cost per dollar raised was the one where staff had made prospect research a priority.

The significant role of volunteers in successful fundraising programs was another finding of note. Within the eight-school study, the seminary reporting the highest level of volunteer involvement also recorded the most donors and the most attendees at cultivation events. "All of our schools could benefit from the synergy that follows when volunteers get involved and help increase the impact of our programs," Hoag states.

Giving Closest to Home

Gifts from board members are especially important for freestanding seminaries, so it was good news that all eight boards posted at least 50 percent board participation in the annual giving program. At two schools, 100 percent of board members made a gift to the seminary in FY04. Interestingly, the seminary reporting the second lowest giving percentage by its board members booked $2,774,000 in trustee gifts — the second highest amount for a board among the eight schools. That exception aside, Hoag's look at seminary development programs reinforced the importance of board participation as an encourager to generous giving by other donors.

As for faculty and staff giving, the numbers were not quite as robust (except for one of the seminaries), but this is not unusual for theological schools. The track record of employees as donors to the eight schools ranged from 21 percent to the amazing high of 100 percent, with a median participation score of 30.5 percent.

Giving by alumni is another area where Hoag believes theological schools have room for growth. With just one of the eight schools posting an alumni participation rate of more than 30 percent, and alumni participation at most of the others hovering around 20 percent, he suggests that "there's obvious potential within this key sector. This may not be the place to look for big money, but strong participation by alumni/ae sends a positive message to other donors."

Spend It to Raise It

Advancement spending generally falls into two basic categories: stuff and staff, and for the eight schools, expenditures were divided fairly evenly between the two purposes. The cost of raising a dollar — total advancement expenses (personnel plus non-personnel) divided by total raised (restricted and unrestricted) — ranged from a low of 11.4 cents to a high of 25.1 cents, with a median cost of 21.8 cents on the dollar.

As for number of staff (professional and support) in the development offices, the numbers ran from five to thirty-one, with most employing seven or so staff. And while more people in the development office usually results in more money raised by that office, the study showed that fundraising costs are also much higher comparatively. In short, additional gifts appear to be coming at a greater expense.

Keeping in Touch

Hoag found that the seminaries that mail frequently to constituents have a wider donor base than those that don't. And at the school where the usual approach to direct mail was replaced by personalized, hand-signed letters from the president, the donor base grew by the highest percentage over the same timeframe.

Hoag's study also suggested that institutions can probably make better use of donor contact management systems to track the number of calls made by the president, development staff, and board members. "Keeping better records should make us more efficient and effective," Hoag notes.

A Study of Your Own

The Institutional Peer Profile Report (IPPR) which the Association of Theological Schools compiles annually for each of its member schools provides presidents, board members, and development staff with ready access to most of the comparative information included in Hoag's eight-school study. From there, it is not hard to round out the research project with questions addressing specific institutional challenges.

Categories of Comparison

Participants in the comparison study of fundraising programs at selected evangelical seminaries provided information in each of the following areas:

 Frequency of direct mail appeals, donor calls, foundation proposals sent/granted
 Total giving by designation and source
 Advancement budget for personnel and non-personnel expenses
 Number of constituents receiving the seminary magazine
 Number of prospects researched
 Number of donors, new donors, board/faculty/staff participation percentage
 Number of estate planning events, legacy society membership, bequest giving total
 Staff size and number of active advancement volunteers
→ Total alumni giving, alumni giving percentage
 Point-of-entry activities and total number of attendees

Read the other articles in the New Year 2005 fundraising series:

Make this the year
More than a lovely dream 
Some short thoughts on long term financial security

Top Topics
Roles & Responsibilities
Board Essentials

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