How theological schools should raise money
A new report by researchers at Auburn Theological Seminary offers guidance for seminaries trying to raise money in tough times. The data, though derived from theological schools, has implications for nonprofits as well.
December 8, 2009 | Leaders at theological schools should base fundraising goals on how much money they can realistically raise, not the amount they actually need, according to a new report by the Center for the Study of Theological Education at Auburn Theological Seminary.
The report, called “Great Expectations: Fund-raising Prospects for Theological Schools,” analyzed the fundraising history of institutions reporting to The Association of Theological Schools as well as case studies of 10 seminaries.
Researchers found most seminaries collected in special campaigns less than 2.5 times their “normal” amount of giving. The report also found successful fundraising efforts require the participation of the institution’s president -- some advise half a president’s time should be devoted to development activities.
“You can’t solve the big financial problems of an organization by just stating a very high goal for increased gift receipts and then going out and getting it,” said Barbara G. Wheeler, director of the center, which crunched a decade’s data from theological schools, comparing giving for operations from 1998 to 2002 with that of 2003 to 2007.
“We’ve seen too many institutions addressing their funding problems by setting financial goals that are unrealistic,” she said. “They said, ‘A campaign will save us.’ They’re losing time, and while they are doing that, they’re getting in worse trouble.”
The report recommends a different approach: Effective fund-raising requires a strategically derived goal quarterbacked by a committed president who, along with a financially invested board, nurtures current and potential donor relationships.
“Before you stake your future on greatly increased giving from sources that are pretty hard to develop, you’d better look back at your experience and at other institutions like you and make sure those kinds of fundraising goals are achievable,” Wheeler said.
The report examined the unique challenges of seminary fundraising: They are smaller, with lower visibility and fewer alumni than their college and university counterparts. Their religious affiliation also makes them less attractive for direct corporate support, and their endowments have shrunk along with Wall Street’s fortunes. And while they do often have denominational support, that funding is waning, putting the focus on individual givers.
“Neither graduates nor congregations, however, directly generate most of the major gifts on which schools rely for their future,” according to the study.
Individual donors who have the means to make substantial gifts are not the people who receive theological education directly.
“Unlike colleges, unlike medical schools, law schools, and business schools, the average seminary graduate is not at the high end of anybody’s pay scale,” Wheeler said.
Although the report’s focus is theological schools, nonprofits of all kinds could learn from its findings.
“[They] should pay special attention to what we’ve found out about seminaries,” said Anthony T. Ruger, senior research fellow at the center, because “Great Expectations” is applicable to other nonprofits or organizations interested in and dependent on donors.
That includes faith-based nonprofits, which have mushroomed in recent years.
“More and more people see a niche for a need, and they start a nonprofit to address that,” said William G. Enright, executive director of the Lake Institute on Faith & Giving at the Center on Philanthropy at Indiana University. In 1900, there were 28 faith-based nonprofits. By 1950 there were 178. In 1970, there were 351, and in 2001 there were 575, said Enright, quoting data from a Princeton University sociologist.
“The explosion of nonprofits is so significant. There’s intense competition for the donor dollar,” he said. The good news is half of all U.S. residents give to religious organizations -- even more than that when religiously based hospitals and schools are included, according to the report.
Other nonprofits also can learn from seminaries how to expand their reach. In recent years, theological schools have established extension centers and computer learning, Ruger said.
“What they have done is also another recommendation for nonprofits: Find other ways to adapt your services and mission, new ways to expand, new markets, if you will,” he said. Many schools also are grappling with cost-cutting as they consider discontinuing programs, forging new partnerships and even trimming faculty and staff.
“But there’s also [the question]: What do we do that’s of interest to and of value to others? Is there a way to expand our programs to attract new constituents, new clients?” Ruger said.
Strong leadership is crucial. Among the “Great Expectations” case studies, “no fund-raising efforts succeeded without the focused, regular, and enthusiastic leadership of the institution’s chief executive,” according to the report.
But for some seminary presidents, many of whom have ascended to the post from careers in academia, the chief fundraiser hat is ill-fitting. While one-third of the report’s respondents admitting having “no confidence” in this area, the report said, “Veteran successful presidents affirm that half of a president’s time should go to cultivation of donors and other development activities.”
That “is a kind of ‘Aha!’ or ‘Gee, I didn’t know that!’ moment for many presidents,” Ruger said.