Whether they’re building new facilities or sending students on international trips, business schools have a constant need to raise dollar amounts both big and small. Here, administrators explain how they identified specific needs on their campuses and determined the best way to fund them, using diverse and creative strategies that offered new ways to connect with donors.
THE 24-HOUR CAMPAIGN
How can a school raise a large amount of money in a relatively short period of time, while engaging alumni and developing a fun, competitive spirit among donors?
Wake Forest University in Winston-Salem, North Carolina, decided to launch a hypercampaign in June 2013 when it realized there was a chance it wouldn’t make its annual fundraising goal by the end of its fiscal year. Administrators hoped the hypercampaign would raise about US$100,000 from roughly 500 donors—in 24 hours.
They set that dollar amount as their goal because, just six months previously, the university had received a $100,000 gift that it hadn’t yet announced. “We decided to make that a challenge grant, telling donors that we would get that $100,000 if we could raise the same amount from them,” says Mike Haggas, director of development for the Wake Forest School of Business. Administrators also decided that anyone who donated to the annual fund during this period would be counted in the hypercampaign totals.
The entire campaign was run online, with three exceptions: Wake Forest students conducted a telethon during the fundraising period; the school mailed out a postcard designed to hit mailboxes the Friday before the campaign started; and the school asked members of the advisory committee to talk about the campaign in advance. Everything else happened electronically. The school sent alumni a series of six timed emails, letting them know the campaign was coming up, reminding them when it started, and—during the actual day—keeping them apprised of how much money had been raised as the hours progressed.
In keeping with the nontraditional format of the campaign, the university took a nontraditional approach to marketing it. “Instead of using the school colors in our materials, we used fun images and unexpected analogies,” says Haggas. “To help people understand why they should donate to the unrestricted fund, we created a short video to explain how the money would be used. It was called, ‘What do zombies have to do with Wake Forest?’” (The video answered that question in its opening lines: “With the tenacity of a zombie and more mystery than a convenience store hotdog, the Wake Forest fund is much more than the postcards you can’t escape and the phone call you didn’t ask for.”) As excitement started to build, the school was able to roll out incentives. At noon, a donor said he would give $25,000 if the campaign netted 1,000 donors. Once that milestone was reached, the Alumni Council promised $25,000 if the school hit 1,500 donors. At the end of the day, the university had raised $350,000 through donations to the hypercampaign. Combined with the three challenge gifts, the total was $500,000.
Haggas says, “The video was embedded in the second email. It explained where the money goes—to things like salaries, technology, and toilet paper.” The video cost $15,000 to make, but it was so much fun that alumni quickly shared it over social media, and it received more than 10,000 page views.
In fact, social media became an important driver of donor engagement throughout the day, says Katie Neal, executive director of news and communication at the university. Because the event had been dubbed Wake500, a Twitter campaign sprang up around the hashtag #Wake500. Over the 24 hours of the campaign, says Neal, there were 298 tweets with that hashtag from 150 contributors who had a reach of 49,020 followers.
As excitement started to build, the school was able to roll out incentives. At noon, a donor said he would give $25,000 if the campaign netted 1,000 donors. Once that milestone was reached, the Alumni Council promised $25,000 if the school hit 1,500 donors. At the end of the day, the university had raised $350,000 through donations to the hypercampaign. Combined with the three challenge gifts, the total was $500,000.
The campaign reached an interesting mix of donors. “ One hundred and ten were new donors. Twenty-one percent were people who had given money the year before but not this year, which means the campaign brought people back into the fold. And about 17 percent had already made a gift, but they made another one because of the campaign,” Haggas notes. The average contribution was $200, compared to the school’s usual average of just under $100 per donor.
The money was definitely welcome, Haggas says, “but the real benefit was helping alums understand why their gifts are important.” At that time, Wake500 represented the single biggest day of gifts in Wake Forest’s history, and it kicked off a series of similar events. For instance, in 2014, the university held another 24-hour campaign with the goal of raising $500,000 from 2,000 participants. A group of donors offered a matching $500,000 gift if either goal was met. In what became known as Million-Dollar Day, Wake Forest surpassed both goals, raising a total of $1,007,081, including the matching gift, from 2,648 donors. Once again, social media was an essential component of the campaign, says Neal. The keys to success for a hypercampaign—or any nontraditional fundraising effort? Says Neal, “Keep it simple, keep it fresh, and reiterate the message throughout the day.” Haggas adds that a school shouldn’t run such campaigns too often, or they might condition donors to give only during those times. “Plus,” he adds, “if you do something like this too often, the shininess wears off.” To see the campaign video, visit www.youtube.com/watch?v=3SqT7p8lPHw.
WHAT'S IN A NAME?
Wake Forest University tried something a little different for its 2015 fundraising effort, launching a campaign called “Naming Rights for the Rest of Us.” Designed to engage people who don’t typically give to the annual fund—especially young alums—the campaign offered naming rights for “idiosyncratic objects or locations” that everyone in the Wake Forest community would recognize. These included a very loud leaf blower, a mysteriously flat speed bump, a seemingly useless metal rivet tucked in between cobblestones on the quad, and the directory for the bewilderingly laid out humanities building known as Tribble Hall. According to the campaign website, “Students have graduated in less time than it takes to find your way out of the Tribble maze, and from this day forward, wayward hallway travelers can thank Jenny Hutcherson as they stare blankly into a directory that offers no help.”
The directory and other campus objects now sport plaques thanking the donors. More important, gifts by all alumni to the Wake Forest Fund in February 2015 were 99 percent greater than in February 2014, according to Katie Neal. And because of the naming rights campaign, the fund took in more money from young alumni in February 2015 than in February 2014 and February 2013 combined.
SANTA CLARA UNIVERSITY GOES ALL IN
Like Wake Forest, Santa Clara University in California has successfully used flash campaigns to raise funds and connect with alums. Its second annual Day of Giving Challenge, held in March 2015, was called All in for SCU. The goal was to reach 4,000 donors in 24 hours in order to win a $500,000 challenge grant from anonymous alumni. That goal was reached before 7 p.m., and additional money came in through the night. Aside from the challenge gift, the largest donation was for $10,000. Overall, the campaign netted 50 percent more than the previous year’s event, and its total of 4,855 donors was a 63 percent increase over the previous year’s record of 2,973.
Donors were invited to give to the general Santa Clara Fund or to scholarships, programs, departments, and other areas that they cared about deeply—and the Leavey School of Business was among the beneficiaries. Specifically, the Leavey School raised $40,314, with the largest gift being $2,500. Business school alumni were also among the most active during campaign day—265 donated money, compared to 195 law school alumni and 76 engineering alums. The most popular causes for the university as a whole were the Santa Clara Fund, which received more than $200,000 from 1,537 gifts, and the Edward M. Dowd Art and Art History Building, which raised $511,560 from 132 gifts.
As with the Wake Forest event, social media played a big part in the campaign. During the day of the campaign, 40 different emails were sent to thousands of alumni and potential donors, but no individual received more than three emails. Participants also used Facebook and other social media sites to post information about their gifts, thank large donors, or urge classmates to give.
THE SOCIAL EXPERIMENT
How can a university teach a class on social media, give students practical experience at running a crowdfunding campaign, and raise money for specific projects, all at the same time? At Marquette University in Milwaukee, Wisconsin, these three goals are achieved through a semester long class called “Social Media Analytics and Measurement.” Taught by Tim Cigelske, director of social media for the university and adjunct professor in the Diederich College of Communication, the class includes a capstone project in which students organize crowdfunding campaigns for a variety of Marquette departments and professors managing initiatives that could use financial support.
Before the class starts, Cigelske works with Sara Harvey, senior director of annual campaigns in the Office of University Advancement, to pick eight or nine viable projects that range from sending business students on international trips to raising money for autism awareness. Once class is in session, teams of students are assigned to each project and tasked with creating a crowdfunding campaign to raise what is usually less than US$10,000. During the first half of the semester, students meet with their “clients,” perform analytics, devise a strategy, determine their financial goals, fine-tune their messaging, and decide their metrics.
About halfway through the semester, the campaigns go live on Indiegogo, a global online crowdfunding site. “We’d looked at vendors who offered customizable solutions, but we thought an established platform like Indiegogo was a better option, because it was a known entity with built-in credibility,” says Cigelske. He hosts a kickoff party to mark the big day. “It bridges the offline with the online and lets students know that it’s important to engage their audience in person,” he says.
While the campaigns are live, students constantly analyze what’s working and what isn’t. “Students ask themselves, is the strategy still sound? Should we be making adjustments? What’s resonating with donors?” says Cigelske. “That’s the nature of social media—you have to plan to be nimble.”
Students quickly learn that the key to finding donors is to identify the people who have some connection to their causes—usually the alumni of the program or the parents, roommates, and friends of current students. Because the campaigns aren’t raising money for Marquette University per se, the best prospects aren’t necessarily current donors, says Harvey. “But they’re engaged with the college in some way and have an interest in this particular area.”
One way to connect with donors is to offer incentives at a number of different funding levels. A donor who makes a small contribution might receive a grateful tweet from the project leader, while big spenders get bigger rewards. For instance, last year one popular campaign was for “Humanoid Robotics for Healthier Kids,” which needed money to send a robotics team to Brazil to participate in a Robocup tournament. Donors who gave $100 could take “robot selfies”—pictures of themselves with the robot—while those who gave $350 received their own miniature robot figures made from the same 3-D printers that created the robot.
Among the 2014 campaigns, one of the most successful was conducted on behalf of the Center for Real Estate at the College of Business Administration, which wanted to raise $6,300 to cover the cost of sending nine students to regional conferences. One creative perk at the $500 level—which was claimed by two donors—was the chance to be a featured roundtable speaker at the Real Estate Club’s “Real Estate Intro Night” event. But Cigelske emphasizes that, while such incentives can be useful, fundraisers also must provide updates, so donors can see how the campaign is going and where their money will be used.
Only three of the 2014 campaigns, including the one for the Center for Real Estate, met or surpassed their monetary goals.monetary goals. There’s usually an obvious use for any extra money. For instance, the Humanoid Robotics group raised $1,000 more than its target of $5,000, and the surplus went to defray additional trip costs. When another campaign exceeded its goal of raising scholarships to fund three service trips, the additional money was used to fund more scholarships.
Students quickly learn that the key to finding donors is to identify the people who have some connection to their causes.
Cigelske is quick to point out that students achieve learning objectives even when they don’t meet the financial goals of their crowdfunding campaigns: They get real-world experience, they learn how to use social media to raise awareness of a project, and they learn how to measure what approaches have been most successful.
“They also discover that it’s not necessarily a bad thing to set lower goals and then aim to surpass them,” says Cigelske. “Generally speaking, you’re supposed to reach 30 percent of your goal in the first 48 hours. If you don’t, you probably won’t meet your overall goal.”
Running a crowdfunding campaign as a classroom project can be an immense undertaking, Cigelske admits. In fact, he says, it would be difficult for a professor to handle all the details without the cooperation of a member of the advancement team. Cigelske works closely with Harvey throughout the process to make sure the perks are reasonable, donors are acknowledged correctly, and donated money gets to the right place.
But once a process is in place, crowdfunding can offer correspondingly huge payoffs. First, it raises money for worthwhile university projects that otherwise might struggle to find funding. Second, it gives students real-world experiences that look impressive on résumés. Third, it allows the university to develop relationships with “new, younger, socially connected audiences that might want to donate,” Cigelske says.
“Other schools might fear the lack of control or the possibility of cannibalizing the annual fund, because these are typically annual-fund-sized contributions,” says Harvey. “But for us, the upsides have outweighed any concerns we might have had at the beginning about crowdfunding.”
See details of all the campaigns at www.marquette.edu/crowdfunding.
How can a school fund an expansion of its campus and improve its overall quality without raising tuition? London Business School (LBS) plans to achieve this goal through a £100 million (about US$152 million) comprehensive campaign—the first one in its history.
Traditionally, notes dean Andrew Likierman, business schools outside the U.S. don’t rely on fundraising initiatives to generate capital. “Roughly speaking, half of our income is derived from degree students and half from executive education, and that will remain the primary way we finance ourselves,” he says.
But administrators decided to turn to fundraising to improve most facets of academic life at LBS: £40 million will go toward new facilities, £28 million to faculty, £18 million to scholarships, £10 million to unrestricted funds, and £4 million to new technology. “It’s tough to fund those things out of our current budget,” says Likierman. “Therefore, this campaign will enhance our ability to operate as a quality school.”
Launched in 2013, the campaign needed only two years to get to the £87 million mark and is likely to meet its goal well ahead of its five-year schedule. The school’s strategy has been to engage with all stakeholders—alumni, students, faculty, staff, friends of the school, and its governing body—and encourage them to get involved. Three approaches have been especially fruitful:
Making connections with individual donors. LBS received a lead gift of £25 million from the Idan and Batia Ofer Family Foundation specifically for renovating an iconic older building into a state-of-the-art facility to be known as the Sammy Ofer Centre. More recently, former Alibaba president Savio Kwan gave the school £5 million to support the Charles Handy Chair. To secure such large gifts, says Likierman, it’s key to understand what motivates each donor. “We’re respectful of the ways each individual wants to relate to the school,” he says. In these particular cases, both donors are alumni, have a long history of involvement with the school, and wished to acknowledge important men in their lives: Idan Ofer donated the money in the name of his father, while Kwan honored one of his former teachers.
Creating a community through a dedicated campaign website. The school’s comprehensive website not only shows donors the monthly progress of the campaign, but also gives them clear and powerful reasons they should make their own contributions by detailing how the money will be used. For instance, the site explains why the school wants additional money to fund faculty salaries. “There are 2,000 professors globally who are capable of meeting our stringent criteria. However, there are 10,000 jobs available to them,” it reads. “We need £28 million to attract and retain the most talented and inspiring business teaching and research minds to our faculty.”
Another page on the website allows individuals to post short messages about why they’ve chosen to give. A news page keeps donors updated on the campaign’s progress, and a “Donate today” tab makes it simple for anyone to participate. As of March, the site has logged more than 100,000 page views from about 25,000 unique visitors.
Generating excitement through class giving. While class giving has been in place at LBS for years, the £100 million campaign seems to have energized students and alumni. For instance, last year as part of its reunion celebration, the MBA class of 2004 raised £126,522 for the cause.
“The campaign has helped focus class giving because people can see what their money will fund,” says Likierman. “For example, a social space on campus was made possible by the 2007 class gift. Recent class gifts have gone toward our new building and a named lecture hall.”
Likierman predicts that other European schools also will begin to supplement their operating budgets with capital campaigns, especially as state funding diminishes and the pressure to compete increases. “My assumption is that other leading European business schools all wish to improve the quality of what they do, and fundraising is the logical way to do it,” he says.
But such a strategy must be approached with a great deal of forethought and preparation, he cautions. “You have to be very serious about it. We took time, trouble, and care to gear up and make sure we had the resources, information, and IT available, as well as the right people involved.”
For more details, see www.london.edu/thecampaign.
How can a school work with local corporations to create initiatives that don’t just involve financial support, but also offer meaningful opportunities for faculty to conduct research and for students to gain experience? At Singapore Management University, it’s all about building relationships.
“I don’t start from the perspective of generating massive endowments,” says Gerard George, dean of SMU’s Lee Kong Chian School of Business. “I start by asking, ‘What resources can the community provide that will then allow me to better serve the community? How can the university and the community deploy resources, offer more opportunities, and engage better?’ The money is a component, but what’s more important is that the student has the experience of engaging with the company.”
Thus, whenever he approaches corporations to propose a relationship, he always considers how he can both create and receive value from the collaboration. He believes it’s essential for the school to respond quickly to a company’s challenges.
“It’s very easy for universities to say to corporations, ‘Let’s do a project together!’” he notes. “But universities move slowly, so the project might not be addressed for six months, and by that time the problem is no longer important or it’s already been solved. So I organize the school so that our faculty can plug and play very easily.” In return, he also strives to have many dimensions where the corporations can plug in easily as well—through activities such as internships, consulting projects, and job opportunities.
The overall goal, he says, is to “make the boundaries of the university porous, so executives can flow in and faculty can flow out.” The result is a series of partnerships, projects, and research centers that bring the university much more than monetary support, including these initiatives:
Internship programs with MasterCard. The credit company offers between three and 11 internships every year to SMU students. Two of those internships come as part of a five-year old program in which high-achieving female students receive scholarships from MasterCard, as well as internships with the company—and often, if all goes well, job offers, too. “Women are underrepresented in the banking and financial services sector, and through this program MasterCard is making a conscious effort to develop more women executives,” says George.
The scholarships aren’t just about money, he adds; they serve as an entry point for getting the company more engaged with the school. He says, “I tell corporations, ‘It’s great if you can give scholarships that allow individuals to go to school. But it’s even better if you give me a way to integrate them into your company and make them useful for you.’”
The BNP Paribas–SMU Fellowship Award. This award was co-funded by SMU and BNP–Paribas, one of the largest banks in the world, for a total value of S$266,000 (about US$197,000). It is bestowed upon finance faculty members to support their research in finance and financial markets.
The UOB-SMU Asian Enterprise Institute. United Overseas Bank and Singapore’s Ministry of Education provided funding to launch the institute, which is dedicated to helping small- and medium-sized enterprises overcome specific challenges. The bank uses its connections to bring in SMEs looking for assistance, and each one is matched with an SMU student acting as a consultant.
“The SMEs might ask, ‘Can you figure out a market entry strategy for us? Can you design an HR system? Can you refresh my marketing campaign and my social media campaign?’” says George. The companies pay a small fee and students receive a small payment, but the benefits are far more than monetary, George emphasizes: The students gain real-world experience, while companies receive “very different, very practical insights from the students.” He estimates that students work on more than 200 SME projects a year.
The Sim Kee Boon Institute for Financial Economics. Designed to be a regional think tank devoted to financial markets, the institute was funded half by the Singapore government and half by private donors. It facilitates interdisciplinary research and education in financial markets, and faculty members have conducted research on topics as diverse as cryptocurrency and asset pricing. All of these examples illustrate George’s attitude about the reciprocal nature of corporate fundraising. He says, “If I take corporate money, I always want to know what benefit the company will get out of the relationship, whether it’s a talent benefit or a brand benefit or a transactional benefit. The more I put on the menu, the better off those relationships are. I am always thinking about relationships, value, and opportunities.”
At SMU, relationship-building continues even through initiatives that aren’t part of fundraising efforts. For instance, the Centre for Management Practice provides another way for the school to develop close connections with corporations. The center produces case studies about Asian business and facilitates knowledge exchanges between executives and academics in ways that make scholarly research more practical and relevant. That’s because it provides opportunities for executives to spend up to three months on campus—and when they return to their home companies, they take a faculty member with them.
While on campus, the executives attend faculty seminars and brown bag luncheons, sit in on classes, and become embedded in the SMU community. “We don’t close any doors,” says George. The executives also discuss with faculty the specific problems they’re trying to solve at their own companies and begin to jointly determine what challenges they might work on together. Each executive returns to the home company with a faculty member in tow—ensuring that SMU professors get a chance to work on real-world problems while also strengthening bonds between the school and the community.
Ask any dean what his or her biggest concern is today, and it’s likely to revolve around revenue—where it’s coming from, where it’s going, and how much is available. Tuition, the largest source of revenue for most business schools, has become especially problematic as increased government scrutiny and public pushback are limiting how much schools can rely on tuition increases.
But how much have business schools hiked their tuition rates over the last five years? From where do they draw the rest of their funding? The following data, based on responses to questions in the finances module of AACSB International’s Business School Questionnaire, provide a sense of how the money flows within business school programs.
> View the Full Size Infographic
THE ONE-TIME INVESTMENT
How can a school create activities that keep going strong even without another infusion of cash? Pace University’s Lubin School of Business in New York City maintains two very different initiatives that are each, in their own ways, self-sustaining.
The gift that keeps giving. For most schools, marketing is an ongoing expense, but the Lubin School has found a way to pay many of those costs out of a $1 million “revolving fund.” The money is a small portion of a $30 million endowment from Alfred Goldstein, a descendant of the school’s namesake. The donor agreed to let the school use the revolving fund to market itself as long as it repaid the fund every year with the money brought in through increases in enrollments. So far, the school has achieved this goal over three enrollment cycles.
This is the way it works: The Lubin School spends between $250,000 to $500,000 annually promoting specialty programs that the university doesn’t market separately. Any incremental gain in net tuition over the previous year goes to replenish that revolving fund up to its original $1 million. Says dean Neil Braun, “The number of incremental students necessary to break even is calculated by the total expenditure divided by our average net tuition per student.”
It’s key, therefore, to design an effective advertising plan. “Most of our money is spent in direct marketing,” says Braun. Working with a service provider, the school sends multiple tailored messages to prospective students; it also buys keywords to conduct pay-per-click campaigns that drive potential students and their parents to dedicated landing pages.
All of these efforts are tracked digitally. Less effective have been radio commercials and banner ads with click-through links, though Braun says the school will continue to test different marketing platforms and refine its message.
The critical component for the revolving fund is having a donor who believes in it, says Braun. “The key point from our donor’s point of view was that he was making an investment that would be self-sustaining,” he says. “He never would have given us the $1 million if we hadn’t worked out the mechanism for replenishment so the fund could be used over and over.”
The center that supports itself. Lubin’s Center for Global Governance, Reporting, and Regulation sponsors research and discussion on global financial reporting. It’s also the first center on the Pace campus that covers all of its expenses through specific programs.
The most profitable program is the one that provides regulatory certification via the Certified Compliance and Regulatory Professional (CCRP) designation, a joint venture between Lubin and the Association of International Bank Auditors. The school also offers customized “boot camps” and distance learning programs that can qualify for continuing professional education credits.
Braun notes that occasionally center initiatives need a “jump start,” and in those instances he can provide working capital from restricted funds. “But we always recoup those funds from the next revenue generated,” he adds.
What makes the center so adept at turning a profit? One compelling reason is that the executive director is paid out of the revenue that’s generated, so he must cover all costs before he receives compensation. In fact, that’s a strategy Braun would recommend to any administrator looking to turn specialized centers into self-sustaining entities.
Says Braun, “Find people who are passionate about creating the centers, give them strong personal financial incentives for generating revenue, put clear parameters in place up front, and put yourself in a position to have their hard work achieve your institutional goals.”
As educational costs rise and state funding shrinks, business schools will continue to look for creative ways to pay for their new buildings, their new and ongoing programs, and the experience of their incoming and current students. Whether administrators are running massive capital campaigns or small crowdfunding events, one thing is certain: They’ll need to continue to build close connections between their schools and their stakeholders so they can develop passionate supporters for their programs.