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Colleges Could See Decline in Number of Large Gifts, Experts Say

The Foundation Center

Kathryn Masterson

July 13, 2009


During a recent Council for Advancement and Support of Education conference, experts predicted that the recovery from the current downturn will likely be weak, which could mean fewer large gifts to higher education and an overall slowdown in the pace of such giving, the Chronicle of Philanthropy reports.

Conference attendees heard that the bursting of the housing bubble and the slumping stock market are likely to affect the so-called "gift pyramid" — the fundraising model used by development offices to map out their campaign strategy. According to Bruce R. McClintock, chair of consulting group Marts & Lundy, campaigns that used to count on raising 70 percent of their dollars from the top 1 percent of donors (those who give gifts of $1 million or more) may see that shrink to just 50 percent. At the same time, the middle of the pyramid (donors who give between $100,000 and $999,999) could expand from providing 4 percent of the dollars raised to 25 percent, while the bottom the pyramid, which represents 95 percent of the donors to a campaign and 5 percent of the dollars raised, could shift to 90 percent of the donors giving 10 percent of the total raised. "We know [the pyramid is] going to get flatter, not steeper," said McClintock.

As a result, the number of gifts of at least $5 million is likely to decline from levels seen in recent years. Darrow Zeidenstein, vice president for resource development at Rice University, noted that campaigns will need to break from their traditional strategies to focus more on the middle of the pyramid, which will require more time and resources.

Despite the sobering outlook, speakers at the conference were optimistic that fundraising offices able to adapt to the changing environment and redeploy their resources accordingly will continue to raise significant amounts of money.

"I cannot imagine a more difficult but more important job right now," said former U.S. secretary of labor Robert B. Reich, referring to the challenge of raising private funds for colleges and needy students in a touch economic climate. "Your mission is more important than ever."

Masterson, Kathryn. “Colleges Will See a Decline in Megagifts, Experts Predict.” Chronicle of Philanthropy 7/13/09.

Reprinted with permission of The Foundation Center.

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