Client or Event Title | 1 Giving Trends in Independent Schools NYSAIS Advancement Conference Kathleen Hanson, Senior Consultant & Principal Leader: Schools’ Practice Group

Client or Event Title | 2 Your planning committee asked me to address:  Is the amount of money for philanthropy getting smaller?  Are schools less of a priority when individuals are considering charitable giving?  Are people changing the areas they wish to give to in schools?  Are schools dealing with “culture clashes” with old versus new money

Client or Event Title | 3 Many trends are regional………….  Certainly impact of the recession created less giving among some segments of the school community  Loss of jobs  Loss of bonus  Real Estate Market  Multiple tuitions in the school

Client or Event Title | 4 Some trends relate to the age of the school  Younger schools which rely almost completely on current parent and grandparent giving felt the downturn in the market  Elementary schools felt both the downturn in enrollment and giving – families feeling that a public option would be “acceptable” for a younger child

Client or Event Title | 5 Is the bucket of dollars smaller? According to the Federal Reserve  The median household lost nearly 39% of its wealth from 2007 to 2010  Income among the richest 10% of Americans fell 7.7%

Client or Event Title | 6 Yet …….  In 2010 there were 15 gifts of $50 million + to higher education  In 2011 there were 6 gifts of $50 million + to higher education  No data for independent schools

Client or Event Title | 7 Anecdotally………………..  Donors of mega gifts are giving – for them the market volatility is the “new normal” and they are moving on  Traditional major gift bands (six figure gifts) are more problematic – they are worrying about retirement assets, unemployed children and grandchildren and the ability to fulfill a pledge over time.

Client or Event Title | 8 A Marts & Lundy Special Report – State of Philanthropy 2008 to 2011  In Independent Schools: Cash for operating support shows growth of 4% in unrestricted gifts and even more robust growth of 10% in restricted gifts.  Why the more robust growth in unrestricted? Shift in donor attitudes where donors favor a gift to a specific institutional priority over unrestricted annual fund appeals

Client or Event Title | 9 Same report for independent schools  Cash for capital support, (FY2011 over FY 2009) has increased 16% for endowment while gifts for facilities have decreased 17%  Still, giving has not rebounded to the 2008 levels – despite increases

Client or Event Title | 10 Is a smaller bucket of wealth the only problem?  While the economy and re-distribution of wealth are key factors in what we are seeing, we also suggest a third factor which is impacting results and that is institutional perspectives and allocation of resources within the advancement program.

Client or Event Title | 11 Donor attitudes  Donor attitudes has shifted but institutional messaging and donor engagement has been slow to adapt.  Some schools act as if they are victims of circumstances  Others are defying all odds and enjoying record years

Client or Event Title | 12 Distinguishing Characteristics Enlightened leadership Within advancement and within the school  Define the role you wish philanthropy to play in the life of the school  Invest in it  Volunteer Leaders in Philanthropy engage at the highest level  Recognize: Donors want engagement and conversation over informing and educating

Client or Event Title | 13 Are schools less of a priority for donors?  Many schools are under soliciting (not enough volunteer help and the culture doesn’t support staff soliciting)  Schools that emphasized transactional giving suffered during the recession  Little identification and engagement of donors  Schools that presented “Ideas” which created solutions and had a positive impact on teaching and learning suffered far less – in fact, many have achieved great success in both annual and capital giving.  Schools that can answer the “Why?”

Client or Event Title | 14 Bottom line is Value  Do your donors value the contribution you are making to students and/or the community?  Can you illustrate that the results of philanthropy provide you with the resources to do significantly more for student learning and program innovation?

Client or Event Title | 15 An example……… NYC Day School Institutional Expenses$32,932,000 Endowment 113,200,000 Draw (5%) 5,660,000 Gifts to current operating 5,025,000 Draw + gifts to operating 10,685,470 Draw/operating as % of IE 32.4%

Client or Event Title | 16 Another example MA Boarding School Institutional Expenses47,103,500 Endowment 387,500,000 Draw (5%) 18,375,000 Gifts to current operating 5,188,626 Draw + gifts to operating 23,563,626 Draw/operating as % of IE 50%

Client or Event Title | 17 Are donors changing where they want to give within schools?  Yes, for many, particularly within the annual fund  Donors want to have an impact with their gift  Donors want $$ directed at people and programs more than facilities  Great emphasis on giving which supports faculty  Current parent donors recognize the need for adaptation and innovation

Client or Event Title | 18 Giving to endowment  More likely that gifts from alumni will be directed to endowment  Current parents need a great deal of conversation and engagement to understand the value of endowment  Some donors today are believe each generation gives to immediate programming needs, not endowment

Client or Event Title | 19 Culture Clashes – Old versus New Money  Old versus new and more Self – made wealth often wants “immediacy” and “impact” Challenges  Non native-born donors Lack of familiarity with mainstream American philanthropy systems & structure

Client or Event Title | 20 International Fund Raising  Families of current International students  Many boarding schools are having great success  There are steps to follow for success  International alumni  Involvement from graduation on is imperative  Membership on governing boards

Client or Event Title | 21 Schools with egalitarian cultures  Resistance to high levels of recognition  Desire that all events are inclusive  Lack of culture of philanthropy

Client or Event Title | 22 Bottom Line Three essential elements: 1.Case for support 2.Constituency that is engaged in meaningful conversation with the school 3.Catalysts – Staff and volunteers who move the program forward

Client or Event Title | 23 Q and A