University of Minnesota, Morris
Campus Resources and Planning Committee Minutes

April 12, 2001


Present:  Margaret Kuchenreuther, Mary Elizabeth Bezanson, LeAnn Dean, Bryan Herrmann, Jim VanAlstine, Lowell Rasmussen,
                Maddy Maxeiner, Joe Timmerman, Ferolyn Angell

Absent:  Ken Crandall, Norrine Ostrowski, Pam Gades, Prince Amattoe, Annie Olson, Andre Chouravong

Guest:    Sam Schuman

(In these minutes: discussion of resource issues/visibility/fund raising by Maxeiner)

Presentation on External Relations: Resources and Visibility

Maxeiner began by stating we have had numerous reasons for excitement and to feel a sense of progress over the past couple of years:  The kick off of our successful capital campaign, a high caliber group of committed campaign volunteers, the vital RFC partnership with the community, a new Science building that resulted at least in part from an effective lobbying effort by WCEDA, alumni, and faculty/staff and retirees; and extended publicity efforts under Samís leadership e.g. the partnership with MPR and the billboard on I-94.  We have done some new things, seen positive results, and there is strong momentum.


I.  Higher visibility and more resources have emerged as pressing priorities over the past several years:

ď Report from the Academic Search Consultation Service, Chancellor search, August 1999

"Fundraising must be a top priority of the next chancellor.  Yet UMM cannot achieve these goals without more support in the areas of development, alumni relations, and public relations, areas which are now badly under staffed and under funded."

"The office of University Relations has no director; it is run by a skillful and energetic administrator who, among other activities, sends out over 500 press releases per year.  The office has no travel budget.  For the past seven years, no professional has been employed to place stories about the college in the regional and national media.  The college has an exciting story to tell, and it is not being told. "

ď NCA Reaccreditation team in a report issued in April of 2000.

"The development and external relations segment of the campus is doing reasonably well, but is hampered by small staff and resources.  It is very likely that UMM cannot achieve the desired outcomes [of the capital campaign] without more support in the areas of development, alumni relations, and public relations, areas at UMM which are under staffed and under funded."

Listed as one of five campus concerns:  "There are insufficient staff support and resources for external relations and fundraising."

ď Sam Schuman, fall of 2000, setting forth his vision and priorities, based in part on series of campus discussions held during the spring of 2000:  a) student and faculty recruiting and retention; b) higher visibility; c) more resources from private and public support; d) improved processes and communication.

Current picture

Gift History
Last year record high of $2,077,348.

Campaign Minnesota
We are in the middle of a $6M capital campaign over 7 years, a part of an overall UM campaign to raise $1.3 billion by June 30, 2003.  We have reached 94% of our goal, with a total of $5.6 million in gifts and pledges.  Our intention is to surpass this goal significantly.  We will evaluate our goal after this fiscal year.  We are currently at a plateau, though several large gifts are in their early stages.  The campaign's priorities are:  scholarships and student support, faculty/staff support; and strategic infrastructure.

Deferred and endowed gifts
Many of the dollars in our campaign total represent deferred gifts and gifts pledged over five and (in a couple of cases) ten years.  As is good practice, larger gifts go into endowed funds, which generate a spending stream of only 5.5% of the principal, with the remainder of the earnings re-invested with the principal.  i.e. a $25,000 gift will be invested and will make available $1,375/year for spending.  Thus we will not realize an immediate infusion of new dollars as a result of the current capital campaign.

Goal comparisons
While this goal represents a tripling of that initially assigned to us, it is very small compared to other institutions of our size, age, and profile:  St. Maryís of Maryland, $53 million is current campaign goal.   In 1996, Mary Washington College (Fredericksburg, VA) had $20,000,000 campaign goal.  UNCA had $10,000,000 next campaign goal, reported in 1996/97.  Private four-year liberal arts colleges in Minnesota have had goals in the nine figure range.

It is important to remember that funds raised in the past are the largest predictors of future success.  This is for two reasons:  First, current donors are our best prospects for future gifts.  Second, successful fundraising follows an upward curve as momentum builds, the prospect base widens, and donors increase their commitments.  In order to raise $10 million you must first successfully raise $5 million, and before that $1 million.

Our goal of $6M is smaller than St. Maryís of Marylandís $53 million goal, because UMM is behind St. Maryís in terms of investing in its development programs.  In 1997 St. Maryís of Maryland had 17 staff members in alumni, university relations, and fund development--and had raised $3 million in their previous fiscal year.  In 1997 UMM had four staff members in external relations, and raised $250,00 the previous fiscal year.  St. Mary's of Maryland is much like UMM in other respects: a liberal arts college since 1967, enrollment of 1600, offers B.A. only, town of 3,200, alumni base of 7,000 [UMM alumni base was 10,000 at the time of the survey].)

II.   Staffing

Mission statement:  UMM External Relations is dedicated to advancing UMMís mission by increasing awareness and good will, fostering financial support, and building community among our many and varied constituents. External Relations includes: alumni relations, fund development, legislative relations, special events and university relations.  Our External Relations effort also involves a significant portion of the Chancellorís time, 1/4 to 1/3, spent calling upon donors and prospects, meeting with legislators, writing to donors, attending alumni events throughout the state, presiding at special events, and generally providing the vision for UMM to our communities and constituencies.  External relations needs to be a very high priority of the campus Chancellor.  Fortunately, it is a very high priority of Samís.

Current staffing, 4/01
External Relations consists of:  (including both professional and support positions)

1.75 FTE, alumni relations
1.0  FTE, university relations
1.0  FTE, special events/LaFave House manager
4.0  FTE, fund development
1.25 FTE, external relations
Total 9.0 FTE

(FTE Development officers involved in direct one/one fundraising = 1.5)

Comparative staffing information:

Gathered two years ago for NCA review:  10 COPLACs:  UNCA, SUNY-Geneseo, Henderson State, Keene State, UMF, Truman State, Univ. of Montevallo, New College, Massachusetts College of Liberal Arts, Mary Washington College

Average number of professional and support staff FTE in alumni relations, fund development and public relations, 6/99:

Average COPLAC 6/99   = Fund Dev. =  5.6, U Relations = 4.4, Alumni Rel. = 3.1, Total = 13.1

UMM 6/99 =    Fund Dev = 3.4, U Relations = 1.0, Alumni Rel. = 1.84, Total = 6.2
UMM current =  Fund Dev = 4.0, U Relations = 1.0, Alumni Rel = 1.75, Total = 9.0
        plus 2.75 Ext Rel and Special Events
Privates =    Fund Dev =  21, U Relations = 4.6, Alumni Rel. = 12, Total = 37.6

Research gathered 1996-97:  Comparison with ten COPLAC institutions:  UMM had smallest staff (4) and raised least dollars ($250,000).  Next smallest staff raised next least dollars.  Most staff raised most dollars (17 and $3M).  Independent of size of alumni body.  Not due to enrollment size, age of liberal arts college, or age of development program. Dollars raised not correlated with size of alumni base (or age of institution/age of development program)

Other published research consistently shows positive correlation between the number of development staff and dollars raised.

III.  Critical areas to strengthen at UMM

Weíve made some investments in the past five years and those investments have been paying off:

1996 staff of  4  raised $250,000
1999 staff of 6.2 raised $750,000
2001 staff of 9.0 raised (FY 00 $2M)

University Relations staffing:
"The college has an exciting story to tell, and it is not being told. " from Academic Search report

Need one new FTE University Relations professional to increase visibility and integrate current campus themes, messages, media and audiences.  Requested in 2001 Campus Compact but will not be funded.
Need one clerical support position for University Relations

University Relations area has not grown in past five years, no restoration since retrenchment in early 90ís. Formerly a three person office, now staffed by one person. Many ëinternalí functions reside here, e.g. student/staff directory, weekly bulletin, room set ups and scheduling, etc. Need to assess whether internal functions should be re-distributed
ď Lack of integrated marketing plan for UMMónot marketing ourselves as an institution, e.g. theme, message, values, mission, vision, target audiences, deliberate message delivery.  Hampers admissions as well as fundraising.
ď Lack of statewide or national news coverage.
ď Need to upgrade external publications, including alumni and faculty features.

Development staffing:
ď Development officer 1.5 FTE is low
ď 50% of 4.0 FTE in fund development on temporary money from UM Foundation

ď Gaps in constituencies not being cultivated or developed:
    Corporate and foundation giving
   No community/business drive

ď Need one FTE development officer.  Asked for in 2000 Campus Compact, not funded.

ď Need 50% external relations database manager, 20,000 records, expanding relationships, not just graduates anymore, technological basis for individualized, segmenting, tailored approaches, grows by 1,000 records every 2.5 years.

IV.  High priority funding areas

Scholarships, four year:  currently can provide $50,000 per year from endowed funds plus current fundraising.  INSUFFICIENT FUNDING relative to projected needs of over  $500,000 dollars per year beginning in 2004 and continuing.

New buildings:  beginning in 2004 construction will require private fundraising.  Current predictions are that 1/6 of project will be borne by UMM, through various sources.  In 2004 capital request, $1.25 million will be UMM's share.  In 2006, over one million.  Clear trend to expect private gifts to be involved in moving building projects ahead.  Examples: Edson Auditorium ($300-500,000), HFA feasibility study ($25,000), plus lead gifts if project moves forward ($several million range).

Special Talent Fund for Athletic and Co-curricular Scholarships  recommended by the Athletics Task Force and implemented by Chancellor Schuman beginning in this academic year.  In this first year $19,000 in athletics scholarships awarded; next year $60,000.  Need to build up endowment while simultaneously jump starting program to make a difference in athletics competitiveness in the near few years.  The FY 2000 average for athletic scholarship dollars allocations within our NSIC athletics conference of 10 colleges was $275,000.  Range was from $135,000 to over $400,000.

V.  Some fundamentals that will not change

Values, mission, and relationship building form the heart of development and institutional advancement:  Philanthropy is fundamentally an articulation of values.  UMMís mission is distinct and persuasive.  Donors are attracted to our mission and our values.  Marketing UMM should also be values basedófocus on values, mission, the difference we make.   The development process is one of relationship building, based on our mission, and cultivated over time.  People give to help people; and to organizations that are trustworthy.  Generosity is stimulated by passion.  Generosity increases as people become more fully engaged in the life of UMM, and understand the impact of their gifts.

Principles and dynamics of fundraising:

Donor pyramid, need to graduate donors from base to top: cycle is to inform, involve, identify prospects, cultivate, solicit, steward, steward, steward.  Best prospects are current donors.  Bequest donors show pattern of consistent involvement over many years.  Major gifts require lead time of 3-5 years to cultivate and develop to fruition.  Major gift programs focused on individuals = KEY TO SUCCESS.  Potential donors are very different from one another and require individualized attention.

Research shows a direct correlation between total dollars raised and the number of staff members with direct income-producing responsibilities. Predictor of fundraising success = number of staff.  Predictor of fundraising success = previous fundraising success.  Deliberate program needed in order to increase private gift income over time.

VI.  Trends:  A look ahead

Possible changes in tax laws:  (1) estate tax repeal?  Unknown impact on philanthropic activity; many charitable groups lobbying against repeal, other leading scholars in philanthropy argue that this will not harm and may increase charitable giving.  (2) greater deductibility of charitable gifts for those not itemizing (3) ease disadvantages of charitable giving from retirement assets; withdrawal from IRA for charitable gift not subject to income tax; effective in 2002 pending final IRS regulations and optional in 2001; new rules for charitable IRA payouts, place charities on better footing, donít cause accelerated pay out.

Planned giving activity is steadily increasing:  Studies document increased activity over past ten and twenty years, anticipate this area will continue to increase in importance:  (1) The much discussed generational transfer of wealth from World War II generation to baby boomers, estimated at between $12-$30 trillion over next 20 years. (2) Depending on economy, it is estimated that estates worth $41 to $136 trillion will be left between now and 2050.  (3) Statistics show age is dropping when first will is drafted. (baby boomers are starting to plan).  (4) The majority of adult Americans do not have a will.  Bequests are the most popular form of planned gift and account for the vast majority of planned gifts.

Bull market of the past ten years may be over, with much slower growth in capital and more psychological restraint and uncertainty with respect to economic fortunes.

Data trends and forecasts:  Increasing diversity of American population:  philanthropy increasingly reflects multi-cultural values, traditions, community needs.  Over the next twenty years, 70 million persons will surpass age 65 as the baby boomers retire.  The wealthy have gained the most from the past thirty years of prosperity.  The wealthy are giving more:  Between 1993-96, average contributions from itemizers with incomes over $200K increased by 3% vs. decreases in all other income categories.  80% of current wealthy are first generation millionaires.    The new philanthropists ­ first generation wealth, entrepreneurial, made their own dollars.  Foundation giving will increasingly be from ­ the foundations of the new entrpreneurs.  Decline in effectiveness of broad based marketing and fundraising solicitations.  Days of mass mail are over.  Individual relationship building is the key to future effectiveness.  Donors interested in projects and tangible solutions, not general support.  Meaningful relationships, values, impact.

UMM needs to focus externally!

We have no Board of trustees.  Must develop external leadership and "boundary spanners.  Currently rely upon UMM Alumni Association Board, West Central School of Agriculture Alumni Board, Capital Campaign Executive committee, West Central Educational Development Association.  Committed "boundary spanners" and advocates, sharing investment in the vision.

Strategic institutional marketing.  Sufficient staff and budget resources to create and maintain strong external institutional presence: for infrastructure, communications, and personal relationship building.

What we will achieve: Mission based, donor-centered, life-long relationships between UMM and alumni, friends, "relatives" and community stakeholders.  Dynamic campus community with financial resources and enrollment sufficient for UMM to achieve its vision.

Request of CRPC

The hope is that CRPC will make gaining higher visibility and increasing resources a high priority in its recommendations to the Chancellor this year.  Investments in external relations, enrollment management, grants development, and perhaps other areas of the campus are clearly investments that will bring significant returns. Investments now are needed for increased resources in future years.