Raising Funds In Hard Times

' Tough Year ' For Maryland Schools Could Be Just The Start Of Decline In Donations

July 20, 2009|By Childs Walker | Childs Walker,childs.walker@baltsun.com

David Sears had high hopes for his first year leading the fundraising office at Loyola College.

An $80 million capital campaign had just concluded successfully, and he had all sorts of fresh plans for reaching out to alumni. Then, the stock market plummeted.

Nine months later, at the end of its fiscal year, Loyola is confronting a 20 percent drop in annual fund donations.

"We experienced a tough year," said Sears, Loyola's vice president for advancement. "It was very much an educational experience. For all the grandiose plans we had coming in, we were left scrambling from the start."

They weren't alone.

Less than three weeks after their fiscal year ended, colleges and universities are sorting through the results of fundraising campaigns conducted during the worst recession since the Great Depression. Though the numbers are hardly catastrophic, many have seen declines in the smaller gifts used to cover annual expenses.

At some institutions such as the Johns Hopkins and Towson universities, major gifts mitigated those declines. Other schools such as Loyola, the University of Maryland, Baltimore County and the University of Maryland, College Park weren't so fortunate.

UM raised $112 million, about 12 percent less than the university's goal of repeating its record $130 million haul from 2008. That hit came largely from fewer gifts larger than $1 million.

"We heard a very common message, and it's that everyone is feeling the pain," said Brodie Remington, vice president of university relations at UM. "People cited losses in their 401(k)s and their bonuses, but just as important is the uncertainty about when this is going to end. It's psychological."

Leading fundraisers suspect they haven't seen the worst impact of the downturn.

"At first glance, you might think that there was no real impact," said Fritz W. Schroeder, senior associate vice president for development and alumni relations at Hopkins, which raised about $500 million. "But fundraising tends to lag the market a little bit, because it's an exercise in building long-term relationships."

In other words, major gift agreements that were in the works before the recession did not fall apart. But the effects might be felt in agreements that don't come together next year or the year after. Even large foundations and wealthy individuals could tighten their budgets if the economy doesn't improve soon.

"A lot is going to depend on what we see over the next six months," said Greg Simmons, associate vice president for development at UMBC, which fell about $3 million short of its $13 million goal for fiscal 2009. "Looking at the early numbers, it appears it's going to be another challenging year."

The recession took an estimated 5 percent bite out of overall philanthropy, and a recent survey conducted by Hopkins researchers found that 40 percent of responding nonprofits were experiencing "severe" stress. So college and university fundraisers were hardly surprised to see donations slow.

But it was still a shock after years of steady gains. Colleges and universities raised a record $31.6 billion in fiscal 2008, according to an annual survey by the Council for Aid to Education. But Ann Kaplan, who conducts the survey, said the total will probably drop this year for the first time since 2002.

"We don't have our numbers in, but anecdotally, we know that it was not a good year," she said.

Whether they were calling on behalf of Hopkins or smaller liberal arts colleges, fundraisers heard the same tales of woe.

"People who are on the margins are having trouble with charitable giving," said Janet Wiley, vice president for development at Goucher College. "When we make our calls, we hear about people who have lost jobs. A lot of people say, 'I can give, but I can't give as much as I used to.' "

The year produced a mixed picture at Goucher, where major gifts held steady and an $80 million capital campaign remains on track, but the annual fund fell about $300,000 short of a $2.3 million goal. As at Loyola, the annual fund helps cover financial aid and unexpected expenses that arise throughout the year.

"A lot of recent graduates probably don't realize how many of those costs aren't covered by tuition," Wiley said. "So it's up to us to explain how important each gift is to the students who are here now."

Though Hopkins raised $500 million in cash and commitments, a staggering figure on the surface, Baltimore's most prestigious university also encountered some weakness among smaller donors. Despite a 5 percent increase in the total number of donors, Hopkins received 5 percent less money for its general fund.

"People try to do what they can, but maybe they only give $75 instead of $100," Schroeder said.

Newer graduates, irregular donors and graduates who work in hard-hit sectors such as Wall Street were the most likely to stop giving over the past year, he said.

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