When Janet Dial arrived at California State University at Los Angeles in 2014, the fund-raising operation she was taking over was still a work in progress. Fourteen employees staffed the university’s advancement office, with four additional positions unfilled. The university had recently paid for new database software to help it track alumni and search for potential donors, but it was still neglecting some key best practices for raising money.
As a result, Cal State-LA was lagging behind some of its neighbors. Its endowment stood at about $25 million, and each year it raised about $5 million. By contrast, the University of California at Los Angeles, on the more affluent west side of town, had an endowment of about $1.7 billion and raised $557 million in 2014.
Like most regional public colleges, Cal State-LA rarely did any aggressive fund raising in the decades after its founding, in East Los Angeles, in 1947. But that is changing, both there and at other state colleges across the country. In the decade since the Great Recession clamped the flow of state money, regional public universities have been compelled to look to philanthropy to pay for some of the things that state support once covered.
These institutions are also working to overcome decades of inertia and a historical legacy that have hamstrung them. As public comprehensive universities went about their work of educating masses of middle-class wage earners, fund raising was rarely considered a priority at the system or state level. Meanwhile, private colleges and public flagships, competing for students and prestige, spent decades cultivating donations from their alumni, many of whom came from well-heeled backgrounds or parlayed their degrees into affluence. The divide between endowment haves and have-nots grew wider.
Savvy fund raisers, like Dial, have turned their institutions’ demographic and economic challenges into a competitive advantage. About 70 percent of Cal State-LA undergraduates are eligible for Pell Grants – and last year a report found that the university was among the top institutions nationwide at helping move its graduates from the bottom 40 percent of household income to the top 40 percent.
That promise of social mobility makes for the kind of pitch potential donors like to hear. “A $10-million-dollar gift to a major private university that raises $500 million to $1 billion a year isn’t going to do much” to better the lives of students who may need it the most, says Garrett P. Ashley, vice chancellor for university relations and advancement in the Cal State system. The same $10 million given to many Cal State institutions, he says, “would be transformative.”
Dial says she has seen the message about social mobility and a life-changing investment for lower-income students resonate when she meets to discuss potential giving. “I can’t tell you how many people have sat back in their chairs and said, ‘That’s me,’”‰” she says. “”‰’That’s me.’”‰”
For decades, meat-and-potatoes educational missions and ample state support meant that public comprehensive universities didn’t need to worry much about fund raising. In California, as in some other states, it was even frowned upon. Clark Kerr, architect of the vaunted Master Plan for Higher Education in California, reportedly discouraged the state’s public campuses from fund raising because he didn’t want taxpayer dollars going to such efforts.
Over the past couple of decades, that attitude has shifted. In 1994, the Cal State system office made fund-raising success a part of presidents’ annual evaluations – bringing in about 10 percent of the annual operating budget was a suggested target. In 2008, when the global financial crisis cut the legs out from under state support for public higher education nationwide, fund raising turned into an urgent priority.
Public comprehensives were already more susceptible to fiscal shocks, since they lack many of the financial advantages their flagship peers enjoy, says Kevin R. McClure, an assistant professor of higher education at the University of North Carolina at Wilmington. Many public comprehensives can’t count on the international or out-of-state students who often pay full tuition at flagships, and these universities usually can’t rely on income from big research grants or high-profile athletic programs. Their focus on serving lower-income students limits their ability to raise tuition. With state support and tuition revenue largely flat, or declining, the comprehensives “are being compelled into the fund-raising space because of those financial challenges,” McClure says.
They face a perception problem, too. Before becoming president of the American Association of State Colleges and Universities this year, Mildred García served as president of Cal State-Dominguez Hills, in southeastern Los Angeles County, and Cal State-Fullerton, in nearby Orange County. Because of the Cal State system’s longstanding role as a publicly funded good, alumni and other potential donors typically didn’t consider its universities in their giving, she says: “They figured, We’re supporting you through our taxes.”
One of the cruel ironies of the recession for public universities is that it not only left them desperate to make up for the millions slashed from their budgets but also hampered their ability to invest in building up their fund-raising operations. Since it isn’t seen as core to the academic mission or daily operations, “advancement can be the first place to take a hit” during a downturn, Ashley says. “Advancement can also be the last place to recover.”
But advancement offices at public comprehensives across the country are ramping up, says Jason D. McNeal, a partner at Gonser Gerber, a company that consults with colleges on fund raising. Ten or 15 years ago, his firm would have been working with maybe a couple of public comprehensive universities at any given time, he says, “because the market, the interest, just wasn’t there.” In the past five years, Gonser Gerber has worked with about 30 such institutions.
Janet Dial, vice president for advancement at Cal State-LA, says messages about helping low-income students succeed resonate strongly with potential donors.
But catching up is difficult. Advancement offices that have been understaffed and underfunded for decades are being asked to start cultivating as many as hundreds of thousands of alumni with whom they may have had little or no prior contact. Jeff Martin, practice manager of the Advancement Forum at EAB, a company that advises colleges, says the vice president for advancement at one regional comprehensive told him that just going out to meet all the affluent alumni with whom the university had no current relationship “would take their current staff something along the lines of a quarter-century.”
History and geography can also present formidable obstacles to regional comprehensives’ fund-raising efforts. For example, the university that is now Cal State-Dominguez Hills was originally supposed to be located on the Palos Verdes peninsula, amid a clutch of predominantly white, affluent beach communities at the southernmost tip of Los Angeles County. After the Watts uprising, in 1965, Pat Brown, the Democratic governor, decided instead to establish the institution inland, at an alternate site already under consideration amid predominantly African-American, lower-income communities.
For decades, Dominguez Hills, like many other Cal State campuses, put little of its modest resources into advancement. When Jeff Poltorak, senior associate vice president for advancement, arrived in 2011, the university had one gift officer to handle its 100,000 alumni contacts. The number of contacts might have been larger, but about a decade’s worth of graduates had never been entered into the alumni database, he says.
New software “brought us into the 20th century,” Poltorak says. But none of the data had been cleaned up before being converted. The university eventually hired someone for the job, which he thought would take about six months. Three years later, he says, “she was still going through it.”
California State U.-Dominguez Hills received $4 million, its largest gift ever, from Toyota USA Foundation in 2017 to build a new center for STEM education. Toyota previously supported the creation of mobile fabrication labs (above).
Dominguez Hills also suffered from the intersection of several vicious cycles, which led to “reputational issues that were really challenging,” says Carrie Stewart, vice president for advancement. When enrollment was low, state support would be commensurately decreased, which encouraged the university to enroll more underprepared students on a conditional basis. The university didn’t have the resources to fully support those students, and the data showed as much. When Stewart, arrived in 2014, the six-year graduation rate was about 27 percent, a data point that made the university a tough sell for many prospective students and donors alike. “Funders typically want to give to programs that they deem to be very successful,” Stewart says.
The university has invested in improving student performance – the six-year graduation rate was up to 42 percent this past year (the national average for public institutions is 59 percent) – and in its community-relations and fund-raising operations. The advancement staff has grown to include six front-line fund raisers and a prospect researcher, the university’s first. Over the past four years, total annual giving has tripled, to about $6 million. But after years of desultory contact with graduates, the advancement staff is still doing the slow, painstaking work of cultivating potential big gifts from alums.
Most of Dominguez Hills’s major fund-raising successes in the past few years have come from outside its alumni base: About 80 percent of its private dollars come from foundations and corporations. The largest single gift in university history, $4 million, came from Toyota to pay for a new science-and-innovation building.
Smaller, more isolated institutions have their own set of problems. A public comprehensive university located miles from any sizable city isn’t as likely to be able to curry donations from foundations and big corporations. “They are just kind of out of the loop, out of the network,” says McClure, of UNC-Wilmington. In populous areas, the bulk of alumni may remain geographically close to their alma mater – about 90 percent of Cal State-LA’s graduates live within 50 miles of campus. A more rural institution may not be so lucky.
“We’re pretty realistic here that philanthropy is not going to solve the cutbacks in state funding.”
Humboldt State University is relatively small, with about 8,000 students, and remote, located on a bucolic but sparsely populated section of the Northern California coast. (Humboldt County has about 134,000 residents; Los Angeles County has 10 million.) Those factors create additional challenges for fund raising, says Craig Wruck, Humboldt’s vice president for university advancement.
Wruck spent part of his career at the University of Minnesota Medical Foundation, where he had the advantages of raising funds for a public research flagship: an army of gift officers, a cutting-edge database, and a host of established donors. Humboldt State has none of those things. It has additional complications as well.
Only about 28 percent of Humboldt State alumni live in the immediate region of the campus. About 15 percent live in the San Francisco Bay Area – a five-hour drive away. Otherwise, “our alumni are spread all over the place,” Wruck says. The university can’t afford extensive travel to send its two gift officers out to visit most of its far-flung 55,000 alumni contacts.
Humboldt State is trying to strengthen its connections with alumni prospects remotely, through phone calls and video chats, along with invitations to visit campus when they are in the area. And rather than cultivate alumni with the financial capacity for seven- or eight-figure gifts – whom the university has relatively few of – the advancement office has been focusing more attention and resources on midlevel donors, who might give in the four- or five-figure range. “What we’re really trying to do,” Wruck says, “is find a cost-effective way to bring you up to that next level.”
Raising expectations – and fulfilling them consistently – can take a long time. In 2006, San Diego State University was preparing to open its first-ever comprehensive fund-raising campaign. Mary Ruth Carleton, vice president for university relations and development, led a process that set the campaign’s goal at $500 million. Some at the university “laughed at Mary Ruth,” says Jim Herrick, assistant vice president for special projects. But by that time, she had seen how far San Diego State had come in its advancement efforts, and she had an inkling of how far it could go.
After all, Carleton had been one of only a handful of directors of development at San Diego State back in the ’90s, when the staff totaled about 20 people. “It was very rudimentary, very underfunded,” she says. “We weren’t asking people for big gifts to endow programs or things like that.” At the time, bringing in a $1,000 annual gift was still considered a coup.
After taking a fund-raising job at a private university in 1997, Carleton was recruited back to San Diego State in 2006. Now the office she leads has close to 100 staff members, and the fund-raising campaign she started on her return closed last year with a final total of $800 million, 60 percent more than the initial goal. The next campaign will probably shoot for at least a billion dollars.
When San Diego State U. first considered a $500-million campaign, in 2006, some people at the public university were skeptical about its ability to meet that goal.
But merely pumping money into the advancement office won’t make much difference if the leadership isn’t personally invested in the fund-raising effort. Bringing in gifts at San Diego State’s level takes commitment from trustees all the way down to deans, and presidents especially. “If someone is going to give you a million dollars, they need to hear from the president of the university that their visions are aligned in some way,” Herrick says.
Starting with Thomas B. Day, president from 1978 to 1996, a succession of leaders at San Diego State has put money into fund raising and become personally involved in the process. Deans now go through fund-raising training, and Carleton has extensively coached subsequent presidents on how to ask potential donors for millions once the advancement office has laid the groundwork.
President Stephen L. Weber, who retired in 2011, “got turned down more times than people said yes,” she says. “He never quit. He just kept going.” Once leaders land a big gift, Carleton says, they often say, “”‰’Hey, this is pretty fun. I like doing this.’ And they get into the swing of it.”
The first thing that Carleton and her team put on their agenda in the mid-2000s was $11 million for an alumni center on campus. “It was a real, visible sign of what philanthropy could do,” she says, and the campus and potential donors took notice. Some faculty members were wary that such efforts diverted money from academics, but fund-raising success has helped assuage many concerns. Now Carleton credits the faculty for getting on board.
There is no secret trick to engaging and landing donors, she says. “It’s just going out and meeting with people, bringing the president to visit, bringing faculty out, having them come to campus, having them mentor students.”
Getting alumni and members of the community involved in the university can benefit it in the short term, but the long term is where the payoff is. A major gift typically takes 18 to 24 months to bring in, experts say, and the more relationships you’ve built with alumni over many years, the easier it is to locate and court those with the capacity to give at that level. San Diego State is far ahead of most of its fellow al State universities in that regard.
After all, a thousand-dollar donor is unlikely to become a million-dollar donor overnight. “Usually you can’t skip the $10,000 step, or the $100,000 step, on the way to the $1,000,000 step,” Herrick says. “We’re lucky that we’ve got 15 years of marching through those steps.”
Fund raising can’t solve all of a public university’s problems. Almost all private money donated to colleges these days is aimed at some specific need – a new student center, say, or more scholarships. Large gifts can help an institution, but they can’t buoy its operating budget. At Humboldt State, philanthropic dollars account for a modest 2.5 percent of the annual institutional budget. “We’re pretty realistic here that philanthropy is not going to solve the cutbacks in state funding,” says Wruck, the vice president for advancement.
Besides, deeper factors may shape fund-raising success. For example, San Diego County is among the more affluent areas in California, with a median household income of about $64,000. In Humboldt County, median income is about $42,000. In Los Angeles County, a region of unevenly distributed extremes of wealth and poverty and home to both Cal State-LA and Cal State-Dominguez Hills, median household income is about $56,000.
Local economic factors may put some limits on universities’ ability to raise money, says McNeal, of Gonser Gerber. “We live in a finite world, and if you’re pulling mostly first-generation college students who typically don’t come from families of wealth, there may be some challenges for you.”
García, of the state-university association, has seen the difference firsthand in the two Cal State institutions she has led. Fullerton had more fund-raising success during her term as president there than Dominguez Hills did. But Fullerton had a larger advancement staff, and the recession struck when García was at Dominguez Hills. The surrounding community also exerts considerable influence. “There is a lot more money in Orange County than there is in the Carson area,” where Dominguez Hills is located, she says. “Depending on where you are situated, how much money you raise may be great for your area.”
The type of students a university graduates can make a difference, too. Cal Poly at San Luis Obispo, a Cal State institution that specializes in tech fields, received a $110-million gift from an alumnus last year. But most institutions won’t produce as many graduates with big-gift potential. “We prepare the teachers, the social workers, people in public administration,” García says, “all those areas that they’re not going to make the kind of money that they give us millions and millions of dollars.”
Most public comprehensives won’t know how much they can raise until they try. Advancement-staff members at public universities have expressed concerns to McClure, of UNC-Wilmington, about soliciting gifts in an economically depressed region, or about the potential of an alumni base dominated by middle-class salaries. But he says he’s also spoken with gift officers who’ve called on affluent alumni and heard, “It’s wonderful that you guys are talking to me, but where have you been?”
At Cal State-Los Angeles, the process now starts early – when students graduate. Each member of a graduating class is encouraged to give an amount corresponding to his or her year – graduates this spring were asked to chip in $20.18; next spring’s class will be asked to give $20.19. The amount, of course, is secondary to instilling the habit of supporting the university. One hundred students made such gifts in 2016, while 1,400 did so this year.
The students themselves, and their stories, have also become part of the appeal to potential donors. The advancement office relies on a call center staffed by about 25 students to contact alumni, and part of what they share is the first-person evidence of the impact of giving to Cal State-LA.
And the advancement office maintains a connection with every alum for whom it has a valid mailing address. At one time, less than a quarter of alumni received the alumni magazine, because it was deemed too expensive to mail it to the entire list. Now everyone gets a copy.
If you’re pulling in mostly first-generation college students who aren’t from wealthy families, ‘there may be some challenges for you.’
Eventually, these steps can lead to bigger things. Over the past few years, Cal State-LA has raised as much as $14 million a year – nearly triple what it used to pull in. Its endowment has risen to about $40 million, a 60-percent increase since 2014. Such success is also built on face-to-face meetings like the June 2015 lunch that Dial had at a restaurant near campus with an emerita professor and alumna.
Patricia A. Chin and her husband, William Chin, a rheumatologist, had a long history of donating to the nursing program at Cal State-LA, from which she had graduated and where she had taught. “We tried to do small things for the students, because they don’t have a lot of opportunities for things,” Chin says.
Cal State had been part of her life since the late ’70s. Now the couple had reached what her husband called “the giveback phase” of their lives.
Their discussions with Dial unfolded over a couple of years, leading eventually to the event that took place one morning this spring, on the sun-baked plaza in front of the School of Nursing. William A. Covino, the university’s president, hailed “a really momentous event for Cal State-LA,” and at his signal, a banner dropped to reveal a new name lettered across the front of the building: The Patricia A. Chin School of Nursing. Confetti cannons on the surrounding rooftops went off with a bang, startling everyone and filling the air with black and gold streamers.
The $7-million gift from the Chins paid for a new simulation lab, where nursing students can train on animatronic patients, and it endowed the Chin Family Institute for Nursing, to further nursing training in Southern California.
It was the biggest one-time gift in the institution’s history. And, Dial says, the university has only begun to tap its potential. She and her staff have about 180,000 alumni records in their database. Other people like the Chins might be in there.
“I just think it’s huge,” she says, of the possibilities. Institutions like hers, she says, are “sort of a sleeping giant.”
Source: Chronicle of Higher Education