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Financial support is an important aspect of institutional support. While is not a dominant revenue source at most institutions, it is vital to the work we do. In many ways, it bridges the gap and enables institutions to pursue their missions. In addition, it is a great way for people to participate in the work God is doing at our schools.

Recent data shows the importance of understanding the generational differences between givers, and one of my presentations at the upcoming the ATS DIAP conference will cover some of that information. Today, I want to focus on two sources of giving that may need more attention given to them. They are External Foundations and Temporarily Restricted Gifts.

NOTE: External Foundations refers to foundations not organizationally connected to the school.

The Data

There are two primary sources of data on which I am basing these thoughts: 1) ATS, and 2) Peer Studies of ATS schools.

External Foundations
Over the past 20 years, the total amount given to ATS schools from foundations has increased by 185%. In 1993, giving from foundations was 14% of all giving and in 2012 it was 21% of all giving to ATS schools. In the most recent ATS Advancement Peer Study of which I was a part, we found that foundation giving increased by 121.5% over the past ten years and 28.5% over the past year. Foundations carried the schools in that peer study through the recent recession.

Temporarily Restricted Giving
Over the past decade, temporarily restricted giving to that same set of peers increased by 39.9%. However, it is important to note the fluctuating nature of temporarily restricted gifts in the peer set. One year it was 50% of total giving, the next 32%, and most recently 45.3%.

The Impact

External Foundations
First, we need to look closely at how we are interacting with external foundations – specifically ‘organizational’ foundations. In essence (and I know I am oversimplifying this) there are two types of foundations: smaller family foundations which are connected to a living individual and ‘organizational’ foundations like the Lilly Endowment. This post deals with organizational foundations.

In my experience, many institutions spend little to no time on external foundations, often due to having limited staff time to devote to the endeavor. I believe the statistics above call us to realize the importance of such work. Even without devoted effort, giving from this source has increased dramatically. I am not advocating for each institution to hire a full-time grant writer, but I am saying nothing will happen if no time is allocated in this direction. It might be time for us to look at how we are using our time when it comes to our development efforts. Could we decrease the amount of time we spend on direct mail? Could we shift how we use events? Could we focus on integrated relationship development processes which make our work more efficient? I think we can, and I think we must.

Temporarily Restricted Gifts
As we know, a temporarily restricted (TR) gift is one that is to be used for a specific purpose or project. Rather than a gift to the ‘annual fund’ which can be utilized wherever needed, a TR gift must be used for a specific purpose. For that reason, it has been increasing in popularity. One shift that is taking place is the move toward directed giving. The boomer generation started this trend, and it is even more prevalent with younger generations. People want to see the impact of their giving. At the 2013 DIAP Conference for ATS, Penelope Burk, a recognized leader in development strategy, commented that in her opinion all giving should be directed. She connected it to the importance of relationship development and what she calls ‘donor-centered fundraising.’

ATS data shows that giving for current operations often fluctuates. Our recent peer studies show that the annual fund is very unpredictable. I believe we need to be strategic about how we ask people to participate in God’s work through giving. A friend of mine always says, “The best time to ask for a temporarily restricted gift is when we need it.” I couldn’t agree more, but I would add that we always need them. We often find ourselves saying, “But we don’t have projects to which people can give. We just need money to pay the bills.” We fall into the trap imagining the annual budget as one giant bucket of expenses that needs to be filled with revenue…and there is a hole in the bottom of the bucket.

Be Strategic
Instead, let’s be strategic about our budgets and our planning. A budget is nothing more than a collection of expenses which should be tied to strategic plans. If we cannot tie our expenses directly to portions of our strategic plan, then we have other issues. Let’s assume, however, that our strategic planning process is in place and that our budget process flows from our strategic plan. Therefore, the budget is in fact a collection of expenses related to specific projects. We need to be strategic about creating giving opportunities related to those projects. Rather than seeing the annual budget as a giant bucket, let’s see it as a mixing bowl. The individual projects are the ingredients that are placed in the mixing bowl. Instead of asking for a million dollars for the bucket and being unable to tie specific gifts to specific impact, let’s ask for specific ingredients or projects which together comprise the budget.

Be Relational
Once we are able to see our budgets as a mixing bowl rather than a bucket with a hole in the bottom, we can fully realize the value of integrated relationship development.  Our relationships should help us understand the passions of our givers. Their passions will drive their giving. It is our job to present opportunities where they can be generous toward God while being involved in their passion. Developing such relationships enables us to learn more about those that support our institutions and therefore connect them to specific projects. I believe relationships are the key to unlocking the potential for directed/TR giving. It is an area of growth within theological education, and it will continue to be so. I think we can create more predictable growth if we are simply more strategic about how we approach giving.

What have you seen at your institution? Are people more interested in directed giving? Are your development efforts tied directly to your strategic planning process? Am I asking for too much?

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