Universities spare fund-raisers amid budget cuts

March 27, 2010

Even amid bleak economic conditions, raising money for universities turns out to be a pretty safe line of work.

The Indiana University Foundation, which manages a $1.2 billion endowment, recently cut 18 of 201 staff members in a second round of budget cuts. At the same time, foundation President Gene Tempel said he wants to add reinforcements in fund raising.

Tempel said he’s examining the foundation’s and university’s combined force of fund-raisers and asking, “What kind of staff do we need to be at the top of fund raising when the economy recovers?”

At Purdue University, which has a $1.7 billion endowment, interim Vice President of Development Robin Bellinger said she’s done everything possible to avoid layoffs while following a university mandate to cut expenses 3 percent. She said she doesn’t expect to cut staff in the next fiscal year, either.

“We’re just looking at everything we can,” she said. “We don’t want to make decisions that won’t have a negative impact on future gifts and support.”

Most colleges and universities have avoided cutting the people who work face-to-face with donors, said Rae Goldsmith, vice president of advancement resources at the Council for Advancement and Support of Education.

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“They’re recognizing they can’t pull back on an area that raises quite a bit of revenue for the institution,” said Goldsmith, who is based in Washington, D.C.

The endowments at IU and Purdue rank in the top 15 among public universities.

At the end of June, IU will conclude a $1.1 billion campaign, begun in 2003, called Matching the Promise, to support scholarships, fellowships, teaching positions and research facilities.

Purdue is in the midst of its seven-year, $304 million Access and Success campaign for student scholarships, launched in 2007.

The IU Foundation would not detail the types of jobs it eliminated earlier this month, but they likely weren’t in fund raising. The foundation, which is a separate charitable organization, directly employs about 25 people in that capacity. The bulk of IU’s front-line fund-raising staff, about 100 people, is on the university payroll and works directly for various schools and colleges.

Most of the foundation’s work is in investment management, prospect research and gift processing.

Tempel said IU did not build up its fund-raising army during the Matching the Promise campaign.

Although IU expects to surpass its fund-raising goal, Tempel believes some prospects may be overlooked. He said he’ll spend the next several months meeting with deans to persuade them to spare fund raising in budget cuts, and possibly add more personnel.

“We have to show them return on investment,” he said.

The IU Foundation is cutting its own expenses because of investment losses suffered in 2008 and 2009. As of June 30, 2009, the endowment was worth $1.2 billion, down 20 percent from the prior year. That figure includes money raised throughout the year.

About 56 percent of the foundation’s budget comes from a 1-percent management fee on endowment assets.

The foundation receives another $4.9 million from IU as a “development services” fee.

The current budget of $26 million is down 10 percent. The recent layoffs will help cut an additional $2.4 million by the end of the current fiscal year, spokeswoman Barbara Coffman said.

Purdue’s endowment, which includes non-real estate assets of the Purdue Research Foundation, was worth $1.7 billion at Dec. 31. Purdue manages its investments in-house.

Fund-raisers and related personnel also are on the university’s payroll, so their activities have been more affected by university-wide budget cuts than investment losses.

Bellinger said the Office of Development, which has a $12.3 million budget, has left positions unfilled and cut its travel expenses. The office also relocated its telemarketing program to save $45,000.

Purdue has about 50 development officers working with its various schools and colleges, plus another crew of fund-raisers working on campuses around the state.

“It’s not the time to slow down,” Bellinger said. “If anything, it’s the opportunity to reach out and build new relationships.”•


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