The director of development and the vice-chancellor or principal must work closely together in partnership, and the organisational structure must make this possible.

Whilst it is not necessarily essential for the development director to report to the leader on operational matters, discussions around development strategy and implementation must be held directly with the institution’s leader.

On operational matters, a director of development might report to another principal officer, such as the director of administration or the registrar, or to a director of a related discipline, such as finance, operations or marketing.

The director of development will need strong working relationships with all members of the senior team – finance, operations, academic leaders, estates development, student representatives and marketing. Therefore, to establish credibility and forge these relationships, the director of development should be included in the highest-level senior management team. This will also enable him or her to become conversant with the institution’s overall strategy and advise how it might successfully relate to fundraising and other advancement activities.

Working with the leader of the institution, the director of development should maintain regular contact with the institution’s advisory board or governors in order to secure their support.

Most important, the institution must incorporate development activities into its strategic planning and ensure that these activities are featured in the operational plans of each department across the institution.

Action Items

• Determine who the director of development will report to and how he or she will regularly engage with the senior management team and the advisory board or governors.
• Ensure development activities are incorporated in the strategic and operational plans of the institution.

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Key working relationships and links with other offices/departments
Building a cadre of support

For development and fundraising activities to be successful, they must be embedded across the institution.

Fundraising is both a team-based activity and the shared responsibility of every office/department. It should be included not only in the institution’s overall strategic plan but also in the individual strategic and operational plans of every office or department.

By embedding fundraising in this way, the institution will find it easier to develop appropriate fundraising projects that can add real benefit to its strategic goals. It will also be easier to identify and exploit new opportunities that might otherwise go unrecognised.

Development activities may be a new undertaking for many departments. Recognise that you are asking others to engage in something new (and potentially outside of their comfort zone), as well as adding to their workloads. Provide context for why development activities are important for the larger institution, offer training where appropriate and celebrate success often. Championing the development office is an ongoing activity.

Whilst every department has a role to play, there are some key areas with substantial crossover:

• Academics need to engage in fundraising and promote their specialist areas. They can assist in project development and the cultivation and stewardship of prospects.
• The vice-chancellor/principal’s office is an important ally for the development team, helping to manage the time of the institution’s leaders and engaging them in donor cultivation and stewardship.
• Alumni relations, marketing and communications need to work closely together to ensure they promote consistent, effective messages about the institution and leverage one another’s resources and activities.
• The finance office assists with gift processing, accounting and reporting to help set fundraising targets and to ensure that project funding flows smoothly.
• The careers office can build strong relationships with companies and alumni.
• Student recruitment and international student recruitment efforts can benefit from strong relationships with alumni and the establishment of bursaries and scholarship funds.
• The members of current student organisations (unions, clubs, etc.) are the alumni of the future. Whilst at the institution they can assist with fundraising, benefit from funds raised and form beneficial relationships with alumni.
• Estates development can contribute to the identification of fundraising projects and are often recipients of fundraising income (to support capital projects).
• Enterprise/commercialisation activities and fundraising generate a great deal of synergy. Both require long-term relationship management to be successful and are externally focused, and both benefit from cross-marketing and the sharing of information.

Action Items

• Make sure that development activities are in the institution’s overall strategic plan, as well as in the individual strategic and operational plans of every office/department.
• Focus on building strong relationships with the departments where there is substantial crossover, and ensure that key departments understand the needs of the development function and are equipped to support it.

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Role and importance of alumni relations
Reporting lines and organisational structure
Championing the office internally
Building a cadre of support

Recruiting a strong director of development is one of the most critical elements of starting a development office.

As with most senior-level positions, it will take time and can be challenging to find the right person to fill the role, especially if an institution is new to development activity. It is helpful if the director is recruited early on, so he or she can set the vision and strategy with intuitional leadership and lead the recruitment of other team members.

Recruit from the widest pool possible, looking at comparable sectors (charity, sales and marketing), overseas candidates and others who might have the skills and experience you are looking for. Avoid the trap of looking for someone who only has experience of established, large development offices, as that person may not have the innovative, entrepreneurial spirit to lead a start-up activity successfully.

Some skills and characteristics you need to look for are:

• A track-record of successfully securing gifts, with the confidence to make asks and close deals,
• An ability to develop strong interpersonal relationships and genuine interest in other people,
• Good communications skills – speaking, writing and listening,
• A strong strategic thinker,
• Excellent management skills and the ability to motivate others and build strong teams,
• Excellent organisational skills and the ability to absorb, process and prioritise large quantities of information,
• A commitment to education and an empathy with academics and
• Resourcefulness in the face of limited resources and staff.

Setting up Your Development Director for Success

To provide development directors with a strong basis from which they can succeed, ensure that honest and open discussions form part of the recruitment process. Be clear, not only about the skills desired and expectations of the role, but also about the status of development activities at the institution and the resources available.

Sharing information about the institution during the interview process will help to gauge the validity of the candidate’s vision and his or her ability to prioritise suggested strategies. It will also help the candidate develop realistic expectations around the role.

An early, strong induction programme will enable the director grow her knowledge of the institution rapidly and develop effective working relationships with colleagues. The director will need:

• Regular and substantial input from the institution’s leadership and other senior colleagues,
• Realistic expectations, as he will have a great deal of work to do before beginning to raise significant funds, and
• Adequate resources and the basic tools to support development activities.

Action Items

• Recruit the director of development early on when establishing an office.
• Work closely with human resources – seeking the advice of other institutions and professionals – to clearly define the skills and characteristics of the desired director.
• Be clear about your expectations and vision for the role when hiring.
• Ensure the recruitment process is followed by a comprehensive induction period.

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Reasonable expectations
Reporting lines and organisational structure
Measuring and managing performance
Recruiting the right people
Characteristics of a successful fundraiser

Using Consultants

As happens any time the institution engages a consultant, you need to consider carefully if using a consultant will bring you closer to your goal, if this approach is the best use of your budget and if the institution would be better served by cultivating the skills of current staff through an investment in training.

Development offices tend to engage consultants more often than most other offices to:

• Fill a gap in knowledge (because of the vast constituencies served and areas that one can specialise in, such as legacies, events, government funding, etc.),
• Offer counsel and advice (e.g., lead a feasibility study or a campaign),
• Help with peak workloads (e.g., events, campaigns) and
• Take on a task that is best suited for an external consultant (e.g., having off the record conversations, leading a feasibility study, etc.).

Consultancy support can benefit an institution in many situations.

• Consultants can bring an objective point of view and tackle difficult issues without becoming embroiled in internal politics.
• External prospects, donors and partners often will speak more openly with a consultant, as he or she is one step removed from a frank conversation with the institution.
• Typically, consultants are highly experienced, bringing new perspectives and knowledge of what works and what does not and can often benchmark your activity against other comparable institutions.
• Consultants’ impartiality and credibility can be usefully employed to deliver difficult messages to people.
• Consultants have the ability to focus on the task outlined in the brief and should not be distracted by other calls on their attention.

Even well-established offices often find the independence of consultants or counsel helpful to optimise performance.

Activities Where Consultants Might Be Useful

Consultants can be useful in a number of areas, from the strategic to the very technical. Here are some suggestions:

• Feasibility studies
• Recruitment
• Data cleansing/mining
• Technical advice on database/information management systems
• Legal/finance operations (legacies, tax efficient giving, data protection, etc.)
• Fundraising strategy
• Establishing an annual fund
• Online communications
• Mentoring staff
• Training
• Helping with problem areas

You can use consultants to deliver one-off projects, on retainers providing ad hoc support or coaching for staff, to cover periods of staff absence, to deliver training or to provide additional capacity for advancement activities.

Getting the Best Value for Money

There are several well-known consultancy companies in the advancement field and numerous freelance development professionals. If you have a large-scale consultancy project in mind – such as a feasibility study – then you might want to consider a competitive tendering process.

The most important thing is to provide consultants with a clear, comprehensive brief. A good brief might contain:

• A contextual statement outlining why you need their help and what you want them to do,
• Some information about your institution and details of where they might find out more (website, annual report, etc.),
• What you want your main deliverable to look like (e.g., a detailed feasibility study assessing the institution’s current ability to commence fundraising and what investment might be needed),
• How you expect them to achieve this (e.g., through a mixture of quantitative and qualitative research),
• Who should be involved (e.g., which stakeholders),
• Schedules, milestones and/or interim deliverables,
• Any special requirements (e.g., presenting the report to the governing body),
• Details of who will manage the contract on behalf of the institution and the level of contact anticipated between that person and the consultant,
• Details of any information or additional support for the consultancy project that the institution will take responsibility for providing,
• Information about the skills, experience and attitude you expect the consultant to provide,
• A general budget (although you may want to leave out specifics if conducting a competitive bidding process) and
• A statement about confidentiality. (You might want to ask the consultant to sign a confidentiality agreement to protect the interests of the institution.)

Most consultants will be flexible on how their fees are structured. You could consider a day rate or payment against milestones or a fixed fee for the whole job. Be cautious of structures in which fees emerge as the project develops. Build in regular reviews or set a cap so that fees do not spiral out of control.

Risks

There are risks associated with using consultants, but these can be mitigated by researching who you use carefully, investing time in developing a comprehensive brief and closely managing the delivery of this brief rather than simply letting the consultant ‘get on with it’. However, it is worth noting the following risks:

• An institution can become over-reliant on a consultant, stifling the development of in-house expertise.
• If a consultant is on the frontline of fundraising, prospective donors may develop stronger relationships with the consultant than with the institution.
• Consultancy costs can overwhelm your budget.
• Your consultant might not tell you anything you did not already know.

Action Items

• Carefully weigh the pros and cons of hiring a consultant before doing so.
• Develop a brief so that all expectations are clearly agreed upon.

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Commissioning a feasibility study

Volunteer Advisory Boards

Separate from your institution’s governing board (i.e., board of trustees or directors), which is responsible for the overall guardianship of the institution's assets and management, the development office may elect to create a volunteer advisory board that focuses solely on helping improve the performance of fundraising.

Before establishing an advisory board, carefully weigh its role, the benefits of having such a board and the demands that will go with it.

Role and Benefits of an Advisory Board

Advisory board members should be your leading ambassadors, most loyal supporters, most trusted advisers and sternest critics. They can:

• Provide objective guidance and feedback on the development strategy,
• Identify donor prospects and introduce them to the institution,
• Cultivate prospects through events, campus visits, communications, etc.,
• Solicit prospects by helping the development director make the ask,
• Inspire prospects by becoming donors themselves and encouraging others to follow their example,
• Support stewardship activities,
• Assess the progress of development activities against the agreed milestones and help identify appropriate future action,
• Bring expertise and networks to supplement your in-house resources,
• Be your champion and help you develop your case for support and
• Bring prestige and credibility if well-known and respected.

Demands of an Advisory Board

Although there are many benefits to having a volunteer advisory board, be aware that this body can be extremely time-consuming from a management and administrative perspective, as you must produce appropriate paperwork, recruit members, provide training and organize service meetings. You must also offer your volunteers the highest level of stewardship.

Cautiously determine the best time, structure, size and responsibilities of the advisory board before creating one. Here are some questions you might ask yourself:

• Should you wait until after the start-up phase or do you need the support early on?
• Do you have a current donor who could help lead or chair the board (possibly one involved in the feasibility study)?
• Should you start with four or five members and then expand as you have the capacity to manage more people?
• Do you have a clearly defined role with a few key activities for a board to initially focus on?

Who Should Be on the Board?

Board members can be recruited from all occupations and backgrounds but should be representative of the institution’s stakeholders. They should be willing to assist with the development plan (primarily the identification and cultivation of donors outside of formal board meetings) and to offer relevant expertise or experience in fundraising.

You will need to decide whether every member of the board is expected to donate. If they do not give, there is a danger that the board will become a talking shop without any real sense of drive and purpose. (See below, "When Board Members Give.")

Typically, board members might be recruited from among the alumni, the local business community, long-standing donors or partners and other positions of influence, such as government. One to two members could also be drawn from senior staff within the institution, such as the vice-chancellor, chief operating officer or finance director, or from among senior academic staff. Most boards have between six and 15 members.

You can also set up subcommittees for individual large-scale projects, events or specific campaigns. By doing this you increase the number of opportunities for people to get involved and support your activities.

Creating an Advisory Board

If (and when) you decide to create an advisory board, the development director and institution’s leader should work together to:

• Clearly define and document the role, responsibilities and commitments of the board,
• Ensure there is a plan for creating and supporting the board, including the timeframe, prospects, communication strategy, objectives and benchmarks and staff responsibility,
• Determine the top candidate to lead or chair the board (and approach first) and
• Draft your ideal advisory board structure (to revise with the chair).

A well-run board should:

• Have a constitution,
• Meet regularly,
• Ensure that its members have ‘job descriptions’ and a thorough understanding of their role and responsibilities (particularly between meetings), as well as if there is a fundraising commitment,
• Provide adequate training and information to its members,
• Keep accurate records,
• Comprise a good mix of qualified people,
• Have limited terms of office of its members and
• Engage members in the work of the institution outside of meetings.

Action Item

• Together, the development director and institution’s leader should carefully determine the role and ROI (i.e., the benefits, risks, timing, support structures, commitment, etc.) before creating an advisory board. A board is a powerful resource, but only when managed and used well.

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Institutionally related foundations

When Board Members Give

A common feature of boards in the United States is to have an agreed-upon minimum financial contribution for each member to either ‘give’ or ‘get’ through other sources. Although a give/get commitment may not be the norm in your country, you may want to discuss this strategy when creating an advisory board.

One benefit: With even a very modest financial contribution from every member, your institution can relay to prospects that you have 100 percent giving from your board – providing credibility and inspiring confidence.

Institutionally Related Foundations

It is common for an institution to have a related foundation (e.g., the Loughborough University Development Trust or the University of Oxford Development Trust Fund). These foundations are dedicated to the support of a college, university or teaching hospital.

Although foundations may perform a wide range of functions, their primary purpose is to raise and manage private support for the institution with which they are affiliated.

Foundations tend to provide their affiliated institutions with guidance on which projects or purposes are most likely to appeal to donors and to cultivate support that will help the institution achieve its goals.

Why Are They Established?

• Institutionally related foundations provide a way of clearly separating state and private funds.
• They are subject to different financial regulations and legislation, which can be advantageous both to donors and the affiliated institution.
• Many donors prefer to donate to foundations rather than directly to state-funded institutions, as they feel reassured by the autonomy of the foundation and the clear delineation between philanthropic and state investment.
• Foundations provide additional opportunities to engage alumni and other influential individuals in the work of the institution as board members.
• A foundation board can maintain a long-term perspective on the needs and priorities of the institution, extending beyond the outlook and tenure of institutional staff and trustees who may be subject to a wide range of circumstantial pressures and influences.

Why Do Donors Make Gifts to Institutionally Related Foundations Instead of Giving to the Institution Itself?

Donors often feel more secure making a major gift to a foundation governed by individuals with extensive legal, business and financial management skills. Unlike college and university trustees, who are often politically appointed and have primary responsibility for institution policy, foundation trustees are recruited for their ability to raise and manage private support for the institution.

Foundation boards can operate in a businesslike manner and provide an engaging role for powerful and successful individuals who want to advance an institution. Foundation boards can ensure that gifts are used in strict accordance with donors’ wishes. Foundations can also serve to safeguard the privacy of donors who may not want the details of their personal finances to become a matter of public record.

How Are Institutionally Related Foundations Governed?

Like other charitable organisations, an independent volunteer board governs institutionally related foundations. In most cases, the leadership of the primary institution and/or other senior institution staff are included on the foundation board. A member or members of the institution board may also have ex officio seat(s) on the foundation board. In many instances, the chief executive of the foundation also holds a position within the primary institution. These arrangements help to maintain open communication between the foundation and the institution it serves.

Foundation board members support the primary institution in a variety of ways.

• They typically contribute personally, serving as leaders and examples for other donors.
• They help foundation staff with prospect identification, solicitation and stewardship.
• They may serve as advisers to institution and foundation staff and represent the institution to the media and legislature.

How Are Institutionally Related Foundations Accountable?

As public charities, institutionally related foundations are accountable to their donors, the students, faculty, staff and trustees of the institutions they serve. They also may be accountable to financial and legal regulators (e.g., the Charity Commission and HM Revenue and Customs in the UK).

How Do I Decide if I Need One?

The situation surrounding issues such as education funding and tax relief, to name but two, varies greatly between countries. Make sure that you understand your own context well. For example:

• In some countries it is feared (or genuinely the case) that any philanthropic income will simply be deducted from the next government subvention. This is not just counterproductive, but damaging. Channelling gifts through a foundation will avoid this.
• In some countries, gifts to education are not tax deductible, whereas gifts to a foundation are. In this situation, donors may be convinced to increase their level of giving if they can give via a foundation.
• In some countries, educational institutions are ineligible for certain public and private funding streams. Applying to these sources of funding via a foundation can overcome issues of ineligibility.

What Are the Drawbacks?

The administrative burden and associated costs of operating a separate legal entity should not be underestimated.

Also, the independent nature of the foundation can become an issue if the views and opinions of the foundation board and the institutional leadership diverge. This can lead to the foundation’s exerting undue influence over the institution or delaying institutional plans by refusing to release funding.

Formulating robust by-laws, articles of incorporation and gift agreements that retain the institution’s control over the foundation and reduce this risk.

Action Items

• Familiarise yourself with the constitution of any pre-existing foundation. Is it compatible with your purposes?
• Understand the legal and financial context for your institution. Seek professional advice if necessary.

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The value of fundraising in an educational context
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IRF Data Book: A New Benchmarking Tool for Foundations