Fiscal Year Forecasts
In the past few weeks, I’ve fielded phone calls from dozens of schools asking me what I’m seeing on the horizon. In a time when so much is unknown and finances are precarious, heads of school, CFOs, and boards are anxious for a weather vane to tell them where the winds will blow in a post-pandemic world. In the wake of these conversations, CASE launched a mid-year pulse survey (comparing results as of 31 December, 2020 to 31 December, 2019) to determine what was really going on with schools.
More than 100 schools responded from all over the U.S. and the world, and the results give us interesting insights into what is happening philanthropically at our schools. CASE is hosting a series of conversations about these results, but if you can’t make it to one of these conversations, here are some of the major headlines, along with my analysis of what’s coming next for schools.
Annual giving is generally up in FY 21.
About 66 percent of schools reported a year-over-year increase in annual giving, 16 percent reported “no significant difference,” and 18 percent reported annual giving was down. Those who reported being down as compared to last year hailed primarily from states and areas where forced school lockdowns meant that students couldn’t remain in person. Of those who reported being up as compared to last year, the average increase for boarding schools was 14 percent and the average increase for day schools was 9 percent. Anecdotal data suggests that schools that were able to remain in person this school year, and those that did an excellent job with communication and engagement, generally had more favorable fundraising results.
The donor is still disappearing.
For decades, fundraisers have been lamenting the disappearing donor. Giving may increase, yet it comes from fewer individuals every year. For FY21, the trend continues. While giving levels might be up, participation is not. For example, 54 percent of schools reported parent giving to be ahead of last year, yet the majority of schools (65 percent) reported that parent participation was either down or unchanged. The same is true from alumni populations, with only 36 percent of schools reporting an increase in alumni participation. For more information about alumni engagement, please see my post from earlier this school year.
Schools are in an emotional bubble.
It’s my belief that schools find themselves in an emotional bubble. We see enrollment and giving up nationally, in all likelihood due to the gratitude parents have toward an institution that could keep students in school with some semblance of normalcy. Anecdotally, schools report this to me all the time. New families flocked to schools when they were disappointed by the local public schools. Parents – even new parents – gave generously when they felt the school needed it. The trouble with bubbles is that they all burst. It is unrealistic to expect that all of these new families will remain enrolled or that any family will give at the level they have been when the perceived risk to the school’s financial state is mitigated and the urgency no longer present. It is my firm belief that schools should set conservative revenue goals for the coming year(s). Any good advancement officer knows to continue to ask for the largest gift possible from every donor, but setting lower goals to ensure a balanced budget is the wisest move as we wait and see how the emotional winds will blow in the coming year. Any unrestricted funds above that goal can go toward much-needed reserve funding for future crises.
Stewardship is everything.
In order to retain families and their gifts, we will need to engage in meaningful stewardship like we never have before. More than just thanking families in a timely way, schools must become adept at communicating the value and impact of a gift, repeatedly and in an emotionally compelling and specific manner. Moreover, we must steward our new engagement, too. If you haven’t already, seriously consider as a team what your management strategy is for the millennial alum who could potentially go from zoom event participant to meaningful donor in the next few years.
This pandemic does have silver linings, like increased giving and new engagement, but it will take significant work to move the philanthropic needle in a sustainable way. If we set our goals conservatively and we keep our advancement offices well-staffed, we can capitalize on opportunity on the other side of this crisis.
About the author(s)
Ann Snyder is the director of independent and international schools at CASE.