From his office on the ninth floor of Wolverine Tower, Jerry May, the University’s vice president for development, commands the fundraisers who bring in hundreds of millions of dollars to the University each year.

Over the past eight years, the office has raised more than $3.2 billion through its Michigan Difference Campaign. The wildly successful effort — which exceeded its $2.5 billion goal by nearly 30 percent — set a national record for the most money raised in the United States by a public university during a single capital campaign.

However, with the campaign now finished and a new campaign not yet started, the question arises — what are development office employees doing with all their time?

According to May, his staff isn’t sitting around waiting for the next campaign. They’re busy planning for how they can better relate to donors and how the office can operate more efficiently.

THE BRAINS OF THE OPERATION

One of those major initiatives is the creation and implementation of a brand new, multi-million dollar electronic brain for the University’s fundraising activities. It’s a highly-personalized database that will serve to store and collate the most specific of details for the University’s donors — which totaled nearly 375,000 over the last eight years — from the basics to the most acute detail regarding their interests. (“Some day we’ll be able to know all the people who collect antique maps,” May said, only half joking.)

The University’s current donor database system — known as Development/Alumni Constituency System or DAC — is nearly 20 years old and is vastly outdated.

May said the system was evaluated prior to the Michigan Difference Campaign, and a decision was made to bandage it for the campaign. Major reconstruction or replacement of the system was tabled until after the capital campaign.

Once the Michigan Difference Campaign finished last December, efforts to select a firm to design a new system were kicked into high gear.

After evaluating several options, staff serving on committees and representing units throughout the office decided to use Blackbaud Enterprise CRM and Target Analytics to replace the existing system.

Though purchasing and implementing the new donor database will cost “several million dollars,” May said the new functions of the system will be well worth the cost.

“It’s not cheap,” May said. “On the other hand, if you keep track of people and you get a few million dollar gifts in the short period, you’re going to pay for it in no time.”

May also said the new system could help eliminate duplicate “shadow systems” that exist at several units across campus and hinder the office’s ability to get all their donor information into one centralized location.

“With all those shadow databases, then you have inaccuracy of the central records everybody depends on,” May said. “By spending several millions of dollars, we’re going to try to save the base long term,” May said.

The new system will provide greater flexibility to development officers by allowing them to do things the current system does not — including simple customization like donor title preferences and more advanced functions that will track donor interest areas.

May said that by having more complete and up-to-date donor records, development officers will be able to target donors who may have particular interests in certain projects. For instance, donor records could track certain departments and organizations that alumni were members of in an effort to help raise money for those units.

“We’re trying to personalize our fundraising, and the best way we know to do that is to have a system where we can sort people by interests,” May said, adding that virtually any interest could be tracked in the new system.

With the current system, May said the Office of Development is only able to create highly personalized relationships with a small fraction of donors.

“Right now, we’re very personal in our approach to about 25,000 of our alums and really in particular a little less than 10,000,” May said, adding the development office works closely with the 10,000 because they are some of the wealthiest donors.

With nearly 1.1 million donor records in the current development database, the development office only has highly personalized relationships with less than 1 percent of those in the system.

The new donor system is scheduled to be fully operational in 2012.

Elizabeth Woods, senior associate director of marketing and research for annual giving, said the new system will allow annual giving to better track and relate to donors.

Joseph Gagliardi, senior associate director of annual giving, added that the new system will allow the annual giving office to more easily track donor preferences like salutation requests and preferred means of communications.

“It’s going to open some new doors for us to be able to account for some of the information we have from our donors,” Gagliardi said, adding he thought doing so would lead to better relationships with donors.

IMPROVING RELATIONS

The Office of Development is also looking to improve donor relationships by creating donor stewardship guidelines.

May said implementing standards will help build and maintain relationships between donors and development staff. However, he said it’s too early to say exactly what the standards will include.

“We have a whole team of people University-wide who are working on a stewardship program,” May said. “We don’t know what those standards (will be).”

Though specific standards haven’t been adopted yet, May said they will likely include increasing communication between staff and donors, thanking donors for giving, helping donors plan future gifts and addressing concerns they may have.

“For instance, if somebody endows a scholarship with a $50,000 gift or $100,000 gift, they can expect that they’re going to be invited back to campus once a year, that they can expect to get a letter from the University saying ‘this is your student,’ and we may even have something where they can expect to get a letter from the student,” May said. “Just as an example.”

Another way the office is working to improve relationships with donors is through special events on campus aimed at thanking donors. Because the Michigan Difference Campaign has been completed, May said he viewed this year as an appropriate time to focus on thanking donors for their contributions.

“This year is the year to thank people, so we’re doing all sorts of different activities and events,” he said.

At the same time, the Office of Development is updating its wealth screening records in an effort to raise more money from donors. By updating these records, development staff will be able to more effectively target individuals for projects they are interested in and for which they have the means to make significant contributions.

THE NEXT CAMPAIGN

While seeking better relationships with current donors and updating information on potential donors may help the University to raise more money in private donations, nothing can top the level of giving that occurs during a major capital campaign.

The University has undergone five major capital campaigns in its history, with the first in the 1950s and the most recent finishing at the end of last year. Both the capital campaign of the 1990s and the one that ended last year set national records for the most raised by a public university at the time $1.37 billion and $3.2 billion, respectively.

In capital campaigns, it is not uncommon for individuals to commit multi-year pledges, meaning they will continue to make payments on a gift to the University after the fundraising campaign has ended.

This was the case with the last campaign and is one reason May said it would be inappropriate to comment on when the next capital campaign would be, though he admitted planning for the next campaign was underway.

“I’m trying to get us ready for (the next campaign),” May said. “I don’t know how to say this, but I’m trying not to get a headline that says ‘University of Michigan planning a campaign,’ because that comes off as disrespectful.”

In an interview earlier this year, University President Mary Sue Coleman said another capital campaign would be launched in a few years.

“Getting that philanthropic support is critical to keeping the University at the high level that it is, so there’ll be another campaign in a few years,” Coleman said.

Coleman stressed that even though the University may not currently be in a major campaign, the Office of Development is still working hard to raise private support for the University.

“When we finish a campaign, that doesn’t mean we stop fundraising. Full speed ahead,” Coleman said with a chuckle. “We keep raising money every year. We don’t stop.”

In her State of the University address earlier this week, Coleman praised the efforts of the development office during the down economy, but said that donations were falling because of the current economy.

“Our donors have been remarkably generous in recent years,” she said. “But donors’ investments have decreased just as have ours, and private support for the University declined 22 percent this past fiscal year.”

The development office raised about $340 million in the last year of the Difference campaign. But May says that annual fundraising revenue will fall to about $268 million for this past year.

May said the combination of the Michigan Difference Campaign’s conclusion and the decline in the economy were to blame for the drop in revenue.

“We’ve got the double whammy of the campaign ending and the economic downturn,” he said, adding it’s not unusual for either factor to cause a decrease in giving. “It’s actually quite normal to be off after a campaign and quite normal to be off in an economic downturn.”

Major gifts from donors — like bequests and life income gifts — have drastically decreased from the last fiscal year. Bequest expectancies declined from about $71.5 million in 2008 to $61 million in 2009. Similarly, more than $15 million in life income gifts were received in 2008 but dropped to nearly $5 million in 2009.

Despite the recession, the development office will continue its ongoing fundraising. May said staff will continue to raise money for projects that were priorities in the last campaign such as construction of the C.S. Mott Children’s and Women’s Hospital and a new addition to the Law School. The office will also focus on raising money for endowed professorships and scholarships.

“So far we’ve continued to stabilize our investment in fundraising because we’re in it for the long run,” May said. “We always have to do fundraising. You just don’t stop it and start it. You have to kind of keep it going as steadily as possible. “

The economy has affected each unit at the University differently, causing each to tailor its fundraising strategies. One unit, the Intercollegiate Athletics Development Office —which fundraises to support the University’s 25 varsity athletic teams — has focused its efforts on raising money to fund the construction of new athletic facilities.

Joseph Parker, senior associate athletic director for development, said the athletic development office has been working to secure commitments for the 82 new luxury suites being added to Michigan Stadium, as the change in the economy has caused members to shy away from asking donors to contribute large sums to the department.

“It’s not the appropriate time in many cases to have deep dialogue about a major gift commitment, so a lot of our focus in the last 12 months has been on the stadium project,” he said.

THE FUTURE OF THE OFFICE

Though the current economy may have short-term effects on the University’s fundraising, May said the long-run evolution of development operations is more important.

“I hope that we continue to treasure our relationship with the hundreds of thousands of donors that this University has had,” he said.

He added that he wants to see the Office of Development staff come up with “exciting” and “vital” ideas that incorporate the University’s resources to motivate people to donate.

“I think we need some ideas that are totally out of the box in terms of it may be a new center for something, it may be a new way of teaching, it may be a way of learning, it may be a new way of engaging people in other parts of the world,” he said. “Something that we don’t have a paradigm for yet.”

Leave a comment

Your email address will not be published.