This is an excerpt from Administration of Intercollegiate Athletics by Erianne Weight & Robert Zullo.
As ample research indicates, donors give for a variety of reasons (Billing, Holt, & Smith, 1985; Gladden, Mahony, & Apostolopoulou, 2005; Mahony, Gladden, & Funk, 2003; Staurowsky, Parkhouse, & Sachs,1999; Strode & Fink, 2009; Tsiotsou, 1998). For example, they may want to receive personal recognition, memorialize a friend or family member, influence decisions, socialize or affiliate with the university or other supporters (e.g., attend sport events with friends and family members), receive tangible benefits (e.g., priority ticketing, parking, and access), satisfy their philanthropic motives, or enhance the program’s athletics success. Indeed, Strode (2009) found that donors believe their support of an athletics department could yield success for a team. In turn, such success heightens a donor’s affiliation with the program.
Development staff members should consider these various motivations. Simply providing access to premium tickets is not sufficient. In a cautionary example, Arizona State University’s Sun Devil Club consisted of 12,500 active donors in 2008. By 2010, however, membership was down to 4,000, and the drop cost the organization almost US$4 million (Steinbach, 2012). Self-analysis by the organization found that the group had relied too heavily on premium seating as its primary means for raising funds.
To achieve healthy department - donor relations, it is crucial to understanding the motives that drive giving. Tim McMurray, associate athletics director for development at Southern Methodist University, indicates that "what really separates a good development officer is if you can get to the root of the no. Is it no to timing? Is it no to the amount? Or is it no to the cause? If it’s one of the first two, that’s forgivable. We can work around that - we can get into payment plans or we can lower the amount of the ask. If it’s no to the cause, then we’ve got work to do internally. People have to feel good about your cause" (Steinbach, 2009).
In addition, the cause itself can vary. For some donors, the cause is team success, whereas for others it is helping student-athletes achieve an education. Therefore, it is vital to listen to donors, because giving is not a one-size-fits-all endeavor. More specifically, segmenting donors based on motivation can benefit fundraisers in the following ways (Tsiotsou, 2007):
- Provides the base for targeted fundraising
- Helps develop more effective marketing mixes in order to motivate specific donor segments
- Facilitates cause differentiation
- Enables marketing strategies targeted toward specific motivational groups
- Enables shaping of fundraising tactics to optimize results
- Provides easier identification of fundraising opportunities and threats
Ten Ways to Blow the Ask
- By Marija Pientka, associate athletics director for development, University of Wisconsin - Madison
If you’ve been in this profession for long, you’ve probably stumbled your way through an ask or two - and have learned lessons to improve for the next time. Prior to your next prospect meeting, check to see if you’re committing any of these common mistakes before you blow the ask.
Mistake 1: You don’t present the "right" project.
We’ve all been there. The athletics director sets a "priority," and there’s pressure to meet the fundraising goal.
This might seem obvious, but you must do your homework on every prospect to ensure that the project you’re presenting really speaks to that individual. If a prospect gets excited about programmatic support, presenting a bricks-and-mortar facility project - even if it’s the priority of your athletics department - can really be off-putting to the prospect. It shows you haven’t taken the time to get to know him or her. Be sure that the project you’re presenting is something the prospect has a genuine interest in, and you’ll be much more likely to secure a commitment.
Mistake 2: You don’t ask for the right amount.
Asking for the right amount is just as important as finding the right project.
Prospects rarely get offended if you ask for too much. Most people are flattered that you think they’re capable of such a gift. And a high ask can raise someone’s sights. But asking for too little shows you haven’t prepared properly, which can derail the development process.
Mistake 3: You didn’t sufficiently prepare the prospect for the ask.
No one likes to be caught off guard by someone making an unexpected request - and that goes double for solicitations.
Be sure to lead your prospects to a point where they know you’re going to ask for a significant gift. Make sure they’re ready to seriously consider such a request. When the time for the solicitation comes, you might not even have to ask for the gift; the prospect will understand why you are there, what size gift you are seeking, and what the gift will support.
Mistake 4: You exclude important people from the ask.
Although you might be more comfortable making an ask during a one-on-one meeting - less of an audience, right?!? - be sure that you don’t exclude someone who might play an important role in the donor’s decision-making process.
Does your prospect consult with a spouse, an attorney, or an accountant? If so, ask if that individual might be included in the meeting. It can be very frustrating to finish a solicitation only to learn that someone who’ll be part of the decision was not present.
Mistake 5: You "wing it" during the solicitation meeting.
When you, your athletics director, and the prospect get together and start talking, you hope the ask might just "naturally" happen. But there’s a good chance it won’t, especially if the dollar amount is very significant.
Before the meeting, be sure to map out a plan for how the conversation will unfold. Determine in advance who will state the need, put the ask on the table, and outline next steps at the end of the meeting.
Mistake 6: You waffle when making the ask.
You’ve put a great deal of time and energy into developing a positive relationship with the prospect. When the time comes for an ask, don’t back down. If you don’t ask, the prospect won’t give.
Think of it this way: you’re offering the prospect an opportunity to invest in your program. Prospects often appreciate having interesting ideas brought to them for their consideration. So move forward with confidence and conviction - seasoned with humility - and you’ll see positive results.
Mistake 7: You stick blindly to your agenda.
Despite your best preparations, sometimes the ask meeting will veer in an unexpected direction. If you’re thrown a curve ball, be flexible and try to salvage the meeting as best you can.
But don’t be so determined that you steamroll past the issue at hand, potentially offending your prospect and damaging the chance of a gift in the future. If you can’t get back on track, you might say to the prospect, "You know, I came here today to discuss a significant commitment to the athletics department. Why don’t I address (the immediate concern) today, and then we can schedule a time to talk further about the campaign."
Mistake 8: You pressure the donor for a commitment.
When you make an ask, know when to stop talking and patiently wait for a response.
Your prospects are successful, educated people. They gather information, process it, and make careful decisions. When you ask for a significant investment in your institution, they’re going to need time to think it over. If you insist on walking out the door with a signed pledge agreement, you may find yourself leaving empty-handed. Instead, put a proposal on the table and give the prospect time to mull it over. This approach might even yield a greater gift than one he or she can agree upon immediately.
Mistake 9: You promise donors things you can’t deliver.
It’s easy to get carried away when describing the recognition or special treatment a donor might receive in appreciation for a gift. If you can’t get the donor on the team plane for the Rose Bowl, don’t offer it. It’s better to under-promise and over-deliver.
Mistake 10: You announce the gift prematurely.
You’ve just received a commitment, and you’re bursting with excitement! But be sure everything is in place before you announce the gift, lest the news travel back to the prospect prematurely. This could not only upset the prospect and jeopardize his or her commitment; it could also create a problem for the campus if for some reason the gift does not materialize.
Reprinted, by permission, from M. Pientka, 2009, Best practices: 10 ways to blow the ask (National Association of Athletic Development Directors). Available: www.nacda.com/sports/naadd/spec-rel/101609aak.html.
Benefits of Giving: Priority Seating and Parking
Ideally, demand for premium seating is greater than availability, thus creating a "tough ticket" and enhancing the urgency that donors feel to contribute (Steinbach, 2005c). With this potential motivation in mind, athletics departments often tie giving to the privilege to purchase premium seating (or any seating). For example, to gain the opportunity to purchase two tickets to an Ohio State football game, it is necessary to donate at least $1,500 to the Buckeye Club.
Supporters of the athletics department also have the opportunity to make contributions to the department that provide them with other benefits, including premium seating. Benefit points can be based on the contribution amount and on the number of years for which a contributor has given, thus rewarding loyalty (Berman, 2011). Development software can be used to help development officers and donors evaluate the benefits that accompany various levels of donation while also preserving the integrity of the process such that it becomes more transparent to staffers and donors alike (Steinbach, 2003).
Sitting courtside at University of Georgia basketball is the closest thing to being a part of the game without playing or coaching in it. Unless you are sitting on the bench with the team, it is the best way to feel and see all the energies, efforts, and emotions of the players and coaches before, during, and after each game.
Frank Beltran, men’s basketball courtside seat holder (qtd. in Center, 2010)
Donors frequently ask, "Who gets better seats - those who give more or those who give longer?" It is vital for development offices to remember the long-term value of a season-ticket holder who contributes annually but not substantially (Mahony et al., 2003). Annual contributions from such donors opens the door to continuous revenue through ticket sales, parking fees, and concession and merchandise sales at sporting events. Thus it is important for athletics departments to recognize not only amount but also longevity in annual giving.
Fans who desire better seating or premium seats can be encouraged to donate at a higher level and to keep giving annually in order to retain their premium seating benefits. Contributions for premium seating (e.g., suite, club level) may also give donors access to areas that allow alcohol consumption at sporting events and invitations to closed dinners with team and staff members (Center, 2010).
Contributions also offer tax benefits, because institutions of higher education are considered nonprofits, which means that donations are fully deductible at their fair-market value (Howard & Crompton, 2003). Deductions can total up to 30 percent of an individual’s adjusted gross income, and donations beyond that level can be allocated to the individual’s adjusted gross income over the next five years (Howard & Crompton).
Donors who give at higher levels can also earn premium parking close to the athletics facility. Such parking allows fans to tailgate close to the event and to arrive closer to the starting time of a game since their space is reserved. Thus it is another premium benefit that can be used with priority ticketing to catalyze fundraising.
Ways to Give
When donors think about supporting athletics, they may initially believe that cash is the only way to contribute. In fact, however, donors can support athletics in various ways, including donations of real estate, investments, employee donations, and more. Contributions can be part of a major gift, a capital campaign effort to raise a substantial amount of funds, or an endowment program that funds a scholarship or other expense item. Additional forms of giving include deferred giving and matching gifts. Smaller forms of giving include purchasing a brick toward a building project, participating in a silent auction, or even taking part in a camp held by an athletic team. Development officers should work diligently to ensure that all types of contribution are encouraged.
Fundraising involves relationship building with donors who believe in a cause; as a result, it takes time and involves an extensive process (Lindahl, 1995). By cultivating a relationship with a donor, the development office can gauge whether the donor wants to support a specific athletics program or athletics in general. In other words, donors have the option of contributing either restricted or unrestricted gifts. Unrestricted giving, which is preferred by a development staff, enables the school to use the funds for any purpose (Humphreys & Mondello, 2007). Restricted gifts, on the other hand, are earmarked for a specific purpose.
Major gifts can be used to reduce the expenses associated with facility construction or renovation. For example, the University of Virginia built a new track-and-field facility thanks in large part to a lead major gift of US$5 million (Troudt, 2011); similarly, Southern Methodist University used two lead gifts to enable renovation of its coliseum (Leonard, 2011). With renovation expenses expected to reach US$40 million, the project was funded largely through the two gifts - a US$20 million gift from a foundation and a US$10 million gift from a former student-athlete (Leonard).
Stadium and arena construction and renovation provide the most visible projects, but major gifts can also be used to facilitate work on other projects, such as locker rooms and premium seating areas. The same University of Virginia donor who contributed to the track-and-field facility also contributed US$1 million to facilitate the renovation and improvement of the women’s volleyball locker room and training facility. Major gifts can also facilitate enhancement of weight rooms, training tables, and academic facilities, thus supporting student-athletes in their wellness and their studies. In other examples, a US$3 million lead gift enabled Northern Illinois University to start construction on an indoor practice facility (Scissors, 2011), and a lead gift enabled Indiana University to open a modern academic learning center for student-athletes (Dolson & Bomba, 2011).
Endowment programs enable development offices to cultivate funds from donors, invest the principle, and use the interest to cover annual operating expenses in perpetuity (forever). Given a 5 percent interest rate, an endowment donation of $250,000 would yield an average of $12,500 per year. Endowment funds can grow more quickly in a bull market, thus providing considerable interest. Covered expenses can include, for example, the cost of scholarships, coaches’ salaries, facility upkeep, and operational budgets. In return for the donation, the donor may be recognized in various ways, depending on the expectation set by the school, but it often includes a naming opportunity for the endowment.
One example of a successful scholarship endowment program can be found at Boston College, where the cost of an athletics scholarship was US$53,500 in 2011. With 272 scholarships committed to student-athletes, the school needs to generate funds targeted for this considerable expense (Foley, 2011). To meet this need, Boston College uses an endowment fund supported by an annual donor luncheon on a home football weekend where student-athletes, coaches, and school administrators meet the donors who support them. The personal interaction continues with thank-you notes and updates from student-athletes coordinated through the development office. The program enabled Boston College to increase its total of endowed scholarships from 31 in 2005 to 162 by 2011 (Foley).
Stanford University has used the endowment model to generate a substantial revenue stream when the economy is sound. Because endowment investments are prone to the same volatility that characterizes investments in general, they can be affected by an economic downturn. Stanford was no exception during a downturn a few years ago, when an athletic endowment of US$520 million was reduced to US$410 million in the course of one fiscal year (Schlabach, 2009). Oklahoma State athletics suffered a similar loss when a gift of US$165 million from T. Boone Pickens peaked at US$400 million but collapsed to US$125 million in a bear market (Steinbach, 2009).
Another issue that arises in endowment programs hinges on the fact that donors tend to support highly visible sports, such as football and men’s basketball, which offer a widely desired affiliation with high-profile athletes and coaches. Even so, targeted cultivation and stewardship can yield positive fundraising results across all sport teams. At Boston University, Clifford and Jill Viner offered their financial support for two athletics scholarships, including one in swimming and diving. They described their thinking in this way: "We believe in offering support to anyone whose lives we can touch. Athletics builds teamwork, camaraderie, discipline, and commitment. All of those characteristics will serve a person well throughout life, in business, in pleasure, and in learning how to work together" (qtd. in Ring, 2010a).
Athletics departments work with their academic counterparts via capital campaigns to address the school’s capital, operating, and endowment efforts over a limited time frame. The establishment of a board of supportive donors initiates the process, which also includes the recruitment of other donors in a private or "silent" phase. For example, the University of New Mexico athletics department was charged with raising US$75 million as part of an institutionwide fundraising effort based on the theme of a Lobo Leap to Excellence. Lead gifts from NBA player Danny Granger and NFL player Brian Urlacher, both alumni, enabled the campaign to start with US$1 million (Ryan, 2010). This silent phase allows time to solicit major financial commitments in order to build fundraising momentum for a more public phase.
Penn State initiated a capital campaign titled For the Future: The Campaign for Penn State Students as part of a concerted effort to create a prosperous future from an operational and competitive standpoint. Although the campaign targets overall enhancement of the university, the fundraising arm of the school’s athletics department was expected to raise US$225 million as part of the larger campaign. The athletics funds will be allocated in the following manner (Gimbl, 2010a).
- Scholarships - $140 million
- Coaching endowments - $10 million
- Facilities - $70 million
- Program endowments - $5 million
As Tsiotsou (2007) has stressed, campaigns centered on increasing a university’s prestige can help build donors’ motivation. Prestige can be measured both quantitatively (e.g., in terms of winning percentages, championships, and graduation rates) and qualitatively (e.g., through placement of alumni and other personal success stories) (Tsiotsou, 2007). Campaign themes should also emphasize the fact that donors’ gifts help the school build resources that are comparable to, if not better than, those featured by their counterparts - both academically and athletically (Ford, 2009; McGinniss, 2011; O’Brien, 2010; Stanley, 2009).
To enhance a campaign’s chance of success, a school can divide it into phases (Terrell, 2010). Doing so enables the school to prioritize its needs and reassess the level of contributions. At the University of North Carolina, for example, phase I of a football stadium renovation focused on the Kenan Football Center, which affected the program’s daily operations. Phase II emphasized the stadium enclosure, the addition of premium seating, and the updating of concourse amenities (Terrell, 2010).
Matching Gifts and Employee Giving
The process of employee giving can be simplified through payroll deduction, and employees who give can be recognized at an annual luncheon. Many employers will match an employee’s charitable donation, though certain employers will not match a donation to an athletics department; some of these, however, can be persuaded to match donations earmarked strictly for scholarship purposes (Howard & Crompton, 2003). In one example of successful employee giving, Monmouth University strives for 100 percent participation in its employee giving campaign, meaning that every employee contributes to the athletics fund. Indeed, in 2009 the school achieved a 100 percent participation rate among 81 part-time and full-time employees, yielding US$28,000 for the annual fund (Wulfekotte, 2010).
Real Estate and Investments
Donations of real estate and investments offer the donor relief from long-term capital gains taxes (Howard & Crompton, 2003). The tax reduction depends on how long the donor held the asset before donating it. The maximum capital gains tax rate is 20 percent of the increase in the value of the real estate or investment from the point of original purchase to the point of selling it (Howard & Crompton). The tax rate decreases if the asset is held longer than a year and decreases further if the asset is held longer than five years. However, by donating the asset rather than selling it, the donor eliminates the tax completely
Deferred and Planned Giving
Deferred giving, accomplished through contributions that take effect after one’s death, may sound morbid, but it is a common form of donation, particularly among passionate supporters who want to leave a lasting legacy (Kegler, 2010). Planned giving can include wills, trusts, insurance policies, and annuities. Because the athletics department, a nonprofit entity, is named as the recipient, the donor’s estate does not have to pay state or federal inheritance taxes on the donated assets (Howard & Crompton, 2003). Life insurance policy gifts also offer value to an athletics department provided that the premiums are paid in full and the athletics department is listed as the sole beneficiary. Trusts can be used to provide a fixed annuity to the donor until his or her death, at which time the remainder of the trust benefits the athletics department.
Auctions, Bricks, and Camps
Smaller contributions can also be garnered through targeted events or campaigns, including auctions, building bricks, and camps. Auctions, either online or in-person, can feature such items as access to special events, coaches, and game-worn apparel. The University of Indianapolis also includes merchandise from sponsors, ranging from oil changes to condo rentals, to deepen its online auction offerings (Riley, 2010). Some athletics departments outsource auctions to a third-party firm, which may charge a fee for its services, take a portion of the generated revenues, sell banner advertising around the auction, or implement an entry fee for donors who want to participate (Popke, 2008).
Brick campaigns draw funding by enabling donors to personalize a brick for a walkway or plaza to commemorate their contribution. Louisiana State University uses a brick campaign in which donors’ bricks are placed near the home of Mike the Tiger, the school’s mascot, a Bengal tiger that lives on campus (Mike the Tiger, 2013). In this way, a brick that costs the school $10 or $20 can be marked up in value, thus earning the school considerable revenue through a cost-effective commemoration (Bynum, 2004).
Additional revenue can be generated through special events, such as fantasy camps for both men and women. Many fans will pay to play side by side with past greats or to be coached by a well-known head coach. Offerings include football camps for women, parent-and-child camps, and alumni outings such as golf tournaments (Zullo, 2011).
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