April 17, 2014


Annual funds in North Carolina inch back

The recession of 2008 and 2009 was hard on U.S. colleges and universities, which not only saw double-digit evaporation of their endowments, but a drought in charitable donations from individuals.

Higher education in North Carolina was no exception, but there are signs that the forecast is improving for schools' annual funds, a critical source of cash that for many institutions finance areas like scholarships and financial aid.

An informal sampling of about a dozen colleges and universities across the state suggests annual funds were off by about 14 percent in the fiscal year that ended June 30, 2009, the year that included the worst of the stock market implosion.

But in the fiscal year ended June 30, 2010, annual funds for the same set of schools were up about 9 percent over fiscal 2009, but still about 5 percent below fiscal 2008, the year that ended just before the markets crashed.

Because individual colleges and universities do not report or even define annual-fund giving in a uniform manner, the statistics from the Philanthropy Journal's informal sample simply suggest an overall trend that seems to indicate some forward progress.

That was the case for the University of North Carolina at Chapel Hill, where donations to the annual fund fell slightly from fiscal 2008 to 2009, but rebounded about 11 percent in fiscal 2010 to reach about $6.7 million, says Beth Braxton, director of annual giving for the school.

Part of that improvement came from leadership gifts, defined by the school as gifts of $2,000 or more, which grew 5 percent in fiscal 2010 after languishing in 2009, says Braxton.

Throughout the rough patches, Carolina stayed in touch with its donors to keep them informed about the school's condition, she says.

"When the state cut our budget, we let people know," says Braxton. "And with our endowment income being down, and an increase in students needing financial aid, it's really about communication."

North Carolina Central University in Durham saw a similar pattern, with annual-fund donations for fiscal 2009 sliding to $871,411 from $2.4 million in fiscal 2008.

But fiscal 2010 may herald a turnaround, with preliminary reports showing contributions up to almost $928,000.

"I see it as being on the upswing," says Randal Childs, director of major gifts for the school. "We need to continue communicating with our alumni in different mediums. And we're looking at estate planning as way of giving that's not a direct gift right now."

Wake Forest University in Winston-Salem has seen annual-fund donations improve, but is struggling to keep alumni participation strong, says Blake Absher, executive director of the Wake Forest Fund.

"We weathered it better than some others, but our donor numbers took a beating," he says, noting that 14,624 individuals donated in fiscal 2008, but only 13,577 gave in fiscal 2010.

Most of the attrition was among donors who give $250 or less each year, says Absher, who is working to lure those donors back.

"We're trying to refine the message and trying to be more targeted in our segmentation strategy," he says. "We need to see if we can find messages that work better for one group than another."

At the same time, overall donations to the annual fund at Wake Forest were fairly stable, with contributions totaling $7.3 million in fiscal 2010, up from $6.9 million in fiscal 2009, and surpassing 2008's $7.1 million.

Part of that solid performance could be due to the university's messaging strategy, which has focused on the impact of gifts rather than the school's internal goals.

But during fiscal 2009, the school also revamped its annual-fund structure, centralizing campaigns to streamline giving for donors.

Previously, the university's various schools were conducting their own annual campaigns on their own schedules, says Absher, and families with two alumni were getting separate fundraising requests.

Now they're getting a coordinated ask with the stronger Wake Forest brand, a strategy about which Absher is cautiously optimistic.

"I think people are holding onto their money a little tighter than they were," he says. "I don't think people's confidence is back yet. People are in a wait and see mode."


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