Recently I was reviewing a financial aid model with an investor, a program director and a development director. A few years ago the investor might have been called a donor, but today investor is a more accurate description. This person is an investment fund manager who wanted to learn more about the financial health of the school his daughter attended and the quantitative impact of his gift.

Throughout the meeting the development director beamed and nodded, and pointed out specific fundraising goals that tied back to costs identified in the model.  After the meeting she turned to me and said "fundraising people love these tools, because we can show the donor we have a plan for their investment and we can show the impact." I assured her that finance people love development people who think in terms of investment and use the laser pointer to highlight specific outcomes in the model.

Philanthropy is no longer a series of handouts and charitable donations. Donors are investing in sustainable educational institutions and successful fundraisers are securing gifts by demonstrating a strong return on investment. A financial planning model is one tool that can show investors how their funds will be put to work, who they will serve and the quantitative impact they will have on the institution. A compelling plan articulates the financial need and the broad, long-range return, demonstrating a readiness to put each gift to work.

This issue of In the Know discusses demonstrating returns on donor investments.

Education provides exponential returns for individuals and society. To attract funding from private and public investors (also known as donors and grantors), educational institutions need to demonstrate their returns to investors, by:

1.       Articulating institutional strengths and priorities - Invest in something important

Whether in campaign mode or a more subdued fundraising stance, fundraising requests should tie back to an articulated institutional vision and identified priorities. Show your supporters and potential supporters that the institution is shooting for some clearly defined and important goals. Their investments join a larger cause and further something important.

• Developing programs and physical spaces that inspire the whole child...
   

• Hiring and retaining outstanding faculty committed to student success and innovation...

• Preparing the global citizen...
   

Make the case for the school's value and provide a path for participation.

 2.       Providing options and specific plans for investment dollars - Invest in a solid and tangible plan

Some donors want to give to a general concept, and others prefer a more specific intention. All donors like to know that their investment will add value. An institution that can share well-crafted and specific plans for resources demonstrates that it is a worthy investment. The strong ask includes a business plan that details the use of the initial investment and the longer-range revenue and expense implications of the investment.

• $500 buys a SMART board for a classroom...

• $100,000 provides a scholarship to a deserving student who otherwise cannot attend...

• $25,000 upgrades a laboratory with modern research equipment and work spaces...

• $2 million funds a faculty chair...

Each investment is valuable and will immediately further institutional goals.

3.       Draw connections between investment dollars and a broader impact - Achieve returns beyond your initial investment

To be worthy of investment, institutions must have a dual focus on developing an internal community of excellence that continues to be a part of, not apart from, the world around them. The "investor's report" may be an annual narrative that reviews institutional results and discusses the future, a forward looking spreadsheet or a chart that demonstrates long-term sustainability. The important message, and one of the compelling aspects of schools, is that the institution is providing an investment vehicle that matters today and in the future, within its walls and far beyond.

• The SMART Board makes learning interactive and connects our students to the outside world...

• Our students go on to teach, heal and create jobs...

• The new laboratory will attract thousands of dollars in research grants and discoveries...

• The faculty chair will fund an educator and scholar who touches thousands of lives... 

The gift keeps giving. The investment returns far into the future.
 

Investment in education has broad reach and the costs of that mission cannot be shouldered by students and their families alone. By describing a compelling vision with a sustainable, financially grounded strategic plan, educational leaders can bring these outstanding investment opportunities to broader participants. Institutions can demonstrate how investors will further an important mission and generate returns that include a better informed and skilled citizenry, industry, discovery and opportunity realized through education.