UNIVERSITY FUNDRAISING:  SOME OBSERVATIONS AND COMPARISONS

 

 

As all of us are well aware, financial resources are critical to our educational, research, and service missions at George Mason. In economic terms, if there is no input, there can be no output: No one gets something for nothing.  Moreover, there is an increasing impetus for faculty to become more “entrepreneurial” by both the Board of Visitors and the central administration, i.e., faculty will be expected to do more to obtain grants and contracts to support their own research and professional activities as well as the university in general.  Thus, it is important for faculty to understand the nature and structure of Mason’s current fundraising operations. 

 

Financial support for our mission comes from two primary sources: Government and the Private Sector. Our concern herein is with private funding from individuals who and corporations and private foundations that give money to aid faculty research, bolster academic programs, provide student scholarships and fellowships, purchase equipment, and so forth. Although most donations are cash, some “in-kind” contributions may also be received. These contributions are generally channeled through the George Mason University Foundation, a nonprofit, tax-exempt, legally independent entity which exists solely to benefit Mason. Most universities have similar entities to raise funds from private sources; all such entities are designated as 501(c)(3) organizations by the Internal Revenue Service (contributions to entities so designated are tax-deductible); and the IRS requires that such groups file a Form 990 tax return each year. The GMU Foundation’s Form 990 for tax years 1997 to 2002 is online at http://www.gmu.edu/development/gmufound.html. The latest year available is 2002.

 

Since 2002, GMU has been (and still is) conducting a “Comprehensive Campaign” —  see  http://www.gmu.edu/events/campaign/home.html.  Rather than view the basic GMU Foundation financial data in isolation, the Senate’s former Clerk, Debi Siler, sought information from some of the SCHEV-selected “peer institutions.” This information is available in the Senate office (West Bldg. Room 257) for anyone to review.

 

A PEER GROUP COMPARISON OF UNIVERSITY FOUNDATIONS’ INCOME AND WEALTH

 

Two statistics are of critical importance: Total Income and Net Assets. Total Income includes all contributions, gifts, grants from all sources (including government), both cash and in-kind; rents; asset sales; gains (which can be negative if there are losses) on investments; dividends, interest, and so forth. Net Assets is the amount of money the foundation would have left if it paid all its outstanding obligations, that is, Net Assets is the foundation’s “wealth.”

 

Table 1 shows Total Income and Net Assets for the GMU Foundation for the years 1997–2002 (most recent available) and the same information for a dozen SCHEV-approved “peer” institutions’ foundations. Note that GMU Foundation’s Total Income fluctuates from year to year, as is true of all university-affiliated foundations. Thus, it is useful to use the average Total Income over the six-year period 1997­–2002, which is $17,292,023, as the basis for comparison with other institutions. With regard to Net Assets, the appropriate figure is $68,149, 623 — the


 

Table 1

Statistics on GMU Foundation and Twelve SCHEV Peer University Foundations, Various Years

 

 

 

 

 

University

Year

Total Income

Net Assets

 

 

 

 

SUNY - Albany

2001

$8,303,605

$28,868,484

 

2002

11,257,478

30,401,467

 

 

 

 

SUNY - Buffalo

2002

46,025,163

222,570,747

 

2003

78,607,576

231,576,819

 

 

 

 

Univ. of Connecticut

2002

38,759,483

241,970,707

 

 

 

 

Univ. of Iowa

2002

67,349,770

585,803,215

 

 

 

 

Univ. of Kansas

2002

27,305,762

808,519,745

 

 

 

 

Univ. of New Mexico

2002

22,091,743

77,395,572

 

 

 

 

Univ. of Oklahoma

2002

69,363,248

581,252,435

 

 

 

 

Univ. of Rhode Island

2002

12,544,131

69,037,412

 

 

 

 

Univ. of South Carolina

2002

15,088,079

190,603,004

 

 

 

 

Univ. of South Florida

2002

27,482,503

296,290,392

 

 

 

 

Western Michigan Univ.

2002

14,010,367

142,307,617

 

 

 

 

Univ. of Wisconsin - Milwaukee

2002

9,880,002

38,466,291

 

2003

11,884,781

41,334,375

 

 

 

 

 

 

 

 

George Mason Univ.

1997

25,031,546

55,726,964

 

1998

10,875,370

61,381,022

 

1999

10,504,790

61,689,879

 

2000

27,613,888

72,509,970

 

2001

15,529,312

66,694,540

 

2002

14,197,236

68,149,623

GMU Average 1997-2002

 

17,292,023

 

 


amount for tax year 2002, i.e., the most recent end of period figure.

 

As is evident from Table 1, in terms of Total Income, GMU ranks roughly in the middle of the 13 university foundations — on a par with the University of South Carolina Foundation which brought in $15.1 million in 2002. In terms of Net Assets, however, GMU ranks near the bottom, because only two universities — University of Wisconsin–Milwaukee and State University of New York–Albany — had lower Net Assets in 2002. GMU’s Net Assets are comparable to those at the University of Rhode Island and the University of New Mexico. Note that the level of Net Assets varies widely across this group of “peer” institutions: The wealthiest school is the University of Kansas with Net Assets of $808.5 million in 2002; the poorest is SUNY–Albany with $30.4 million in 2002.

 

Note also from Table 1 that the GMU Foundation’s Net Assets have not grown very much in the six-year period 1997–2002.  The $68.1 million in Net Assets held in 2002 is actually lower than the $72.5 million held in 2000; apparently the GMU Foundation’s investment portfolio, like most stock portfolios of similar organizations, fell in value when the dot.com stock market bubble burst. Between 1997 and 2002, Net Assets rose by 22.3 percent — less than 4 percentage points per year on average.  Although money is coming into the Foundation, apparently the funds are being spent almost as fast as they are coming in. Thus far, the nest egg that can be used for a rainy day or for future programs is not growing at a rapid pace.

 

FUNDRAISING COSTS AND BENEFITS

 

Fundraising is not a costless activity, although considerable sums are raised for the GMU Foundation and for the foundations at peer institutions at little or no cost when individual faculty or groups of faculty obtain outside funding from various sources to support their activities and process the funds through their university’s foundation. [Most private foundations which disperse funds will not make grants to an individual; most require that the grant go to a 501(c)(3) entity.] Administration and management of the GMU Foundation is also not costless, even though the University provides office space and other support services to the Foundation. For our purposes, the IRS Form 990 contains information on three categories of expenses: “Management and General”, “Fundraising” — the resources that the foundation uses for its operations and for fundraising — and “Program Services,” i.e., the funds which support the educational mission. Thus, the sum of “Management and General” and “Fundraising” expenses measure the resource “inputs” or “costs” associated with the foundation and its activities, and “Program Services” measures the “benefits” that the university derives from the foundation. A measure of relative “efficiency” can be obtained by looking at how many dollars of benefit are obtained from each dollar of cost, i.e., the ratio of “Program Services” expenses to “Management and General + Fundraising” expenses, as shown in Table 2.


 

 

Table 2

Management & General + Fundraising Expenses and Program Services Expenditures for the GMU Foundation and Its “Peers,” Various Years

 

 

 

 

Mgt & Gen’l +

Program

Program Services/

University

Year

Fundraising

Services

Mgt & Gen'l + Fundraising

 

 

 

 

 

SUNY – Albany

2001

$1,473,109

$3,687,504

2.5

 

2002

1,387,526

2,608,279

1.87

 

 

 

 

 

SUNY – Buffalo

2002

14,053,747

45,637,973

3.25

 

2003

16,557,537

53,043,967

3.2

 

 

 

 

 

Univ. of Connecticut

2002

9,403,656

26,290,403

2.8

 

 

 

 

 

Univ. of Iowa

2002

11,705,841

61,736,769

5.27

 

 

 

 

 

Univ. of Kansas

2002

12,725,026

87,691,216

6.89

 

 

 

 

 

Univ. of New Mexico

2002

3,074,489

17,183,753

5.59

 

 

 

 

 

Univ. of Oklahoma

2002

4,016,438

57,565,253

14.33

 

 

 

 

 

Univ. of Rhode Island

2002

803,330

15,758,727

19.61

 

 

 

 

 

Univ. of South Carolina

2002

2,435,332

15,216,643

6.25

 

 

 

 

 

Univ. of South Florida

2002

5,545,494

22,950,028

4.14

 

 

 

 

 

Western Michigan University

2002

463,224

21,474,845

46.35

 

 

 

 

 

Univ. of Wisconsin - Milwaukee

2002

1,231,731

7,947,801

6.42

 

2003

1,045,849

7,130,817

6.82

 

 

 

 

 

George Mason Univ.

1997

956,089

6,602,096

6.91

 

1998

1,368,973

6,920,649

5.06

 

1999

2,121,028

8,514,255

4.01

 

2000

3,220,942

10,599,247

3.29

 

2001

2,945,757

13,720,365

4.66

 

2002

2,426,777

13,560,048

5.59

 

As is apparent from Table 2, the benefit/cost ratio varies widely across universities. For example, at Western Michigan University in 2002, $46.35 was spent to aid the institution for each dollar spent on management, general, and fundraising expenses by the foundation. At the other extreme, each dollar spent on fundraising and management and general expenses returned only $1.87 to the academic mission at SUNY–Albany in 2002. Apparently there are wide variations in how costs are reported across universities so that these numbers are not truly comparable across institutions. [This issue is discussed in some detail below.] However, benefit/cost ratios over time at the same institution are comparable.

 

For the GMU Foundation, $6.91 in support was given for academic programs per dollar spent on the management, general expenses, and fundraising expenses of the foundation in 1997. But, in the following three years, the “bang for the buck” trended downward: In 2000, only $3.29 was spent on academic programs per dollar spent to operate the foundation.  As is evident from Table 2, the Foundation’s costs rose more rapidly than program services spending.  The drop in interest rates which reduced the Foundation’s interest income likely limited the Foundation’s ability to increase program services spending.   The benefit/cost ratio rose to $5.59 in 2002, but that figure is still considerably below the $6.91 figure for 1997.

 

FUNDRAISING MANPOWER

 

A major reason that the operating costs of university foundations vary widely across institutions is that efforts to raise funds from private sources which are then placed in the foundation are done not only by the foundation itself but also by development offices and by local academic units (LAUs), such as individual colleges and schools. To obtain some information on development staffs at our peer institutions, Debi Siler consulted university phone books and other sources to obtain the information in Table 3.

           Table 3

Development Staffs

 

 

Development

Foundation

LAUs

Total

School

Office Staff *

Staff

Staff*

Staff

SUNY – Albany

35

11

13

59

 

 

 

 

 

SUNY - Buffalo

31

27

14

72

 

 

 

 

 

Univ. of Connecticut

None

67

14

81

 

 

 

 

 

Univ. of Iowa

None

86

30

116

 

 

 

 

 

Univ. of Kansas

None

18

20

38

 

 

 

 

 

Univ. of New Mexico

None

14

15

29

 

 

 

 

 

Univ. of Oklahoma

40

21

18

79

 

 

 

 

 

Univ. of Rhode Island

11

None

5

16

 

 

 

 

 

Univ. of South Carolina

24

None

29

53

 

 

 

 

 

Univ. of South Florida

None

None

18

18

 

 

 

 

 

Western Michigan Univ.

None

13

6

19

 

 

 

 

 

George Mason Univ.

32

7

13

52

     *  On Foundation’s payroll if no Office of Development.

 

As shown in Table 3, some of our peer institutions have no one on the paid staffs of their foundations. Those with no (or small) reported foundation staffs, however, tend to have relatively larger “development office” staffs. And, likewise, those with no “development office” staffs tend to have large foundation staffs. All institutions have fundraising personnel assigned to local academic units. The size of the fundraising cadres ranges from a high of 116 at the University of Iowa to a low of 16 at the University of Rhode Island. Of the 12 universities in the list, 6 have more fundraising personnel in total than GMU, and 5 have fewer.  Note: The headcount figures shown in Table 3 include ALL personnel involved with the fundraising function, both fundraisers and their staffs.

 

If the fundraiser’s salary is assigned to a local academic unit, her or his salary is likely charged to that unit rather than to the foundation which receives the grants or contributions that she or he obtains so the foundation’s expenses are lower.  Table 4 contains information on the individuals who are involved with the GMU Foundation and University Development in the central administration, and their salaries and benefits, at the time these data were collected in early Summer 2004.

Table 4

Development Positions at George Mason

Central Administration

 

 

 

2004

Value* of

Last Name

First Name

Position

Salary

2004 Benefits

Officers:

 

 

 

 

Cooper

David

Associate VP

$ 114,000

$ 27,178

Drane

Melissa

Dir. Of Leadership Gifts

87,000

20,741

Epps

Macon

Assistant Director

29,220

6,966

Jamison

Creston

Development Services Director

88,500

21,098

Jobbitt

Judith

VP Development; GMUF President

175,500

41,839

Kavanaugh

Michele

Assistant Director, Annual Fund

46,010

10,969

Kehoe

Kathleen

Dir., Scholarship Development

49,250

11,741

Labouchere

Anne

Director, Dev. Research

53,680

12,797

Lee

Tracy

Dir., Corporate & Found. Relations

76,180

18,161

Mullins

Taris

Exec. Dir., Partnership Development

69,500

16,569

Murphy

Una

Leadership Gifts Officer

67,700

16,140

Pearson

Jane

Director of Donor Relations

72,000

17,165

Perlik

Barbara

Asst. Director, Dev. Research

41,049

9,786

Roe

David

GMUF Financial Officer

101,000

24,078

Smith

Zavin

Annual Fund Coordinator

33,060

7,882

St. Ours

Denise

Asst. Director of Donor Relations

49,510

11,803

White

Tracy

Controller

78,000

18,595

Woitek

Kirsten

Director, Annual Fund

72,500

17,784

 

 

OFFICER TOTAL:

$1,303,659

$310,792

Staff:

 

 

 

 

Barr

Elizabeth

Phonathon Manager

$ 30,675

$ 7,663

Bond

Susan

Gift & Records Analyst

17,589

4,394

Carter

Mildred

Gift & Records Analyst

34,168

8,535

Coppage

Diane

Assistant to David Cooper

36,810

9,195

Creque

Jason

Office Services Specialist

24,336

6,079

Cummins

Gayla

AP Manager

38,162

9,533

Haid

Suzanne

Assistant to J. Pearson & D. St. Ours

27,939

6,979

Hendrix

Patricia

Assistant to Judy Jobbitt

35,695

8,917

Hughes

Krista

Development Researcher

38,855

9,706

Lumicao

Sarah Jane

Gift & Records Analyst

27,608

6,896

Thornburg

Diane

Alumni & Dev. Records Manager

44,615

11,145

 

 

STAFF TOTAL:

356,452

89,042

 

 

DEVELOPMENT OFFICE TOTAL:

$1,660,111

$399,834

*23.84% of Administrative Faculty Salary & 24.98% of Classified Staff Salary.

 

 Table 5 contains similar information for fundraising activities in Local Academic Units at Mason.  As with any organization, people come and go, e.g., David Cooper is no longer with the GMU Foundation.  These data, however, are not meant to be exhaustive or definitive by any means, but rather suggestive of the FTE and the salary costs associated with fundraising throughout the University.

Table 5

LAU Fundraisers and Staff at George Mason

 

 

 

 

2004

Value* of

Unit
Name

Position

Salary

2004 Benefits

CAS

Teresa Linehan

Director of Development

$ 82,400

$ 19,644

 

 

 

 

 

CNHS

Mary Earle Farrell

Leadership Gifts Officer

73,514

17,526

 

 

 

 

 

CVPA

Brian Marcus

Assoc. Dean for Development

113,300

27,010

 

Julie Ann Green

Director of Development

51,943

12,383

 

Megan Thornton

Development Associate

34,000

8,493

 

 

 

 

 

GSE

Shermita Rochelle

Director of Development

70,656

16,844

 

 

 

 

 

ICAR

Richard Gundon

Director of Development

73,000

17,403

 

 

 

 

 

IT&E

Jennifer Lamb

Director of Development

80,000

19,072

 

Josephine Boukhira

Development Associate

33,743

8,429

 

 

 

 

 

Libraries

Adriana Ercolano

Director of Development

56,160

13,389

 

 

 

 

 

SOL

John Wertzberger

Director of Development, Asst. Dean

81,800

19,501

 

Jessy Abellard

Assistant to John Wertzberger

40,900

10,217

 

 

 

 

 

SOM

Holly Davis

Director of Development

92,050

21,945

 

 

 

 

 

SPP

Roger Stough

Assoc. Dean, Research & Dev.

64,261**

15,320**

 

 

 

 

 

 

 

TOTAL LAU DEVELOPMENT

$801,066

$192,212

*23.84% of Administrative Faculty Salary and 24.98% of Classified Staff Salary

**40% of salary and benefits because of other responsibilities

 

Note that, in addition to salaries and benefits, other costs are also incurred in fundraising, e.g., secretarial assistance, telephone service, and travel.  The point is simply this:  All those who are on the University payroll to increase the resources available to the University to fulfill its mission should be held accountable for their performance, just as the faculty are held accountable for their activities each year.  The Faculty Senate adopted a resolution advising President Merten that the Unit Profiles developed for each LAU should also contain information on fundraising personnel, their goals, the costs associated with their fundraising activity, and the results that the fundraisers produce in terms of cash or in-kind contributions and grants or contracts.

 

Although the Faculty Senate can (and will periodically) review and provide information on the University’s overall fundraising activities and performance, as in this brief study, the faculty in each Local Academic Unit should closely monitor the activities and performance of their own LAU development office.