ERIC Identifier: ED405943
Publication Date: 1997-03-00
Author: Schuyler, Gwyer
Source: ERIC Clearinghouse for
Community Colleges Los Angeles CA.
Fundraising in Community College Foundations. ERIC Digest.
Community colleges were created and continue to be supported by local and
state appropriations, however, this public support is gradually declining,
making financial support one of the most pressing issues for community colleges.
To balance out this decline, community colleges have formalized their
fundraising efforts by creating institutional foundations as recipients of
tax-deductible contributions under Section 501c(3) of the Internal Revenue Code.
These foundations are independent legal entities, guided by the mission of
soliciting private monetary contributions and investing them for the benefit of
their affiliated colleges.
THE HISTORY OF COMMUNITY COLLEGE FOUNDATIONS
community college foundation may date from 1922 at Long Beach City College. A
handful were established between the 1940s and the 1950s, but the majority were
begun after the late 1960s (Robison, 1984). The large-scale, organized, external
fundraising now common at community colleges began as a result of the 1965
Higher Education Act and the federal funding opportunities that it offered
(Keener, 1984). Community colleges began by tapping into the sources of external
federal support offered through grant and contract competitions. In the mid
1970s the colleges began adapting the university and liberal arts college model
of engaging other external contributors for private gifts (Keener, 1984).
The National Council for Resource
Development (NCRD) has studied the characteristics of community college
foundations. In a 1993 survey of the 1,140 member institutions of the American
Association for Community Colleges (AACC), 542 of the 550 institutions
responding reported having a foundation (Adams, Keener, McGee, 1994). Almost 30
percent reported endowments in excess of $1 million in 1993. The wealthier
foundations were: older; had one person specifically responsible for resource
development; and relied more on contributions from non-college-affiliated
Size of institution was unrelated to size of endowment; only 10 percent of
the wealthier foundations were affiliated with colleges with student enrollment
of over 20,000.
THE BROADENING OF MISSIONS & FUNDRAISING STRATEGIES
Originally, community college foundations focused almost exclusively on
soliciting contributions toward capital campaigns. Now, their mission has
expanded to include other objectives, such as "friendraising," involving
community leaders in college activities, and enhancing the image and visibility
of the college (Anderson & Snyder, 1993).
As the mission has broadened, so has the repertoire of fundraising
strategies. Practices common to four-year colleges and universities are being
adapted to the community college. Annual fund drives, planned and deferred
giving, capital campaigns, special events, business partnerships, and grants
acquisition have all been undertaken. Planned giving programs and the
cultivation of business partnerships have recently gained attention.
Edwards and Tueller (1991) describe planned
giving as the future of fundraising. Planned gifts are generally large
contributions of accumulated assets, real estate, stocks, bonds, trusts, and
paid-up insurance policies that require the oversight of a contributor's
financial advisors. One form is the charitable remainder trust, where the
community college foundation is allowed to sell a donor's stock and reinvest it
to produce a higher return for the donor, without paying capital gains tax. Upon
the death of the final beneficiary, the foundation receives the remaining assets
in the trust while the donor receives a tax deduction for the estimated
remaining amount at the time of the gift. These kinds of giving programs are
appealing to donors because they provide a service, allowing the foundation to
share its tax-exempt status with donors.
Green River Community College, a case in point, was able to work with a
potential contributor to design a mutually beneficial plan for giving. The
college obtained 20 acres of land contiguous to its campus through a bargain
sale agreement. The agreement required the college to pay only one-quarter of
the value of the appraised value of the land, allowing the donor to receive a
tax deduction for the difference between the bargain price and the appraised
value (Edwards and Tueller, 1991).
BUSINESS PARTNERSHIPS & CATEGORIZED FUNDING
Many examples of collaboration exist between private businesses and community
colleges. One such innovative partnership is found at Sacramento City College.
Teaming up with Pacific Bell, students in the college's electronics and computer
science programs refurbish aging computers provided by the company, which are in
turn passed on to local school systems for use (Adams, Keener, and McGee, 1991).
At Long Beach City College, a collaboration with McDonnell Douglas Employees
Community Fund has led to the development of an adapted physical education
program for elderly stroke victims. The program relies on the combination of
special equipment provided by McDonnell Douglas and customized physical
education courses offered at the college.
The business community can be solicited for contributions by placing emphasis
on the beneficial returns in the form of graduates who are equipped with skills
in demand in the workforce (Scott, 1991). Through partnership, a community
college foundation and a company can develop plans of funding that cover the
costs of equipment or training students in areas pertinent to that company.
While such collaborations may be developed without the involvement of the
community college foundation, the expertise of the fundraising staff along with
the benefits of the tax-exempt status make the foundation a valuable
Beyond the development and implementation of a mutually beneficial plan for
funding, recognition of benefactors for their contribution is fundamental. Going
beyond saying thank you, community college foundations should tailor their
recognition efforts to what would "thrill the donor." Formal recognition through
awards, banquets in the donor's honor, as well as media exposure cultivate
long-lasting and financially fruitful relationships with individuals and
businesses in the private sector (Adams, Keener, and McGee, 1991). On the other
hand, there are cases where donors may request to remain anonymous; this must be
respected to maintain the relationship and not jeopardize future contributions.
How well are community college
foundations using the money that they have raised? Typically, their investment
policies are very conservative, limiting an investment portfolio to "direct
obligations of U.S. government-sponsored agencies, certificates of deposit up to
the maximum insured at federally insured financial institutions, and mutual
funds that invest in securities" (Riggs and Helweg, 1996). However, many
conservative organizations such as Eastman Kodak, the Illinois Teachers'
Retirement System, and the World Bank are utilizing derivatives such as
commodity futures in their portfolios. Community college foundations can
consider these options, while carefully weighing the trade-off between more
risky investments and the corresponding reward. The Butte College Foundation
accomplishes this by convening its Finance Committee quarterly to discuss
portfolio diversification and the target rate of return of investments, and
consulting outside professional brokers and agents at its discretion (Anderson
& Snyder, 1993). Another investment option is that provided by the Common
Fund, a 25-year old organization that offers investment advice and management to
colleges and schools. With 1,300 members, the Common Fund oversees more than $17
billion of its member's assets (Nicklin, 1997).
MARKETING & RESOURCE DEVELOPMENT
No matter how sophisticated the fundraising strategy or investment policy,
the effectiveness of the community college foundation is contingent on the
institutional image. According to Keener, Ryan, and Smith (1991), important
elements in the development of a positive institutional image are:
Involvement of the college trustees, president, faculty, and staff in the
Experiences of local employers with students;
Services that are responsive to the needs of students and the community;
An attractive campus with well-groomed grounds and well-maintained buildings;
Most importantly, the quality of education received from the college.
The significance of marketing and institutional image is further reinforced
by a six-year study of community college fundraising, sponsored by the Council
for the Advancement and Support of Education. The study found that those
colleges that are the most successful in fundraising have two characteristics in
common--a strong marketing program and widespread community support (Keener,
Ryan, Smith, 1991).
Community college foundations play an essential
role in the future of community colleges. Garnering private financial support,
they function to bring together and formalize the relationship between the
institution and the community. Details in the organization and the fundraising
strategies of the foundation are important, yet more critical are the human
factors - the establishment of mutual relationships with individuals and
businesses, the appropriate recognition of contributors, and the advancement of
positive perceptions of the college in the community. All in all, development
professionals specifically trained in both the technical aspects and the human
factors of fundraising are essential to the success of the foundation.
Adams, K., Keener, B., and McGee, E. A. (1994). "Going Public with Private Fund Raising: Community Colleges Garner Fairer Share
of Support." Community College Journal, 65, 39-42. (EJ 488 399)
Anderson, J. M. and Snyder, T. (1993). The Community College Foundation
Manual & Guide. Network of California Community College Foundations (ED 365
Edwards, J. E. and Tueller, A. B. (1991). "Planned Giving: The Future of
Fundraising." Community, Technical, and Junior College Journal, 62, 40-43.
Keener, B. J. (1984). "The Foundation's Role in Resource Development." In
Sharron, W. H. (Ed.), The Community College Foundation. (pp.3-18). Washington
D.C.: National Council for Resource Development.
Keener, B. J., Ryan, G. J., and Smith, N. J. (1991). "Paying Attention Pays
Off." Community, Technical, and Junior College Journal, 62, 34-37.
Nicklin, J. L. (1997). Common Fund Adds 3 Index Funds as Investment Options.
The Chronicle of Higher Education, February 21, 1997, p. A30.
Riggs, R. O. and Helweg, O. J. (1996). "Investment Policy for Community
College Foundations: Are Commodity Futures Prudent?" Community College Journal
of Research and Practice, 20 (3), 219-231.
Robison, S. (1984). "The Development of the Two-Year College Foundation and
Techniques for Success." In Sharron, W. H. (Ed.), The Community College
Foundation. (pp. 31-48). Washington D.C.: National Council for Resource
Scott, R. W. (1991) "Harvard Got the Ivy and I Got the Itch." Community,
Technical, and Junior College Journal, 62, 22-25. (EJ 431 640)