Why Advancement Benchmarking is More Critical Than Ever

0:00:10.4 Speaker 1: Hello and welcome to office hours with EAB. Our experts today discuss best practices in benchmarking university advancement efforts. More importantly, they talk about the power of using those analytics not only to figure out what’s working and what’s not, but also so your advancement team can have better, more data informed discussions with university leadership who may not fully appreciate the financial impact that advancement teams are having on university budgets. So give these folks a listen and enjoy.

0:00:45.4 Chrysanthi Violaris: Hello and welcome to office hours at the EAB. My name is Chrysanthi Violaris and I’m a senior analyst in the research division. One area of focus for me over the past couple years has been on how university advancement teams function and on the state of higher education fundraising as a whole. Given all of the financial headwinds facing colleges and universities today, fundraising has probably never been more critical to the success and possibly the survival of so many institutions. Today we’re gonna talk about how advancement teams are using benchmarking not only to measure their fundraising efforts, but how they can make a persuasive case for investments to university leadership. With me today to discuss this is a friend and colleague, Ally Stanton. Ally, would you mind introducing yourself and telling us a little bit about your role at EAB?

0:01:26.7 Ally Stanton: Sure. Thanks Chrysanthi. So I work on EAB strategic advisory services team. I spend the bulk of my time focusing in the world of advancement. And my career started on campuses. I worked for two large institutions, one public, one private. I spent over a decade on them, wore a lot of hats anywhere from athletics to enrollment management. The bulk of my time when I was last on an institution was in the alumni and foundation world. My most recent stop, however, was then I took a bit of a detour and spent four years with a AI startup. It was still in the world of education, but from an entirely different vantage point. And then it led me here to EAB. So that’s sort of the background from which I come to this problem set from.

0:02:10.0 CV: So you’ve really been in it kind of in the trenches. Sort of speaks in terms of university advancement and fundraising, which is kind of cool. So what has changed the most since she worked on the university sides in terms of the use of metrics and benchmarking or even how university leaders are setting these fundraising goals.

0:02:27.6 AS: Well, it’s interesting. So when I started in enrollment management, I started to cut my teeth because there was still they were using analytics right when you’re trying to make smart undergraduate enrollment management decisions. But even then it was a little still early phases when I moved into that advancement world. It really was still early days. I think advancement always had a proclivity to have that like financial analytic view. But from like alumni engagement or how do we wrap our minds around data, informed decisions and strategy, that was still early days. Now what we’re seeing though is this really sharp lean in and demand for more insights from the data that we know that we’re sitting on. Right. I think that everyone’s starting to understand, wow, there’s so much that we could be gleaning. We have so much intel, but how do we clean it up? How do we empower it and use it? So that’s always really promising. I think in the world of how we’re moving the needle a little bit. And it’s not just, I think from again, what’s our fundraiser goal? It’s also about org structure, it’s fundraiser performance. It’s just strengthening the ability to make the right moves overall.

0:03:34.5 CV: Yeah, absolutely, totally like the ideas behind fundraising, not just fundraising goal, but just fundraising structures. I think that’s really important. But I would also love to just get in real quickly on what are some of the biggest challenges you think advancement leaders are facing right now.

0:03:49.2 AS: Well, and we could say advancement, but I think higher ed in general, there’s this major perception issue, EAB and I’m going to plug it right. Just we study this at length and I think it was just last week we hosted our annual State of the Sector and it was entirely focused on the hurdle that we’re facing from what is the perception of higher ed and the value just from the Society’s view. So it has impacts, right? It has impacts on enrollment and it has impacts on fundraising. We’ve seen giving to education slip a spot, I think giving USAID as a philanthropy report every year and it has slipped into the third spot. So perception’s impacting that and we know that perception is pretty far from reality. So the good news is I think we can course correct here and foundations are at the front line. Right? You are, it’s a people industry. So I think that you can be a part of that change. But that’s certainly still a major hurdle, that distrust or that questioning of the value and impact of higher ed. I think when you start looking at advancement in particular, another challenge we’re seeing CEOs and foundations face are the shortening of tenure and campus leadership.

0:05:00.5 AS: Now we’re just a tick below like a six year average on a president and it used to be over 8 and you could really count on that. So we’re, I say this lovingly. We’re in like a perma campaign era where you know, you’re never not campaigning because when leadership comes in, whether it’s a first time president or someone who’s more tenured, they’re still wanting to put a stamp or they have new strategic priorities. And then with that, you never want to roll out the same goal, right? You want to improve upon a past goal. So then you start to see, okay, we’re into another campaign pretty quickly and we’re gonna increase what we think we can pull down from a goal standpoint. So that’s just a tough challenge. And then the last thing I’d add is the budget situation or the enrollment health of universities is also putting this added pressure. We’re doing more, but potentially with less. So it’s a little bit of a perfect storm. And so it’s certainly a tough situation. And I think then the last thing I’d say is that a lot of folks that are looking, if we’re struggling in enrollment, what can improve upon that? Scholarships.

0:06:06.2 AS: So it’s just this added pressure, I think, for the advancement shop is becoming more central to helping move us out of some of these big challenges. Just that the campus is facing as a whole.

0:06:15.8 CV: Absolutely makes sense. And I really just kind of like the financial situation is kind of dire. I actually wrote my blog that I wrote recently on how important it is to make case for advancement does kind of dig into the. Financial side of things there. But I do want to circle back to that little piece I wrote just real quick, because my blog was about how to make the case for advancement. How EAB has this amazing benchmarking tool that is great to prove your point for university leadership to make the case for advancement. So can you help me explain in layman’s terms real quick just how our reports work and how we use it to help advancement teams figure out where they might want to make some adjustments?

0:06:58.7 AS: Yeah, for sure. So I mean, and I mentioned before, it’s not uncommon that we’ve got advancement leaders who’ve done good internal analyzing of their financial status, or sometimes even folks are using internal muscle to try to gather information from peers and do some benchmarking. But we’re trying to take that lift and that bias out of the process. We’re examining a shop’s performance, we’re examining their organizational structure, we look at their expenditures, fundraiser productivity through a pretty rigorous eval process. I mean, we’re using strict Definitions because we want to make sure we’re getting a real apples to apples comparison of performance. So again, when you are if a team’s on its own trying to just gather some peer information, what is the definition that you’re moving by? You know, not only is it laborious, but we don’t know if you are getting that apples to apples comparison. So first and foremost, we’re measuring all these KPIs, but we’re also doing so in a very specific vacuum. And then what we’re trying to do is right, we’re trying to extrapolate out on the growth mindset of saying, okay, let’s put you in a cohort of your peers.

0:08:06.4 CV: How are you performing? What does it look like against your actual peer to peer comparison? And then for some folks, we’re actually saying, okay, let’s look at your aspirational peers. There’s a growth mindset at your institution. How can we look at what that may come to fruition on your campus and look like? Example I give is if maybe you’ve got leadership that’s throwing around the B word and $1 billion campaign is starting to ping around. Does your shop actually structure itself like folks who have raised $1 billion in the past? How far off are you from that investment? That’s the types of things that we’re examining and then hoping to help folks that advocate for investment or make adjustments. It also, it’s not always just advocacy, please invest. Certainly people are saying we think we have the right amount of investment, but are we putting it in the right places? Some folks are exiting a campaign and they’re saying, well, just because we’re going to end the campaign doesn’t mean we’re not fundraising. So are we doing so in the most efficient manner? Do we’ve got the right are we too, are we too top heavy on frontline staffed? Are we equipping ourselves correctly in the back of house? So maybe it’s a more of an internal review. So those are some of the things that we’re helping empower folks to evaluate and then make decisions on.

0:09:29.8 CV: Absolutely, yeah. And I just want to double click. I’m a big fan of unbiased benchmarking. I think unbiased is really important. As a data person, as a research person, it’s just vital to, I think, your internal success. And I would love to get into some data and some stats real quick. So in my blog post, I included some honestly kind of frankly, frightening, scary stats about the Impact of cutting them for advancement efforts. Which is something that can and does happen all the time as institutions look to cut costs. I feel like advancement is kind of like an easy one to pull sometimes, but it’s not really always helpful. So I just want to take a second. Can we take a moment to elaborate and unpack those stacks? Like they were just kind of crazy and I would love to spend some time on them.

0:10:13.4 AS: Yeah, well, I mean right when we’re doing benchmarking, we are giving folks their individualized look. But then you know, we’ve got aggregate view into oh man, like what happens when the entire industry makes moves in these directions. So we track like impact of FTE. So we know that you know, on average every additional FTE adds 1.24 billion into a production total, which is an insane amount of money. Right. But I think we know this, but it’s nice to quantify it. But then we even go further, we’ve broken down our analyst will actually look at by role. So it’s yes, it seems inherent to think, okay, well yeah, if I add a donor officer that would absolutely impact production. But what about back of house staff? Like I mentioned, there are roles for research or support for your fundraisers that have significant ROI. So not only just that, you know what feels like a no brainer. Yeah. If we have more boots on the ground talking to people that would increase production. But we can ascertain what an ROI would be for. FTE roles throughout your organization. So that’s a big one. The other one is certainly when we start talking about, all right, if we’re going to tighten the belt, what could that mean? We know there’s direct correlation when you don’t invest in your advancement shop that you can anticipate less production.

0:11:32.3 AS: I think this year and the number jumped, I think pretty significantly. But from our last cohort, I say this year, from the last fiscal year cohort we did, every dollar less of investment in your Advancement shop is $8.25 less production you can anticipate. Yeah. And we’ve got research we’ve done on there’s a lot of industries that we know there’s a diminishing marginal return. The graph goes up and then it comes down. There’s a certain productivity level that you hit and say okay, we’re running less efficient. We’ve not observed that in advancement. Right. We know that there are productivity gains like all the way up to 300 FTE so it’s. There’s not really a ceiling or a plateau. So investment is going to lead to production.

0:12:23.7 CV: That is again, the $8 that just gets me every time. I think it’s pretty crazy. Especially because people are trying to cut budgets. So why not keep investing? Thank you for that answer. And I just want to now pivot towards just your kind of back to your experience. So I know that you’re working every day with our advancement leaders. With advancement leaders in general. Is there a case study or example of an institution that successfully leverage advancement benchmarking to protect and grow budgets or just sit like a higher revenue goal, anything like that?

0:12:53.6 AS: Yeah, absolutely. So there is a specific use case that I’ll get to in a second. But I mean, I think in general what I would say is we’ve got a ton of use cases. When it really comes to folks working with their cabinets or boards, we use the phrase of like it’s hard to be a prophet in your own land. Right. So sometimes it’s really helpful to bring in some really unbiased statistical analysis or even a subject matter expert. That’s something that our firm’s doing really commonly and to present the case. So right, it’s. We’re going to be able to pull the data, we’re going to give it a robust analysis. And being an outside voice.

0:13:30.4 CV: It can really help make that case for investment. And most of the time especially when we talk about like board of trustees, they’re made up of business people who have made a career or successful careers using business intelligence to run their companies or find success in their personal lives. So they respond typically very positively to creating almost like again BI for advancement. So I think that we’ve got a plenty of examples.

0:13:58.7 CV: One in particular, there’s a regional Midwest institution that deployed this very successfully. Board was looking at efficiency cuts. It was just we think that you can run more efficient efficiency efficiently. I’m sure there was plenty of accountants on the board who were successful alumni. We get that often that the board president was a successful accountant at PWC, what have you, so we can appreciate the mindset they’re bringing to the table. So what the team did was they had us run benchmarking. We were looking over three year span and we were able to come back and say not only should we not make cuts to help us run more efficiently, but there’s actually a case for it to be made for investment. They ended up adding an FTE to their ranks. They were able to track the ROI of the investment. And then it sort of became the board’s idea, right. Of hey, these people should come back annually. So it is now baked into a specific annual board meeting where we come back and present the data. And it does become sort of a check and balance on. You feel more confident making an investment when not only do we make the case for the investment, but we will track it.

0:15:08.8 AS: You know, did it pay off? So that’s, I’d say an example. And again, this is, we’re talking about a regional public institution in the Midwest. So not one of your massive shop sizes, but a pretty decent operation that was able to come in, make a case and then stick with it. Then it was becoming requested by the board.

0:15:32.2 CV: That’s again, I love a case study. I love a proof of story, proof of proof of use. And I know that you mentioned earlier that the tenure of a president is shrinking. I think the average presidential tenure is now about six years, which is down from eight years, which I’m sure is down from a different number. But can you elaborate more on how the short tenure impacts the work of advancement teams? Like what are people seeing with, with these shorter presidencies?

0:15:57.9 AS: Yeah, so I mean, yeah, I’ve met CAOs who even in, who aren’t even tenured that long, who have seen two, three presidential turnovers.

0:16:06.2 CV: Wow.

0:16:06.9 S1: Yeah. And each one, right, is bringing new strategic plans. You’re having to start, stop or you know, sometimes it does align with a campaign, but then that means, okay, we can anticipate the exit, but then if we’re going to onboard, it’s almost too nice and too sweet not to just jump into a new campaign because we’ve got this great phase out. Why not just phase back in? So it certainly causes difficulty just in your general pacing of what’s happening in your day to day. I think that when a CAO can have a really firm handle on the analytics of a shop, it can not only help smooth transition, but it starts to build credibility or trust for decision making. So if as a new president enters in, there wasn’t familiarity before you can present a really strong hold on what’s happening in your world. Then again, odds are you’re not going to see a campaign goal out of left field. And then when you’re trying to talk that down or bring a realistic curb to it, again, you could be that trusted voice of saying, well, I’ve been measuring this for the past three years.

0:17:15.6 AS: This is what we’ve seen and what we can anticipate if we want to get up into that level. So I think that that’s part of the impact. One of the stories I give and I’m going to keep it very anonymous, but I’ve met a CAO who welcomed a new president to campus. It was a first time president. So you know that’s, it comes with a lot of probably pressure. You’re wanting to make a good impression and find some success in that first time role so that it can lead to new presidential opportunities. And they themselves. The CAO wasn’t long tenured when the new president came in. I mean I don’t think they were in seat a year, maybe not even six months. And the institution had pulled in a record transformational gift. So you know, new president sees that right off the bat and now we’re really excited and we’re starting to project some really optimistic campaign goals in onto the institution. And it was a tough road to walk with tempering expectations and without past data it’s even more difficult to really rein in. And I’m the first person to say I love zealous leadership.

0:18:17.7 AS: You know, I mentioned the dwindling confidence in public from the public in higher ed. So like I love that energy. It’s how do we channel it? So it’s again it’s trying to harness it, put it in the right direction and it’s hard to argue numbers. So when you’ve got a really good hold on what you know about your shop from that data driven standpoint, it’s much easier to redirect and put that and channel it in a really positive way.

0:18:46.6 CV: Yeah, again, I just love how much it makes the case. Like I know we keep repeating that phrase but I just think it’s really important. They always teach you in school that you need to prove your point. So why not have good valid points to keep proving with. And I also, this might be like a little bit of a boring question, but just so that you know our listeners know exactly what EAB’s Advancement Benchmarking Reports are, I would love to just get a little technical on what our reports look like. How many reports are there? What are we measuring specifically? All that fun, I guess fun to me, maybe not fun to others, just nitty gritty aspect of it.

0:19:23.3 AS: Yeah, well, I mean I’d assume if they’re listening and maybe they are here for the nitty gritty. Yeah, happy to deliver on that. So the way that we approach it is there’s three specific reports that we run. One is the shop ROI. So this is where I mentioned we’re looking at the FTE spread investment in those specific organizational structures. We’re looking at production by gift band. We’re looking at overall shop investment and a report that comes with that subsequently is our advancement investment analysis. So it’s actually looking at operational spends, salaries, we’re looking at expenditures. That’s really informative. Again, it’s helping folks to say, well if I am being asked to tighten the belt, where do I have room to do so? Or if we’re woefully underinvested. This can also illuminate some of that. The separate report that we look at I’ve mentioned is fundraiser productivity. And this is a really granular look at. We’re actually looking at frontline fundraising and looking at portfolio size and churn. We’re looking at performance and we’re able to map salary to that of our high performers competing in market with our peers. For folks who are in and I mean especially with remote work, everyone really is in a competitive market anymore. For folks though who know that they’ve got to keep their top fundraisers, what does that look like for them? So we take a little bit more of a granular look at that fundraiser productivity.

0:20:52.9 AS: The other nice part about our approach to this is data is only as good as what happens with it. So if we kick out a 70 page report and it’s forwarded around to a bunch of inboxes and then lives and dies there what did it do? So we’re very heavy handed in. What’s the next step? What needs to happen with this? I’ve already waxed poetic at length about presenting to boards or cabinets. That’s a huge component that I think milks a lot of value. But perhaps it is more of an internal consultation. If we’re looking at an org audit and we’re trying to assess where can we make some shifts or you know, some folks are having trouble hiring filling specific positions, does it make sense to fill that position or is it redirecting that fund elsewhere? So we approach it as very much a, we don’t want you to have to self service the data. A lot of times it’s okay, well what’s the thing we need to investigate or double click on and how do we then show up for you to help with that? Change management or decision making, that’s the bigger part of it I’d say is great we had the data, but then, what the heck, it’s the so what now? What Kind of question.

0:22:09.5 CV: Yeah, I feel like what makes, I guess us as a company unique? What makes our benchmarking reports unique is that once we deliver, we don’t just leave people high and dry. We want to help see this process through. We want to help you implement whatever strategy you think is best. And I think it makes us as a company really unique, but also can really make a standout presentation. Like you said, this is a people culture. Like, a good presentation goes a long way. And so why not lean into those skills that advancement leaders have? Like, again, with a good presentation.

0:22:40.8 AS: Yeah, I mean, I know that we’ve even, I mean, another. If you want to talk about another use case of way people can deploy, this is when we start, one of the things that we’re our research team is on our agenda for this year is talking about principal gifts, transformational giving. The data is trending that we’re relying. If you look at the makeup of annual fundraising, more of that pie is coming from larger gifts. But sometimes there’s a higher scrutiny with a larger gift. So on an occasion, it does mean they’re going to be scrutinizing the advancement shop of okay, I do want to give to the university, but I know that if you’re managing it, how can I trust that this is going to be the investment that is the gift that I’m wanting to make to my institution? So it also comes in handy from that perspective. Maybe it is getting that conversation over that final hump where they really do feel confident in making that really major gift. There’s a lot of different ways. I think a lot of folks are just becoming more accustomed to having strong analytics in their decision making. So it even bleeds into again, it’s that principal giving nature. So there’s a lot of different ways where this can just be another tool in your toolkit or just extra muscle and the overall operation.

0:23:55.6 CV: No, Absolutely beautiful. So I would love to just take a second to wrap up this conversation. Give like the too long, didn’t listen if we are rambling. So thank you viewer or listeners for sitting with us this long. And I just also want to note that I feel like we’re only kind of scratching the surface here. Like I think Ally and I could sit here and wrap back and forth at least for two days on just what is going on and the advancement space and how it further implements the greater institutional success and all that fun nitty gritty. But I do want to be respectful of time. So before we go, would you mind sharing just what you consider to be the biggest challenges to advancement efforts today? Like any top pieces of advice you want to share with folks, anything that you just think an advancement department at a college or university needs to know or needs to take away from this conversation?

0:24:45.7 AS: Yeah, well, I’m a hopeless optimist, so instead of a challenge, I’ll look at it as an opportunity. Right. I think the perception thing is big and we know again, it’s not necessarily completely fueled by reality. So I believe that advancement can be a huge part of the solution in correcting this. So I think there’s some course correction opportunity to be had that absolutely still impacts this advancement world just again, in that overall outlook and the value that we’re placing on education. I also am excited of just the thirst for good data is going to push us to sharpen not only how we measure ROI, but how we’re actually gathering data and breaking down those silos on campus where certain pieces of information are being held. And that’s just going to be able to illuminate and open the door for better evaluation and finding new solutions. But I that’s all a caveat under. I think the thing that I’ve been so excited to witness is that even as we move into a space of like heavier hand in analytics that, I mean advancement is still a human centered industry. It’s still it’s dealing with connecting with people and sharing a story of value.

0:26:00.7 AS: And I think the really good data and analytics really free us up to be better at that as an advancement industry. So I’m glad to see that we’re trending in a direction that’s not saying, well this is going to help us so we don’t have to do that as frequently. It’s helping us be better at that. So I think it’s keeping that in mind. Right. It’s make sure that we’re really harnessing this sort of information to let us free us up, to continue to foster and press into those connections versus again doing the connecting for us.

0:26:32.9 CV: Absolutely. Again, I’m a data person. I know I keep repeating the phrase here, make the case, but I just think it’s the theme, like why again, why not have some really good qualitative and quantitative information to back up your opinion? It’s showing rather than just telling people on why they need to take the time to invest in advancement. And like you said earlier, it’s just such a belt tightening situation here, like Everyone is feeling the pressures. It doesn’t matter what your university standing is, it doesn’t matter what you’re looking like. Even if you are doing great and amazing and this does not apply to you, why not at least try to get prepared for the situation? Like they always say, the best time to prepare for your crisis is 10 minutes ago. So why not be the 10 minutes ago? But also in the end, I just feel like this data is like a… I don’t know, it’s like a fun personality quiz. Like why not know more about yourself? Like why not have the right information to just really again show, not tell. Like why the the information here is worth making the case, worth proving, proving your points.

0:27:36.2 CV: Absolutely.

0:27:36.8 AS: Well, Ally. Yeah. Thank you for taking the time with me today. This was lovely. Again, I know we’re just scratching the surface here, but I again, I just really want to appreciate or really want to thank you for taking a few moments to talk with me about university advancement.

0:27:50.3 CV: Yeah, thanks. Chrysanthi, this was a fantastic conversation. Look forward to more in the future and excited to continue conversation with all those advancement leaders out there. This is, it’s fun conversations to be had.