MANAGING THE UNIVERSITY COMMUNITY
FUNDRAISING FOR EUROPEAN UNIVERSITIES: EXPLORING OPTIONS
ISTANBUL, 17-18 FEBRUARY 2006

CASE STUDY: UNIVERSITY OF BREMEN

INTRODUCING A FUNDRAISING CULTURE: A DEMANDING AND ON-GOING PROCESS

Winnie Abraham Spokesperson for the President, Head of Fundraising University of Bremen, Germany

The case of Bremen will illustrate how important it is to have a clear understanding of the consequences of introducing fundraising activities on behalf of a public university BEFORE embarking on this trail. The process has a large impact on your university and - at least in the short run - no definitive results. The case will demonstrate the challenges, pitfalls and successes experienced while developing a fundraising concept and implementing it, starting with a change of mindset, which is needed from the people involved: Philanthropy is a philosophical attitude towards the world and not just another way of acquiring funds. You have to master the principles and techniques involved as well as being able to answer the question: Why does your university exist, what is your mission, why should somebody become a donor of your university? On the one hand you will realize how difficult it is to give a convincing answer and on the other hand, how many other organizations compete with you for people's wallets. While taking good advice from a US partner, the University of Bremen adapted it to its specific needs, objectives and culture. The case will pay particular attention to the issues related to anchoring the fundraising approach in the institutional culture and to the issues of organizing it effectively.

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1. University of Bremen at a glance
Founded 1971 Mission & Guidelines The University of Bremen is a major growth factor for North West Germany and it connects Bremen to the world. We have committed ourselves to the highest standards of excellence in research and teaching. We offer research-based curricula at undergraduate, graduate and postgraduate levels. We prioritize interdisciplinary research with a strong focus on knowledge transfer. The University of Bremen actively participates in a network of institutions, which promote and seek to sustain democracy and social justice in Europe. Academic excellence Research and teaching of practical relevance and social responsibility Interdisciplinary cooperation Internationalization Gender equity Environmental sustainability Students (2005): 22.075 (total) International students: 3.271 43% from Europe 37% from Asia 11% from Africa 4 % from America Faculties FB 1: Physics/Electrical Engineering FB 2: Biology/Chemistry FB 3: Mathematics/Computer Science FB 4: Production Engineering and Technology FB 5: Geo Sciences FB 6: Law

FB 7: Economics FB 8: Social Sciences FB 9: Cultural Sciences FB 10: Linguistics and Literary Studies FB 11: Human and Health Sciences FB 12: Pedagogy and Educational Sciences

Budget (2004): EUR 245m. (which is made up of: EUR 107m. from the Federal State budget, EUR 12m. of public subsidy; EUR 31.4m. from support programs provided by the Federal State’s Special Investment Program; external funds; : EUR 73.8m.) The University of Bremen is in fifth position with regard to acquiring external funding for research, i. g. on average every single professor has acquired EUR 222,700 of research funding from outside sources. Staff Professors: 323 (total) 37 financed by external funds (female: 19%, on average in Germany 14%), Scientists: 1163 (total) 700 financed by external funds
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Administration & technical staff: 992 (total) 261 financed by external funds Since 1989 12 endowment chairs 9 Collaborative Research Centers (currently 6) 1 National Research Center “Ocean Margins” 2005 Winner of the national competition run by the „Stifterverband für die Deutsche Wissenschaft“ with its heading “City of Science - Bremen-Bremerhaven 2005“

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1

Cultural and legal context for Higher Education fundraising in Germany”

“Apart from the ballot box, philanthropy offers the individual the only opportunity to express in which direction society should be heading. “ (George Kirstein)

1.1

Cultural context:
We need a science-oriented wealth culture We need to cut ourselves free from the state and assume more responsibility for ourselves

The current situation can be summarized as follows:

1. There is no fundraising culture in Germany, above all no significant commitment to make donations to higher education – if at all, Germans donate to social, sporting or cultural causes. With high taxes and dues (40% of national income/ gross domestic product) the state is expected to take care of the needs of the population. Development towards a civil society, in which private wealth can be tapped for public tasks and social problems can also be solved by private citizens is only in the early stages. German nonprofit organizations rely most heavily on public-sectors donors, and, as far as income from private donations is concerned, bring up the rear in the global list together with Netherlands behind Japan1. In 1998 the average annual sum donated by Germans was EUR 110 per household, in the USA the figure was USD 1,075. According to a study2 Germans donated EUR 2.6bn to charitable causes between July 2004 and June 2005. Within Germany there is a north-south divide: the population in Bavaria and Baden-Württemberg donates twice as much as the population in Schleswig- Holstein, Hamburg and Bremen. Although the level of private wealth is high in Germany – every year EUR 360bn are bequeathed - the number of donors remains low. A current study by the Bertelsmann-Stiftung suggests that the establishment of foundations since 2001 – at around 900 start-ups – is falling back slightly, to 800 in 2003. The fact is that science and education rank last in the list of where donations are channeled. Natural disasters (2004/05: donations for victims of the Tsunami: EUR 560m), needy people, animal welfare, environmental protection and sport are issues which tug at the heart strings and thus open wallets.

2. Fundraising for higher education suffers from a negative image
Collecting donations for higher education is burdened with the image of begging at a high level. Knowledge about the role of the sciences in the development of a society that is fit for the future, democratic and socially just is not firmly anchored in the minds of the population. This knowledge about what the universities contribute to society is however an important prerequisite to awaken a readiness within the population at large to take the initiative and responsibility into their own hands and thus develop a general willingness to donate to the sciences. A commendable initiative, which encourages dialogue between the scientific community and the public, is the PUSH program (Public Understanding of Science and Humanities) run by the “Stifterverband für die Deutsche Wissenschaft”.

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Johns Hopkins study/Baltimore 1994 GFK Charity Scope, 2005
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3. In Germany the professionalisation of university fundraising is in its infancy.
A definition of fundraising: fundraising is the strategically planned procurement of both financial resources as well as of material assets, time and know-how for purposes to serve the common good, using marketing principles. Professional fundraising requires specialist knowledge, money and passion. With only a few exceptions, German universities lack all three, as established by the first study on university fundraising in Germany.3 Only 13 universities have an office to coordinate fundraising activities. State-run universities have been getting more involved in fundraising over roughly the last 5 to 10 years, but not voluntarily, rather on account of falling state subsidies. Related to the lack of a firm social culture of donation to the sciences – that also is engraved on the minds of members of the university – fundraising is often not acknowledged as a highly professional job. Even in countries where fundraising has a long tradition, donations do not come automatically. American universities, which boast about their high annual charitable income, have huge fundraising departments – often with a hundred or more employees. The following circumstances currently stand in the way of the development of successful fundraising activities: • A lack of fundraising management (since most universities do not have a marketing department) • A lack of clear fundraising structures o In the USA professional fundraising is designated as “development”: “We develop opportunities for alumni to give” • Graduates hardly identify with their university o A lack of services during undergraduate years; the link is not maintained after graduation, no development of an academic WE-feeling, no professional alumni work.

1.2

Legal context

We need more favourable taxation law for companies willing to donate money Recently German tax law was made more donation-friendly, which could have a beneficial effect on the willingness of companies to donate money. Donations: state-run institutions of higher education and universities are public bodies and not liable for tax. Up to 100% of the income from donations can be spent for the purpose specified. For private citizens a donation up to the equivalent of 10% of their income is taxfree (in the USA up to 40%). Companies can offset against tax any donations equivalent to up to 5% of taxable profit or equivalent to 2/1000 of turnover. Foundations are liable for tax: their donations to nonprofit organizations can be offset against tax as special expenditure. Currently they can offset 100% up to EUR 307,000.

1.3

Scientific and University Foundations can fulfill important functions

Compared with other countries such as Great Britain or the USA, support for research by NGOs in Germany is provided on a small scale. Foundations can play an important role in this respect. In Germany one should mention in particular the „Stifterverband für die Deutsche Wissenschaft“ and the „Volkswagen Foundation“, which act independently, using their own capital, initiate reform processes, investment in innovation and help to overcome barriers that stand in the way of reforms.

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Study produced by DIE ZEIT, Centrum für Hochschulentwicklung (CHE), Deutscher Fundraising Verband (DFV) , 2005 www.che.de
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Of the 13,000 German foundations, 2600 have entirely or partially committed themselves to promoting research and teaching. 1750 foundations support young researchers and students, 470 foundations support a particular university. Around 410 professorships and 14 universities are financed by foundations (Bundesverband Deutscher Stiftungen - National Association of German Foundations - 12/2005). Since 2003 German foundation universities have begun to accumulate capital via university foundations, in order to generate appropriate amounts to finance research and teaching. Via fundraising and alumnus relations work, private capital can be attracted as a top-up to the capital stock, which in turn increases the foundation’s annual earnings. Some state-run universities are lucky, as for example the University of Potsdam, which received EUR 51m. foundation capital from the founder of SAP, Prof. Dr. Hasso Plattner, or the University of Mannheim, which attracted EUR 13.6m. in 2003, as well as the TU Munich, which received EUR 75m. worth of pledges within three years.

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Why did the University of Bremen choose this approach?

The state plays the lead role in the financing of higher education in Germany. German universities are significantly underfunded in comparison to the top universities in the USA, in Canada and Great Britain. From 1997-2003 the growth rate for scientific and research budgets amounted to + 0.5 %, thus ranking Germany at the bottom of the world growth league – only in front of those that posted a negative growth rate. Added to that are cost pressures on governments in the federal states, which result in the relative financial security that state-run universities have enjoyed over a number of years being called into question. In fundraising the University of Bremen sees an opportunity to acquire a secure source of income in the medium- and long-term, which opens up room for maneuver and at the same time drives the development of the institution’s profile and improves the quality of communication within the institution. The goals that one wants to achieve by developing and implementing a fundraising orientation include, the development of clear internal and external communication structures and – in the case of the members of the university – the courage to prioritize, to assume more individual responsibility, a clear avowal and espousal of the institution, the willingness to communicate with students and the public, development of contacts to alumni, to donors, both large and small. The aim of the University of Bremen is to rank in the “Top Fifteen“ of German universities, i.e. to develop the intended profile in research, teaching and administration, and adapt the research and study facilities accordingly and to support young researchers. This process can no longer be covered by the decreasing state funds from the State of Bremen’s budget – despite a high proportion of external funds attracted. New sources of income have to be generated. Such as: Currently: participation in a competition of excellence, to receive state support from the Federal Ministry for a defined program of further development Attracting foundation professorships For some 10 years now: activities in the areas of marketing, sponsoring and public private partnerships, up to now not typical for a state-run university and Rather more ad-hoc volume of donations (e.g. for scholarships, support for university publications and scientific congresses, the award of prizes and honors) of currently around EUR 650,000 p.a. (not including foundation professorships).

The establishment of the private International University of Bremen (IUB) in 1999 and its
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fundraising activities in the region, as well as the rededication of state-run universities into foundation universities in the neighboring state of Lower Saxony, has unleashed a discussion process within Bremen University about professional fundraising. In the Hanseatic City of Bremen there is a well-developed philanthropic tradition, which, up to this point, was mainly evident in support for the arts, culture and for social facilities.

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How to develop the appropriate fundraising strategy?

A persuasive strategy is needed, in order to interest donors in the sciences. And the strategy must fit the institution: the design for a traditional university with a technical and medical slant and with a well-functioning alumnus association has a different feel to it than, for example, a strategy for a modern university offering a broader range of subjects. The transition from the “enquiry stage” (is fundraising the appropriate instrument, to consolidate and increase the volume of donations to the university?) to the “action stage” was initiated by two fundraising experts, Professor Dr. Giles Hoydt, a researcher from the Center on Philanthropy at Indiana University and Dr. Lilya Wagner, one of the former directors of the well-known Fund Raising School, which is part of IU. Based on the experience of our American partner and on our own experience, the following points are important prerequisites to develop a “reasonable” and thus professional fundraising strategy: The university management needs to acquire its own impressions of professional fundraising work, in order to be able to evaluate the necessary preconditions and level of investment. The Rector of the University of Bremen, in order to become more professional in this regard, has been instructed in the principles and techniques of fundraising by two American experts. Besides participants from the Rector’s department, members of the administrative staff, who are primarily affected if the institution adopts a fundraising orientation, took part in 4-day workshop. In the months that followed this group took the first steps in producing a fundraising strategy, “suitable” for the University of Bremen.

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The management needs to say a loud “yes” to professional fundraising, i.e. it is a long-term task with high priority, and needs to make the appropriate structural, staff and financial investment. The University of Bremen has established fundraising as a core task, and the Rector is head fundraiser. It was clear to us that an unprofessional start – and the resultant lack of success in fundraising - could lead to insecurity within the institution and overall to considerable damage to our image and hinder the chances of a second try for years. A clear decision needs to be taken on whether the university fulfills the criteria to be able to take in donations for its own capital stock, for individual projects or also for a larger campaign (fundraising experts assume that for an intended target of EUR 100m., investment of around EUR 4m. over a period of 3-5 years is reasonable).The University of Bremen has decided against developing capital stock, given a lack of investment options, and decided on fundraising for individual projects. In order to clarify their social tasks and goals in communication with a non-scientist public, the institution needs to draft a mission statement. In 2001 as part of an organizational development process, the University of Bremen had already defined objectives, from which the mission statement was developed. (see fact sheet) The University of Bremen, in discussions with the faculties/deans, has defined binding criteria for the selection of projects to be supported through fundraising, as well as for communication with and first contact to potential donors. We have discussed strategy ideas with trusted people within and outside the university, e.g. people from public life (politics, business, culture) and thus tested our own perception of ourselves as well as the planned strategy (formation of groups of trusted advisors)

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Identifying the basic prerequisites

In the “Principles & Techniques of Fund Raising“ workshop, that the University of Bremen ran together with its US partner from Indiana in the summer of 2003, the first issue was answering the question about the “readiness of the institution“.
University of Bremen
Fund Raising Network rector's circle external advisory board major donors society of friends of the university "unifreunde" president 10 Alumni, 2 representatives of "unifreunde" internal advisory board fundraising president chancellor head of fundraising 5 to 10 scientists fundraising uni. members as ambassadors philanthropy forum spokesperson for the president

university management

friends and supporters

press and information office sponsoring / marketing

alumni groups, department-related (decentral)

alumni officers of the departments

central projects and events

alumni international, region-related (decentral)

Alumni Network

Table 1

Fundraising Network as implemented by the University of Bremen
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We cleared up the issue of “internal and external challenges and positive factors“ and produced a list of “goals and objectives“ (also see : “Fundraising Principles for Higher Education presented by Lilya Wagner)

4.1

Adapting the advice from our US partner to our specific needs, objectives and culture

4.1.1 Suggestions from our US partner, which we have followed:
Fundraising is a team effort: Networking the members of the university, who are open to and positive about fundraising. Reinforcement of and support for the core groups responsible for introducing fundraising. Formation of advisory groups to tackle a variety of issues o Are we ready to establish a foundation o What are the political aspects of funding, i.e. how can we avoid losing state funds due to us? o Develop private sources. o Very important: formation of a Rector’s advisory body with external members. The members of the workshop formed the core group and developed the first ideas on a fundraising structure and a suitable fundraising concept. The basis was the “Operating Plan for Fundraising“, which we drafted jointly with our American advisors in the workshop. The tasks for the first 12 months were defined here, as were the recommendations for long-tern planning over a period of 4 years. The challenges included not having a start-up budget and at the same time the implementation of many reforms at the University of Bremen, which required all those involved to demonstrate a high degree of flexibility and willingness to reorientate: the Bologna process, a new pay structure for university teachers, new staff categories for junior professors, the first discussions about the introduction of tuition fees. The university management said a loud YES to develop fundraising as a source of income, but also with a requirement to budget well, i.e to make do with existing resources. Since the members of the university were confronted with many changes at the same time, the introduction of fundraising was accorded the same high priority as other important issues.

4.1.2 Divergence from the recommendations of our US partner:
The recommended establishment of a foundation was put back to a later date, since the search for support for a model plan „development of a philanthropic network to benefit a public university“, with the aim of establishing a foundation was not successful. A (expensive) market potential analysis was not commissioned by the University of Bremen, since it was decided to make our alumni the main target group of our efforts to find donors. In the medium- to long-term we hope to acquire valuable information about donor behaviour from the results of the research into philanthropy in the Bremen region. The recommended purchase of a database was made first at the beginning of 2006, on account of interface problems with existing databases (alumni) and related costs.

4.1.3 Important aspects of the Bremen fundraising concept:
• • • Fund raising has been established as a centralized task. Systematic acquisition of non-self-interested donors. Philanthropy = the joy of giving, and a resulting attachment to the University of Bremen form the basis our fundraising. Graduates are to be the main target group: “Alumni become donors“
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• •

The members of the “Society of Friends of the University“ dedicate themselves to recruiting private citizens and companies in the region. Criteria for fundraising projects: they are of general significance and in the interests of the entire university, should not be implemented using budget funds, are innovation projects, which give impulses for new developments, they are interdisciplinary projects for teaching and research, in particular support for new talent and projects, which lead to improvements in student conditions for as many students as possible.

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First steps of anchoring the fundraising approach and building a fundraising competence and culture in the institution

In the first 12 months the “fundraising“ core group was the discussion forum within the university.

5.1

Infrastructure:

Fundraising is “people give to people“: the fundraising figurehead is the President/the Rector of the University. The chief fundraiser has a challenging job to do. We have described this job as follows: important prerequisites are an outgoing personality, communications skills and identification with the institution. He or she regards the job of fundraising as an agreeable and exciting activity and uses his/her meetings with personalities from the world of politics and business to fire people up for his/her university. Internally he signals the high priority that fundraising has for the successful development of the institution, because it leads to more autonomy and independence from public sources of funds. He/she first meets with potential donors, when a pledge for a significant donation has been made. For half of her working week the spokeswoman for the Rector will act as Fundraising Project Manager, getting 4 hours a week staff support in organizational matters. (According to the experts, every EUR 500,000 of donations require one fundraising post, which is safe for at least 3 years). She will act in accordance with the defined fundraising philosophy, will develop the communications strategy and guidelines, will network the organizational structures within the administrative department and will look after the advisory bodies; she is the contact for donors and will prepare project campaigns.

5.2

The administrative department:

Development and implementation of organizational procedures in the administrative department. A first attempt to get more information about all previous donors, showed, for example, that in the finance department donations were being booked to various “pots”, involving the time of a number of administration staff. Here a new, centralized structure was put in place, with one contact. Processing, organization and communications in the area of scholarship programs was also being dealt with by a number of centralized and decentralized departments. As a first step, communication with all scholarship benefactors was centrally organized.

5.3

Communication /Institutional culture:

To reach the stage of being a successful fundraising university, we see it as essential that gradually all members of the university learn and live the relevant culture of communication. To give a real example, the Rector started mentioning in all speeches given inside and outside the university that we want to open up a new source of income by fundraising, and thus it is being developed as a centralized and long-term mission at the university. The first steps included: The development of a communications strategy for future and existing donors, the definition of communication guidelines for contact with potential donors and sponsors. Here it became clear that there was a wide divergence between administrative language and actions and the desired style of communication with existing and new donors.
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The definition of criteria for scientists, who support the university in fundraising activities as ambassadors. Development of and agreement on a concept for the systematic expansion of our “community bremen“ alumni network • Offers and programs for alumni: development of a career network, annual central event: “Welcome to New Alumni“

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Presentation and discussion of the fundraising concept • in the Deans’ Conference, • in the Academic Senate, • at meetings of pensioners from the administrative department and science faculties Articles about the Bremen fundraising concept in the university-internal newspaper. At the end of 2004 the Rector had assembled a top-class panel of advisors (Rector’s Circle) and a university-internal panel of advisors. 10 University of Bremen alumni, who have enjoyed successful careers and worked in the relevant social fields, were recruited to the Rector’s Circle. They donate a minimum 4-figure sum to the university every year and see themselves as active supporters and people to open doors, who make their professional and social networks available to the university for fundraising purposes. All members of the university that are involved in fundraising by virtue of their responsibilities will be the first to drive the institution’s new orientation forward. Areas, which affected by fundraising include: the Alumni Network, Sponsoring, Career Center, Press Office, Finance Department, Department for Students, the Event Department. Via the workshop held with our American partners, one representative from each of the above-mentioned areas learned the fundamentals of fundraising, and this was consolidated and extended in regular meetings of the core group. Working together with the Philanthropy Forum (a facility within the Center for Further Education at the University of Bremen, which was agreed as part of the cooperation agreement between the University of Bremen and Indiana University and its Fund Raising School), the appropriate courses are developed to provide other members from the science faculties and administrative department with a fundamental understanding of fundraising und our special concept. Furthermore the Forum has taken it upon itself to initiate research into philanthropy, as well as to develop fundraising modules, and integrate these into the curriculum of certain courses in cooperation with the university. In this way our students will be sensitized on the subject as part of their education.

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Challenges, Pitfalls and Successes in the process of implementing a fundraising culture Our Future Challenges
To keep on activating the change of mindset which is needed from the people involved: Philanthropy is a philosophical attitude towards the world and not just another way of acquiring funds. To get all those involved to work in accordance with the agreed integrated communications concept. To keep calling upon the deans/administration managers to introduce and further develop the fundraising orientation in the faculties/administration department (a separate issue in the contract between management and faculty?) and also to document this in their Statements. To convince scientists, who do not see the need for fundraising. To accentuate the university’s “treasures”, i.e. also to reveal the social relevance of scientific work, in order to persuade as many people as possible of the necessity of an independent scientific community.

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6.2

Pitfalls and Obstacles
Don’t underestimate: the fact that ambassadors will require constant further training and personal meetings with the Rector, in order to act in accordance with the fundraising strategy. We have learned that the presentation and discussion of the concept are not sufficient. Ambassadors become active when they feel they have been well informed and kept up-to-date and prepared for their speeches in each case. the fact that continuous, open communication is needed between all fundraisers, to avoid duplicated speeches, for instance. We have learned that discreet fundraising work led a potential donor to cancel a pledge, because the latter was approached by two scientists with different donation models. the communication barriers between the administrative department and donors. Thus a donor, who supports a scholarship program, should not, for example, receive a reminder if he has not paid up his annual donation. the communication barriers between scientists and potential donors: the willing sponsor would like to know what is intended with his money in a particular subject, and he receives from a scientist a plan, which is crammed full of technical terminology and thus not comprehensible even to an interested layman. the jealousy which arises when certain persons and areas are singled out in the process of building up the institution’s profile. the competition between faculties and between the faculties and the central administration the staff and financial inputs required to manage potential and existing donors. Relationship management is a whole new task and here we must gain experience, in order to attain a reasonable and efficient working structure.

6.3

Successes
The members of the Rector’s Circle and those of the internal advisory groups have become active ambassadors for the university and have begun to put their professional networks at the university’s disposal. The Rector is increasingly being approached by wealthy private citizens, who would like to do something for the university. In the past 2 years 4 new scholarship programs with 15 doctoral grants could be instituted with help from one company and 3 private citizens. The concept to develop the “community bremen” alumni network is bearing the first fruit: o Active alumni in the region have instigated a regulars’ gathering and want to make their networks available for the benefit of the university; o 300 alumni donate their time and know-how to us, by making themselves available as advisors for our new graduate career network; o Successful alumni organize the central event “Welcome to New Alumni“ as hosts and sponsors; Many partners have been showing their interest in the university more strongly, so that the Rector invited friends, supporters and sponsors to a reception for the first time, and it was entirely sponsored by one partner.

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Conclusions

After two years the University of Bremen has reached the point where it can not only actively plan its first fundraising projects, but can also implement them. Our experience from the first two years shows that to instill a fundraising culture in the university requires equal amounts of patience, tenacity, capacity for frustration and powers of persuasion. Winning over interested parties is no feat. For a variety of reasons every institution has its sceptics or thwarters, who do not even want to be burdened with this task or fear that the university is “selling its soul”. We believe that doubts can best be removed by openly communicating plans and expectations, which go with fundraising, as well as the minor achievements. The self-assurance of an institution must – especially in times where money is tight – always be reinforced. We have decided that, by giving honors and awards to supporters and donors, we want to demonstrate clearly both within the university, in society and in public life that the University of Bremen has important advocates, donors and supporters. Fundraising is in the first instance a long-term communications task. Key issues for discussion in the “working group”: • How to keep on activating the change of mindset, which is needed from the people involved? What possibilities are there to reinforce a fundraising culture in the university and to bring it to life? • How can individual fundraising activities, both within the faculties and centralized, mange to co-exist within the institution.

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