Building a financial fundraising case: a successful fundraising plan involves sharing data, tying donors' values to the cause, and then careful stewardship of funds.

IT'S NOT UNCOMMON FOR A capital campaign or annual fund drive to focus on scholarships or need-based grants. Here's how financial aid officers can help advancement staff make their fundraising case--and avoid pitfalls in establishing endowed scholarship programs.

1. SHARE THE NUMBERS--AND THEIR IMPACT.

An excellent place to start is factually demonstrating the need for funds. An aid officer should provide data to show:

* Evidence of the growing gap between tuition charges and the typical enrollees ability to pay.

At most institutions of higher education today, the expected family contributions calculated for aid applicants have not kept pace with rising costs. Consequently both the level of need and the percent of students applying for need-based aid have usually increased over time. In addition, the purchasing power of federal and state grant programs have declined, and the debt levels of graduating students have increased. At some IHEs, enrollments of students in certain income ranges have fallen off, affecting socioeconomic diversity. Demonstrating these trends through easy-to-read charts can help clarify for potential donors that a growing number of students can't attend the school without assistance.

* Trends in yield rates among high-ability students, or students with other desirable characteristics.

This data can help demonstrate the "willingness to pay" of students most at a premium in an institution's applicant pool. Contrasting the yields on those receiving scholarships with those not funded can help donors see the impact of financial aid on enrollment behavior. Students strong in academics or with other attractive characteristics will have the most other options to consider. Show donors the difference their contributions can make to your institution's ability to enroll desirable students.

It is also often the case that students who don't apply for financial aid have much lower yields than those who do. While this may, in part, be a reflection that students from higher socioeconomic backgrounds typically have more college options to consider, these results also include needy students who have either lost interest in the institution, or who have decided the institution is not affordable.

Being able to make financial guarantees to students based on publicized criteria (e.g., merit scholarships based on academic records, or need-based aid guarantees for those with incomes below a certain level) can help keep those students interested long enough to put together a full financial aid award for their family's consideration.

The most sophisticated IHEs go beyond simply sharing yield data to building predictive models that demonstrate how an additional $1,000 in scholarship or grant funding targeted to sub-populations can impact the composition of the class.

* Examples of the scholarship programs and financial aid discount rates being funded by key competitors.

Get a donor's competitive juices flowing by providing evidence of offers being made by institutions competing for your applicants. Institutional websites and the Integrated Post-Secondary Education Data System (http://nces.ed.gov/ipeds/cool/index.asp are good sources of this information.

* The success of previous winners of funded scholarships and grants.

Donors like to know that the students receiving funding are excelling. Report on the success of previous recipients of endowed scholarships using measures such as average GPA, retention rates, campus involvement, etc. Although more difficult to gather, being able to show the impact that receiving institutional financial aid has on alumni giving can also send a powerful message to potential donors.

2. MATCH PROGRAMS TO POTENTIAL DONORS' VALUES.

Some institutions have been more successful at approaching donors about funding paid internships, study abroad programs, or other experiential learning opportunities, rather than pure scholarship programs. Other donors may be interested in funding on-campus employment opportunities. Probably the best-known program of this kind is the Cornell Tradition. It started in 1982 and continues today under an umbrella program called the Cornell Commitment. Jim Scannell's book, Shaping the College Experience Outside the Classroom (Boydell & Brewer, 1996), covers this and similar programs.

3. BE A GOOD STEWARD.

Effective stewardship of existing accounts is critical, too, both when requesting additional contributions from prior donors and when approaching new donors. To that end, communication between the Financial Aid, Advancement, and Finance offices must be timely and effective. Responsibilities for communicating with students and donors must also be clarified.

There's no "right way" to organize for effective stewardship. At some institutions, the Financial Aid office is responsible for offering the awards, balancing the accounts, and sending recipient names to Advancement, while Advancement is responsible for soliciting thank-you letters from students, arranging events to bring donors and recipients together, and communicating with donors about how their funds were spent. In other cases, these responsibilities are differently distributed.

At The University of North Carolina at Chapel Hill, an institution known for its success with financial aid fundraising, the Office of Scholarships and Student Aid is responsible for stewardship on all scholarship funds. As Shirley Ort, associate provost and director of Scholarships and Student Aid, explains, "Every scholarship gift (regardless of how large or small) is acknowledged promptly by a thank you from our office. Thank-you letters are generic, but are tailored to gift levels so that the message is appropriate. These generic gift letters are rewritten and 'refreshed' every three months."

UNC also sends personalized thank-you letters for significant gifts. And after a memorial scholarship is established, staff members inform the family about who has sent gifts to the fund in memory of the loved one (without disclosing amounts). That courtesy to both the grantor and the family initiates subsequent good will and correspondence between those parties.

Ort adds, "This process takes time, but it creates considerable good will and is a wonderful manifestation of both courtesy and caring on behalf of your office and the university. But remember, accuracy is everything, lest poor communications feel as though they are an insult to the deceased."

The key is clear communication to ensure that all critical stewardship functions are being handled by someone and that no accounts "slip through the cracks."

Good stewardship can also be influenced by the commitments made when the fund was first established. Some pitfalls for advancement administrators to avoid include:

* Allowing restrictions that will make it difficult for the Financial Aid office to identity an appropriate recipient.

Most Advancement offices build in some flexibility so funds can be awarded even if the donor's first preferences can't be met. Ort says aid officers need to make sure advancement staffers "understand why fund authorities have to be written in a certain way so that administrative procedures work well and are not overly burdensome." She advises explaining how the preferred administrative parameters benefit the school, the donor, and good stewardship efforts.

* Setting the minimum for establishing an endowed award too low.

Some institutions require just $10,000 to $15,000 to establish an endowed scholarship account. Assuming a 5 percent spending rate, these funds would generate $500 to $750 annually. Given today's prices, particularly at private IHEs, awards at this level are simply not effective, particularly if the recipient is expected to fulfill a set of obligations (e.g. attend an event, write an essay). Establishing a minimum of $25,000 to $50,000 for an endowed scholarship fund is more appropriate.

* Promising to make the award before sufficient earnings or gifts have accumulated.

Tracking awards made prior to the existence of funds to establish the scholarship account is a manual effort which is subject to human error that can backfire from a stewardship perspective.

* Failing to communicate a new fund being established to all appropriate offices.

It's critical that both the finance area and the Financial Aid office be informed whenever a new scholarship is established, as well as when the funds become available, even if the office selecting the recipient is an academic department. This will ensure that funds are not going unspent because no one knew to award them. Using the Financial Aid office to disburse all scholarship awards--even if another office selected the recipient--ensures accurate record keeping and enables the institution to avoid over-awarding federal aid recipients.

INSTITUTIONAL TEAMWORK 

As any advancement officer can tell you, the key to fundraising is linking the institution's needs and the donor's desire to make a difference. That makes financial aid a natural fundraising opportunity. Financial aid officers can help advancement by strengthening the case for support with data, by developing creative programs that will appeal to donor values--and by effectively stewarding existing funds.

Ort's advice: "Make it easy for the Advancement office to tell your story. Write the stories. Draw the pictures with data. And tell different and multiple stories." Similarly, Advancement can help Financial Aid by implementing effective protocols for establishing and communicating information about scholarship funds, and by ensuring that restrictions on their use are sufficiently flexible. Both offices--and ultimately the students--will benefit when they work as a team.

Kathy Kurz and Jim Scannell are partners in the enrollment management consulting firm Scannell & Kurz. They can be reached via their website www.scannellkurz.com.