Philanthropy and Education

Finding the Funding: The Professionalization of Development in American Higher Education

Editors’ Note: Today, John Thelin opens this site’s forum on the relationship between philanthropy and education. Readers, please feel free to comment on these posts, both via the comments section and Twitter, and please do reach out to us with post suggestions. And though we are moving on from last month’s discussion on philanthropy & inequality, also please feel free to comment on those pieces and to suggest follow-up posts on that topic as well.

Our discussions about philanthropy understandably gravitate toward major donors and board members of established foundations. “Transformational” figures such as Bill and Melinda Gates in the 21st century or Andrew Carnegie and John D. Rockefeller a century ago may be center stage, but hardly are the only characters in the drama of giving and receiving. Over-looked are the less spectacular supporting cast who professionalized fund raising. They have left an impressive legacy, one that makes it difficult to find a college, university or other nonprofit organization today which does not have an office of development – usually led by a Vice President. How did this come about?

American colleges have always devoted attention to fund raising. But its urgency picked up with the change from the colonies to the “United States,” as each eleemosynary institution, especially colleges, had to renegotiate its charter. In an earlier era, royal charters were hard to obtain. If, however, a college were so fortunate as to have one, it usually meant that the Crown would provide ample funding. After 1785 American colleges faced a “new deal” with the creation of a “new nation” in which state legislatures were generous in granting charters – but not generous at all in assuring annual appropriations. A grant of some cheap land and a handshake for best wishes sealed the deal. Each college, whether Harvard, Yale, Brown or William & Mary or the new University of Georgia, had a charter which provided some legal protections and what was tantamount to a fishing license for landing private donors.

The competitive quest for institutional survival in the early 19th century was characterized by the Harvard dictum, “every tub on its own bottom.” Most college presidents were ordained ministers – a background that meant they were no strangers to passing the collection plate and twisting arms for tithes and tributes. Most colleges survived on a year-by-year basis – and did so in part by keeping personnel expenses low. The one exception, in addition to the typically powerful and well-paid president, was the hiring of a “college agent” whose job was two-fold: find students who could pay tuition; and obtain pledges from donors in the local community and region.

This persistent hard-scrabble job gained a boost in the late 19th century when a new generation of fund raisers from a variety of service and charitable institutions staked out a new prosperous group of mercantile and industrial wealth. Church associations took the lead in raising money for their synods or dioceses and related schools and hospitals. Here a figure such as Frederick Gates of the American Baptist Education Society based in Minneapolis was exemplary. He led by example in persuading donors and also provided fund raising novitiates with codes of conduct and regulations. In addition to rules of decorum, Gates’ advice was pragmatic, as well-behaved “canvassers” became skilled at “landing trout” who were “heavy with gift” – a nickname for donors which gave belated fulfillment to the “fishing license” metaphor from the early 1800s. A growing number of educational, civic and charitable organizations hired professional fund raisers, who often were known as “honorable beggars,” what historian James Howell Smith has called “the middlemen of American philanthropy.” One sign of the organization and growth of – and demand for — their work was the creation in 1935 of The American Association of Fund Raising Counsel. Some of these “middlemen,” including Frederick Gates himself, eventually switched roles from raising money to being advisors to wealthy philanthropists as they considered their support of various proposals and projects.

By World War I some state universities, especially in the Midwest and Pacific Coast, had started to acquire systematic state appropriations – an innovation that spared them some imperative in private fund raising. But in an era when the majority of institutions were “private” (or, “independent”) presidents and boards gradually recognized the need for organized fund raising campaigns. It is interesting to note that professionalization of fund raising for higher education tended to take place outside the campus – with the proliferation of fund raising firms with which colleges would contract for some specified services, such as running a capital campaign or developing alumni donor rosters. At some of the more innovative flagships state universities presidents decided, especially during the Great Depression, that state appropriations were necessary but insufficient to operate and build a great university. Hence, one finds at the University of California, the president who was well connected with both the state’s business leaders and the governor, created the honorific “Order of the Golden Bear” – an inner sanctum of loyal, influential alumni who were dedicated to bringing major corporate and individual donations to Alma Mater.

After World War II the expansion and sophistication of development offices and fund raising at the campus level was part of higher education’s “managerial revolution” which expanded high level administration, with an increased stake in an institution’s performance and goals. It meant that a Vice President for University Relations would orchestrate an umbrella structure which included fund raising, public relations, alumni relations, government relations, legal counsel, and investment management. One sign of professional maturity was the founding and flourishing of professional associations, such as CASE — the Council for Advancement and Support of Education, whose national headquarters and conferences were in Washington, D.C. True, the college or university president remained the central figure in “making the ask” for major gifts. But it was preceded and accompanied by an elaborate university relations staff.

The irony of the professionalization of development within a campus is that its success and high priority created a new set of internal tensions. On the one hand, the dean of each academic unit ultimately was responsible for her or his own fund raising – and usually added a director whose service was to a particular college such as engineering or business or agriculture. At the same time, the Vice President for University Relations held the reins of a centralized, coordinated approach to fund raising, with power to grant or deny a dean access to a potential donor who might also be on the prospect list for another dean. Creating clusters of “haves” and “have nots” in a multi-purpose university meant that fund raising often shaped the future by identifying the particular new programs and projects a college or university would favor. The result was a highly competitive approach to organized fund raising that remains distinct among nonprofit and educational institutions worldwide. Most important, the professionalization of the development office meant that fund raising writ large would have a seat at the table of the president’s cabinet and be integral to discussions, if not decisions, about college and university academic priorities.

-John R. Thelin

John Thelin is Professor of Higher Education & Public Policy at the University of Kentucky. He is co-author with Richard W. Trollinger of Philanthropy and American Higher Education (Palgrave Macmillan, 2014). In 2013 the co-authors received the Grenzebach Award for Outstanding Research on Philanthropy and Education from the Council for the Advancement and Support of Education.

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