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Community College Foundations: Fundraising and Endowment Management Strategies for the “New Normal”

In late April 2013, the New Community College at CUNY (NYC) received a grant of $15 million - one of the largest gifts ever for a Community College. A gift this size is rare and will have a significant impact on this college. The donation also puts a spotlight on community colleges, an important sector to both higher education and the local communities they serve.Community colleges are becoming increasingly more popular today as families consider the rising costs of traditional four-year institutions. Attending a community college and then transferring to a four-year school to complete the education has proven to be a more viable option in managing education expenses and is one of the reasons community colleges have seen record enrollment levels.

However, for public community colleges, the benefits do not come without their challenges. Even with increased enrollments, state and local governments have continued to reduce their funding levels, causing community colleges to review their financial and strategic plans in order to enhance their private fundraising and endowment management efforts to better fill this gap.

One way community colleges are maximizing their fundraising and investment strategies is through the use of separate foundations. Foundations can be beneficial to community colleges, such as to increase board leadership and volunteer opportunities for board directors, who in turn can be substantial donors; to help keep the fundraising, operations, and administration in a separate area away from the core operations of the college; to allow the college to have a more focused marketing and branding strategy; to create a structure to manage the college’s investment portfolio and to limit liability of assets from any college-related litigation; to keep college finances separate from any fundraising efforts; to provide another separate pool of funds that can be used as collateral for loans; and as a fundraising vehicle for foreign colleges and universities.

Through an independent research study we conducted analyzing 207 community colleges in the mid-Atlantic and Northeastern United States, we found that almost 80% of the community colleges have separate foundations, and a majority of these foundations are managed as long-term endowment structures. The foundations had a wide range of board of directors’ size, with an average of 22 directors.

In addition to analyzing the use of foundations, our study also looked at the diversified fundraising strategies colleges are utilizing today, along with the different investment strategies being employed. To read our research study in its entirety, please visit Community Colleges: Insights on Fundraising and Endowment Strategies.

In order for community colleges to succeed, they need to continue to look at private philanthropy as four-year traditional colleges have done for many years. Philanthropic dollars will be even more important in the future, and separate foundations will be a key strategy for enhancing and managing a robust fundraising plan. The strongest community college foundations will be those that can maximize their fundraising efforts while effectively managing their endowment funds over the long term.

Walter DillinghamThe above is a guest post by Walter J. Dillingham, Jr., managing director and business development officer in the Endowments and Foundations practice of Wilmington Trust, a national wealth management company whose offerings include personal trust, wealth planning, fiduciary, asset management, and family office services. 

Topics: Fundraising