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Annual Funds Face Challenges in an Age of Involved Donors

“Tradition.” “Legacy.” Those are the words that fund raisers once used to inspire donors to give to their alma maters.

Not anymore, says Jon Hysell, executive director of annual giving at Hamilton College, where more than 170 annual-fund officers convened last week to exchange knowledge about the once-dependable workhorse of academic philanthropy. “These words just aren’t as captivating to young alums in particular, who have a myriad of choices thrown at them everywhere they look,” he says.

Annual funds, Mr. Hysell says, have become a tough sell in an age when philanthropy has been divided into such micro units that a donor can give a tablet to a specific fourth-grade class. But in the wake of the 2008 financial meltdown, never have donations to annual funds been more critical.

While he declines to characterize the institution of the annual fund as “in trouble,” Mr. Hysell says that participants at last week’s annual conference of Sharing the Annual Fund Fundamentals, which is known as Staff, talked extensively about the need for annual funds to adapt to a new generation of donor.

Donations to Hamilton’s unrestricted annual fund accounted for roughly a fifth of the $30-million in overall giving to the institution last year. Richard C. Tantillo, Hamilton’s vice president for communications and development, notes that annual funds supply an average of 4 percent to 7 percent of a college’s annual operating budget. He says that 95 percent of alumni donations are made to an annual fund, and administrators have traditionally been allowed to spend the money where it is most needed.

“But what we’re migrating to in the business is a model where people can specifically designate where their money goes,” he says, “for athletics, for student financial aid, for career-center internships, for a particular building project on campus, to an academic department.”

Mr. Tantillo points out that an annual fund, as opposed to other high-dollar forms of philanthropy, allows a college to engage with alumni early in their careers. They can give $25 or $25,000; either size of gift brings them into the fold and makes them part of the college’s larger community.

But, he adds, “the donor motivation is changing, and if we’re not ahead of that, we’re going to lose out.”

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