Wasting Money

By Mark J. Drozdowski

New York City is a wonderful place to visit if you're in the mood to spend money. That's especially true during the holiday season, when the charms of Rockefeller Center and the lure of retail nirvana entice even the most prudent among us to flash plastic at every turn.

It's also a great place to raise money. Many of the largest foundations and corporations, along with wealthy individuals, call New York home, so fund raisers -- notably those in the Northeast -- often find themselves pounding that particular pavement.

And here's something I wouldn't need to point out if it weren't central to my story: The city is expensive. A recent trip there reminded me of this and made me reconsider how I spend my institution's money.

I went there to visit a foundation whose five-year, six-figure grant to us had expired. It was ripe for another ask, and I was bringing the president and provost along for ammunition. A few weeks in advance I'd called to reserve a hotel room where the president routinely stays, only to find that the room's ransom would exceed $400. A tad steep, I thought, even for the holiday season. So I asked about discounts. Nonprofit rate? Nope. Was I with a party? I said there'd be three of us, and that we'd no doubt be rather festive. No dice.

A little later the provost called me to express similar shock. Were we sure we wanted to stay at such a pricey pad? It was only one night, we rationalized, and we were, after all, going to retrieve another major grant, so the return on investment would justify things. Just to assuage our guilt a bit more, though, the provost and I decided to cut corners by driving to Connecticut and taking the train.

The president would meet us in the city. He was flying in from New Hampshire that morning on a flight due to arrive around 12:30 p.m. Our appointment was at 2 p.m., so we figured it would be a close call. And rain was in the forecast, promising to slow his progress.

We drove down on a Sunday for our Monday meeting. Neither of us had other business in the city, but we were planning social visits. I had tried getting in to see other foundations and a corporation or two, but it was rather short notice and I had nothing cooking with anyone else at the time. All of our proverbial eggs, in other words, rested in one foundation's basket. At least the president was staying a few days to see other prospects.

Monday morning was all about killing time. Of course, that's easy to do in New York. Bravely sporting my Red Sox knit cap, I finished some holiday shopping, did some sightseeing, and had lunch with a friend, all along remembering I was on the college's dime. But that's just part of the job, I figured, and the foundation grant would make it all worth it.

I caught up with the provost back at the hotel, where we were supposed to meet the president before heading to our appointment. Not surprisingly, the president was a no-show, so we had to leave without him. I left instructions on his cellphone to meet us at the foundation.

We arrived promptly and met the new program officer responsible for our grant, which supported a lecture series on the campus. I'd written her a letter a couple of weeks in advance confirming our appointment and recapping how we'd conducted the series over the past five years. She commended us for a wonderful job, noting that we'd attracted famous speakers, including a Nobel Peace Prize winner and a television talk-show host. She thanked me for sending such detailed reports along with press clippings and videotapes of the presentations. We really went the "extra mile," she said, and the foundation appreciated how thoughtfully and judiciously we spent its money. Were we thinking about extending the series?

Glad you asked, I said, launching into my pitch, which I think I sustained for about two minutes without taking a breath. I ended by suggesting that the foundation consider endowing the series so we could continue it in perpetuity (a favorite word among fund raisers). Suitably impressed with my performance, I sat back and gave the "you can thank me later" nod to the provost.

I can sum up the program officer's response in one word: No.

She said we were no longer a good fit for her area, that her emerging focus lay elsewhere. Were the guidelines to expand, she'd be happy to entertain a proposal. But for now, it was goodnight Irene. So much for perpetuity.

Right about then, as I was checking my watch to see if we could escape the city before rush hour, the president arrived. After a few minutes of harmless palaver, he pitched while the provost and I desperately tried to send him telepathic stop signs. We had to endure the program officer's explanation once again, after which the president had the same look of bemused frustration we'd displayed moments ago.

So there we sat, the college's top two administrators and their development henchman, calculating the cost of this glorified stewardship visit. My guilt wouldn't allow me to do the math. The time. The room. Meals. Tips. Taxis. All to say "nice to meet you." Return on investment? Ha! I felt ill.

On the sloshy walk back to the hotel, the provost said she didn't consider the trip a waste of time. We had strengthened our relationship with a major foundation, and we could eventually reap dividends. Not this fiscal year, I reminded her.

Still, I couldn't escape the irony. The program officer had praised us for carefully stewarding the foundation's funds, for making each dollar count. And we had. But at the same time, how careful were we with our travel budgets? What if the foundation knew the extent of our two-day junket?

We could argue that we weren't spending its money on this trip, but as one former CFO colleague explained to me, it's all one big checkbook. Wasting money is wasting money, regardless of where it comes from.

OK, you might think, that wasn't exactly a waste. We had to visit the foundation and try for another grant. And we all know that face-to-face visits beat letters and phone calls any day, especially when the president and other senior officials attend. Right?

Yet I could have accomplished essentially the same result by phone, at least for the short-term. Had I simply called the program officer and explained my intent to request another grant, she no doubt would have told me not to waste my time. And money. By the same token, she could have anticipated my plans and called to make her position clear. But I'll take the blame for this one.

I'll take the blame, though I'll share it with the fund-raising tenet that elevates the importance of personal visits. People in development figure that meeting with a prospect establishes a bond that can't possibly be forged by a telephone call, and certainly not with a letter or (heaven forbid) an e-mail message. And that's true. Sometimes, though, we take this obsession with visits too far.

Let me offer Exhibit A. At another institution where I worked for some time, I managed my own major-gifts portfolio along with the usual stable of corporate and foundation prospects. I was recruited to this effort because the university had established an ambitious agenda to meet thousand of suspects (I mean, prospects) in advance of a capital campaign.

We devised endless lists of people across the country, some of whom were recent graduates unable to give big bucks. Our job was to meet and greet, to update alumni on the university's progress, and to warn them of an imminent campaign. We didn't ask for money, and many of the folks we met weren't interested in making gifts anyway. I, along with a dozen or so colleagues, logged plenty of frequent-flyer miles saying hi. Did this fishing expedition pay off? Call me a skeptic.

Fueling fund raisers' fanaticism about face-to-face visits is the standard evaluation structure that measures inputs (letters, calls, visits) as well as outcomes (money raised). Major gift officers, in particular, adhere to monthly, quarterly, or annual goals for prospect meetings, so it's easy to see why some may be driven to meet with anyone, anytime.

If that's your imperative, fine. But let's be smart about how we spend our time and our institution's money.

Should we fly 2,000 miles to meet with three mid-level prospects who've never given? Maybe a letter or a call would suffice at first. If we are to take a long and expensive trip, at least we should pack in as much activity as possible. It's easy to see five or six people in a day; save some of the sightseeing for the family vacation.

And let's talk about those related expenses. Do we need to stay in five-star hotels (mea culpa), order room service, watch a $9 pay-per-view movie, call home seven times, raid the minibar and hope to sneak it all past the accounting-office moilers? Might we make do with a Kia rental instead of the Lincoln? How would you spend your own hard-earned cash?

Early in my career I heard a seasoned development professional speak about how he cut corners to save his institution money. He would walk long distances instead of taking taxis, stay at dives, and pack sandwiches. I doubt many fund raisers go to those lengths, and I've never seen a nattily attired fund raiser riding a rickshaw down Fifth Avenue. But he made a good point, one that resonated with me rather profoundly as I gazed out my 22nd floor window at the glitz and glitter of Times Square.