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How Will the New CASE Standards Impact Campaigns Going Forward?

It’s been easy for institutions to get swept up in the fundraising arms race over the past few years. As one institution sees another institution raise millions—or billions—of dollars in a comprehensive campaign, leaders have felt pressure—both real and imagined—to keep pace.

At GG+A, we have long held the position that the arms race is a losing battle; when confronted with clients and prospective clients focused on specific dollar objectives, we’ve responded with a simple question: What do you want to achieve with those fundraising dollars? Our decades of experience has taught us that the answer to that question should be at the heart of every campaign narrative. While large fundraising totals may matter to some individuals within an institution, research has consistently shown that impact is the top motivating factor that drives high net worth individuals to give.

CASE recently published the CASE Global Reporting Standards—an update to its common set of standards, guidelines, and definitions for reporting the results of educational philanthropy activities at schools, colleges, and universities across the globe—which may alter institutions’ reporting structures. Given that those changes may cause some institutions to struggle to hit the top-line numbers they previously achieved, we believe that now is an ideal time for organizations to shift their focus to the potential impact of their campaigns. By adopting a primary focus on impact, institutions can help ensure that they achieve the visions they set forth in their campaigns.

Three significant areas of change

While the CASE Global Reporting Standards are wide-ranging, in this article we’ll discuss three key areas that will likely have significant implications for many institutions:

  • Bequest expectancies
  • Philanthropic research grants
  • Intellectual property gifts in kind

The new standards state that bequest expectancies can only be counted when the donor will be at least 65 years old by the end of the counting period. That’s a departure from previous standards that left it to institutions to set their specific age thresholds. By establishing a standard age, CASE may lead some institutions that had an age threshold higher than 65 to adopt CASE’s lower standard. Those organizations will likely see bequest intentions’ share of their total giving rise, while institutions that previously had a lower threshold may see bequest intentions’ share of their total giving fall. For context, bequest intentions make up about 17% of total new annual commitments at large, high-performing public universities—many of which have long used relatively high age thresholds—according to GG+A data.

There’s good reason for using a relatively high age threshold. While the average age for making a first charitable planned gift is 53, half of those who have a revocable charitable gift in place alter them, according Giving USA’s “Leaving a legacy” report. Of course, that also means that half of donors who have charitable gifts in place either do not alter them or, when modifying them increase the value (45%) of their planned gifts. It’s worth noting that increases in gift value are most likely to occur among older donors.

The standards also state that universities cannot count philanthropic research grants when the grantor receives a benefit. They note that institutions shouldn’t include governmental research grants or pass-through governmental research grants that route through another university or nonprofit organization.

This change helps ensure that institutions are counting dollars that appropriately reflect upon the fundraising program’s effectiveness. Many institutions already opt not to count these grants or count and report on them separately. That said, we believe advancement programs—and their principal gift programs in particular—need to become more aligned with their institutions’ offices of sponsored research. Since January 2020, more than 70% of higher education gifts of at least $50 million funded research, according to GG+A research. This close alignment helps to leverage all university resources for the greatest impact while maintaining a clear divide over where those dollars originated.

Finally, the standards detail that an institution should exclude counting intellectual property gifts-in-kind, such as patents and computer software that’s under development if it cannot determine a fair market. That’s notable given that their value to the institution might be impossible to predict (and will rarely equal the deduction that a donor might be able to claim). That uncertainty can create a disconnect—particularly when institutions use the donor’s appraised value—because those gifts may not contribute to the cashflow. This new standard, like the philanthropic research grant change, should help institutions better align their goals with their cash-flow needs.

Why institutions should embrace the changes

GG+A has long believed that campaigns work best when institutions use them to align their priorities and ambitions around a vision. Doing so keeps an institution’s primary focus on the impact of its fundraising rather than the campaign’s dollar goal. That’s important because we’ve seen many institutions hit their campaign dollar goals only to be frustrated when they realize they fell short of realizing their vision because they lacked the necessary cashflow due to counting policies that created significant gaps between cash and commitment.

Credibility issues emerge when institutions lack the cashflow they need to achieve their campaign objectives at the end of what appears to be a successful fundraising campaign. For example, faculty may read headlines about the campaign’s large fundraising total and then grow frustrated and distrustful of development programs when they don’t see how those dollars will positively impact the areas that development was fundraising on behalf of. Similarly, donors and volunteers often become discouraged when the institution fails to realize its vision. Each of those groups may come to the perspective that the development office is more focused on accounting gimmicks aimed at reaching a specific dollar goal than it is on producing a lasting impact. There’s a cost to that credibility loss as faculty, donors, and volunteers are critical to our institutions’ long-term success.

We hope that the new standards drive institutions to increase their focus on cashflow to ensure that they achieve their vision. For perspective, high-performing institutions have a high correlation between gifts and cashflow, with cash accounting for 80% to 85% of total fundraising commitments. By hitting those marks, those institutions can ensure that they will be able to realize the vision they presented their donors.

Impact—rather than total dollars raised—is what motivates and drives the broader community to embrace a campaign. We know many institutions that already take that approach, including some of our high-performing clients that stop talking about their dollar goal when they get close to hitting it; instead, they home in on the priorities that they still don’t have support for.

By embracing these changes and focusing on impact rather dollars, institutions can better position themselves for long-term success.

 

If you would like to discuss the CASE Global Reporting Standards or your institution’s comprehensive campaign strategy, please contact Suzanne Hilser-Wiles at shilser-wiles@grenzglier.com or Pete Lasher at plasher@grenzglier.com.

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About the authors

Suzanne Hilser-Wiles

President

Suzanne Hilser-Wiles, President, partners with GG+A clients around the globe to help them elevate their fundraising by offering more than 25 years of experience in advancement, program building, and campaign planning and implementation. Throughout her career, she has helped design, rebuild, and reimagine programs by applying her experience with a…

Full Biography View More Posts

Pete Lasher

Senior Vice President

Pete Lasher, Senior Vice President and Higher Education Practice Leader, brings more than 30 years of successful fundraising experience, including leadership of five separate billion-dollar capital campaigns at private and public institutions in the US. As GG+A’s higher education practice senior leader, he currently advises universities in North America and…

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