Nonprofit Professionals, Beware of Fundraising Euphoria

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Major gift euphoria is setting in.

Higher education has experienced a persistent and significant growth of major gifts over the past several years. The Chronicle of Higher Education recently released an updated report of private gifts to institutions of higher education and the numbers are certainly impressive.

Among all professions, there is an understandable desire to succeed with minimum effort. The nonprofit sector is not exempt from this human tendency, meaning that development professionals working in higher education may be tempted to put blinders on and bank on the good times continuing indefinitely. But as the great economist Hyman Minsky once said, “stability is destabilizing.”

Currently, educational institutions are buying on the margin. They are borrowing to invest in programs, infrastructure, and people. That’s how “boom” economics work. Speculation on continued growth permits adventurous spending and investments at present.

Development professionals need to wake up. Despite some positive figures, many economists are forecasting a market correction – which essentially means that we all need to get ready for a period of instability. Organizations should prepare for this by protecting their present position and moderating future expectations. This will mitigate the economic pressure on the horizon, perhaps shortening the duration of the inevitable financial squeeze.

If institutions of higher education ignore the warning signs, the pain, however, may endure – hamstringing schools in the pursuit of their important missions.

Lynette Zimmerman
is the president and CEO of Key Elements Group LLC and is an editor for Impact Tap. A development specialist with extensive experience helping blue chip arts, education, and human rights nonprofits along the East Coast, Zimmerman also writes on the nonprofit sector and hosts The Impact Lab, a podcast designed for nonprofit and social enterprise professionals. Connect with her on LinkedIn and Twitter.

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