In the next installment of Behind the Numbers, we take a look at the Campaign for Carolina and how it can, and cannot, alleviate the University’s financial situation.
On Oct. 6, 2017, a crowd of students, faculty, staff, alumni and volunteers packed into a tent on Polk Place for the launch of “For All Kind: The Campaign for Carolina.” The largest fundraising effort ever by a North Carolina university, the $4.25 billion comprehensive fundraising campaign was also the second largest campaign among public institutions in the nation at the time of its launch.
Almost four years later, the campaign has raised more than $3.6 billion from more than 192,000 donors. In fiscal year 2020 alone — July 1, 2019-June 30, 2020 — donors contributed more than $565 million in cash and commitments to the University. But these funds are not a panacea for Carolina’s budget woes, and whether the University’s fundraising success will continue in the wake of the COVID-19 pandemic remains to be seen.
“It’s not the easiest environment,” Vice Chancellor for Development David Routh said. “There’s a lot of uncertainty at the donor level, the University level and at every level of our society and our nation. But we will continue to stay focused on our mission.”
More than 97% of the funds raised last year were given for a specific purpose — such as financial aid, endowed professorships or programs at specific schools. Legally and ethically, the University must respect donors’ wishes to use their gifts for their specified purposes, schools or departments. And while donors like to support the educational mission of the University, donors have shown little appetite for making gifts for operating expenses such as offsetting budget deficits or paying for deferred maintenance.
In addition, a portion of that $3.6 billion in commitments hasn’t come to the University yet. Instead, donors may commit to giving money over a number of years or upon their deaths.
While there are limitations on how the University can use most campaign gifts, campaign funds have been used to support several key initiatives during the pandemic, including COVID-19 testing programs, research, Carolina Away and the Carolina Student Impact Fund. In addition, since the start of the COVID-19 pandemic, the University has worked to solicit more unrestricted cash gifts from donors.
“Our deans, our Chancellor, everybody needs money that can be spent right this minute,” Routh said. “We are making sure we elevate conversations about current, expendable gifts in every donor conversation. We are focused on what the institution needs at this moment as well as in the future.”
Why do Universities have campaigns? How is this campaign different from others Carolina has done in the past?
At the most basic level, universities engage in campaigns to fund strategic priorities. Initially, the Campaign for Carolina was aligned with the Blueprint for Next strategic framework; today, it supports the goals of Carolina Next: Innovations for Public Good.
The campaign is built around three central pillars:
- The New Graduate: Students & the Educational Experience;
- 21st Century Professoriate: Faculty and Scholarship; and
- A Culture of Innovation: Innovation and Impact.
In addition to the campaign pillars, the University’s development teams are fundraising for multidisciplinary programs, or signature initiatives, that address issues and opportunities that allow development officers to leverage the University’s strengths and create impact across campus.The Campaign for Carolina asks: “What will it take to fulfill our potential so we can make the biggest difference in North Carolina, across the country and around the world?” And it aims to answer with a significant investment in Carolina’s core strengths and a renewed vigor in innovation, impact and entrepreneurship to remain responsive to the times and needs of our people.
The campaign differs in several ways from past campaigns — perhaps most notably its size. This campaign has a goal of raising $4.25 billion, more than any previous fundraising effort at Carolina. The Carolina First campaign wrapped up in 2007 and brought in $2.38 billion.
In addition to raising funds for students, faculty and innovation, the campaign has enabled the University to build a robust fundraising infrastructure that will enable the University to continue to achieve the fundraising success that it has achieved during this campaign. For example, the Campaign for Carolina led to the creation of a principal gifts team that works to secure seven-, eight- and nine-figure gifts for the University. This team, dedicated entirely to building relationships with individuals who have the affinity and capacity to make transformational gifts, did not exist in prior campaigns and has significantly impacted this campaign’s success and will certainly continue for years to come.
The University raised $565 million last year. Why can’t this be used to offset a budget deficit?
It’s first important to understand that the University does not have a bank account with $565 million just sitting there. Rather, this number refers to cash and commitments: money coming in, as well as money promised for the future. Often, when donors make large gifts, they give the funds to the University over the course of several years or bequeath the money to the University upon their deaths.
In addition, individual schools and units raise the majority of the money in the campaign, and those funds stay with the schools and units that raised it. Most of these funds are given for specific purposes, and often they are put in an endowment so that the gift will continue to benefit the University for generations to come. For example, a donor may endow a scholarship that will be awarded in perpetuity.
What are some tangible ways that the campaign has impacted campus?
The Campaign for Carolina is what is known as a “comprehensive campaign,” which means that the campaign impacts the University in myriad ways. A few examples:
- The Office of Scholarship and Student Aid has raised more than $192 million during the campaign to provide need-based scholarships and financial aid packages.
- As of March 2021, Carolina donors have committed more than $519 million in support of faculty through the campaign pillar 21st Century Professoriate: Faculty and Scholarship. In addition to this commitment, more than $500 million from the campaign pillar A Culture of Innovation: Innovation and Impact will go to faulty support.
- As of 2019, the Campaign for Carolina has led to the creation of 224 new graduate and professional scholarships and fellowships while “topping up” another 244 scholarships and fellowships that had not been able to keep pace with tuition increases.
- The Hussman School of Journalism and Media raised more than $10 million to fund a new building that will replace the Phillips Annex. The Curtis Media Center will open later this year and will be a state-of-the-art facility that will prepare students to enter the rapidly evolving media world.
- UNC Health’s campaign has driven cutting-edge research such as Lineberger Comprehensive Cancer Center’s cellular immunotherapy program.
- Kenan-Flagler Business School has raised more than $50 million towards a new building. Kenan-Flagler must raise a total of $75 million by June 30, 2022, to trigger another $75 million in state matching funding for the building. When completed, the building will allow the business school to expand its undergraduate business program by at least 50% and remain competitive in recruiting top MBA candidates.
What areas is the University currently focused on for fundraising?
First and foremost, Routh’s team is working hard to reach the $1 billion Carolina Edge student aid goal. That goal is important to Carolina because access, affordability and the ability to offer competitive financial aid packages are central to the University’s mission. University leaders estimate that the economic effects of COVID-19 will lead to an increase in demand for financial aid — by as much as $15 million for 2020-21. This is an 18% increase over the prior year. With more deserving students than ever demonstrating more need than ever, and with fewer public resources to support them, private philanthropy is ever more critical to meeting Carolina’s commitment.
While University fundraisers have made substantial progress, there is still work to be done for the other three signature initiatives: Convergent Science at Carolina, Arts Everywhere and A Global Mindset.
Beyond that, 27 of Carolina’s schools and units have campaign goals, and fundraising efforts continue in all those schools and units — even in those that have reached their initial campaign goals as new needs have continued to emerge during the campaign. For example, the School of Nursing is now fundraising for a building renovation to augment funding recently allocated by the state.
In addition, the University’s development team is focused on raising funds for diversity, equity and inclusion. This includes programs and initiatives such as the Build Our Community Together Fund, the Carolina Postdoctoral Program for Faculty Diversity Fellows, Project Uplift and the National Pan-Hellenic Council Garden Project, as well as centers and institutes such as the Carolina Latinx Collaborative, the Sonja Haynes Stone Center for Black Culture and History, the American Indian Center and the Asian American Center.
How much of the $3.6 billion raised is in the form of pledges, and how much has already been given?
Pledges are usually paid over a five-year period and are not immediately available. Planned gifts are realized over a longtime horizon.
If more than 97% of money raised is given for specific purposes, that still leaves a lot that isn’t earmarked. Why can’t that be used to offset pandemic losses? Or is it?
While some donors make “unrestricted” gifts that are not earmarked for a specific purpose by the donor, most of those “unrestricted” gifts have already been allocated for use as part of the University’s normal budgeting processes. In other words, using those funds to offset pandemic losses is possible but could result in a financial shortfall elsewhere in the University’s budget.