The Decentralization of Development:Impact on Power, Priorities, Faculty Perceptions.
by Margarete Rooney Hall - 1992
Examines decentralization of the development function in research universities and the impact decentralization has on the balance of power among university academic leaders; the ability of universities to set their own priorities; the communication between academic units and the central development office; and the relationship between faculty and development officers. (Source: ERIC)
Philanthropy is the process of giving and development is the process of getting. Despite the confusing usage of the words by various authors, they are not synonymous.1
Philanthropy and education intersect in the development office because it has the delegated authority from the president and the trustees to manage the relationship between donors and the institution. This article is about the decentralization of the development function in research universities and the impact decentralization has on the balance of power among the universitys academic leaders, on the ability of the university to set its own priorities, on the communication between academic units and the central development office, and on the relationship between the faculty and the development officers.
Increasingly, research universities are decentralizing their development structure and function. Although fewer than 6 percent of liberal arts colleges and comprehensive universities have development officers at the academic unit level, I found in a study completed in 1989 that 61 percent of research universities had an academic unit development officer (AUDO) for either their business or engineering school, or for both schools. Another 13 percent of the universities planned to establish an academic unit development office within the following two years. The academic unit development offices in 47 percent of the universities surveyed had been established within the previous four years.2
Not all academic units are likely to show this same pattern. Medical schools and law schools, which sometimes are so remote from the undergraduate programs of the university that they are located on a separate campus, have been more likely to have AUDOs than have other components. Schools of arts and sciences and other academic units that form the nucleus of the undergraduate core curriculum have been less likely to have AUDOs. But decentralization is increasing and its effects are university-wide because AUDOs are hired in addition to, and sometimes in competition with, the central university development officers (CUDOs), who raise money for core programs and for programs at academic units without AUDOs.
My scholarly interest in the impact of decentralization is a product of my own professional career. After spending five years as a central university development officer at the University of Maryland, I became an academic unit development officer, the director of development for the business school of the same university, and spent almost five years in that position.
The business school was the first academic unit at Marylands flagship College Park Campus to have an AUDO, but within a few years, others followed. More and more often at professional conferences, I met other AUDOs. Initially our particular concerns were not addressed on the formal agenda, which seemed to be based on the assumption that all development officers were part of the vice-president for developments staff. We had to organize informal sessions to share our experiences and lessons learned. Within a few years, the Council for the Advancement and Support of Education added formal sessions at their periodic conferences for the benefit of those development officers involved in academic unit development. Special conferences, both for development professionals and for deans, were initiated because of the growing interest in issues related to the decentralization of development.
Information about decentralization of development on which to base such conferences was scarce, inviting a research project like mine, which compared centralized and decentralized systems for managing development activities at research universities. To the data I gathered for that study I add, for this article, anecdotes from my own twelve years of development experience at a liberal arts college and a comprehensive university, as well as at the University of Maryland. My goal here is to provide an overview, which is both documented by data from many practitioners and enriched with details from a few examples, of the impact of decentralization on selected management concerns.
DEGREES OF DECENTRALIZATION
Although universities vary greatly in the way they structure supervisory and budgetary responsibility for development, in my study I defined three levels of decentralization and will use them here.3
In a centralized system, all of the development officers are staff to the vice-president for development. They are supervised in the central development office and paid by the central development office budget. Development officers work not for any academic unit, but rather on university-wide priorities, which include the academic units.
In a decentralized system, at least some of the academic units have development officers whose primary responsibility is to raise money for the academic unit. All of the AUDOs are supervised exclusively by their deans and paid exclusively through the academic unit budgets. The university also has a vice-president for development and central development staff who work on university-wide priorities.
Many hybrid systems exist. I include as a hybrid any system that fits neither the description of a centralized system nor the description of a decentralized system. Generally, in a hybrid system the development officers have a dual reporting relationship with both the dean and the vice-president for development. They often receive line supervision from the central development office and programmatic supervision from the dean. The cost of operating the academic unit development office is often jointly budgeted by the academic unit and the central development office.
DECENTRALIZATION, THE ANNUAL FUND, AND MAJOR GIFT FUND RAISING
Most of the private money raised by universities each year comes from a few major donors, not from rank-and-file alumni gifts, and most of it is designated for specific purposes, Only a small proportion of private support comes in unrestricted, smaller gifts from many donors. These smaller, unrestricted gifts usually result from the annual fund solicitation.
When a university decentralizes its annual fund, it shifts the decision about the use of these limited, flexible resources from the president to the deans. Decentralization changes the point of impact of annual fund gifts from university-wide goals to parochial ones. This shift may be advantageous to the university if, as some deans and marketing experts argue, the academic unit goals are more important to the donors and therefore result in increased overall giving.
The impact of decentralization on major gift fund raising is even more important than its impact on the annual fund because major gifts account for such a high percentage of total giving to universities. According to K. S. Kelly, in 1987-1988 unrestricted gifts accounted for only 27 percent of all private support to private colleges and universities and only slightly more than 10 percent of all private support to public institutions. In 1986-1987, the percentages were even lower. Kelly says that current fund-raising formulas predict that less than 1% of the gifts to a campaign will account for one third of the total and that current giving statistics demonstrate that approximately 80% of all current gift dollars to American colleges and universities are restricted. She gives the example of the University of Miami, which raised $483 million from 61,000 donors. Of that amount, $239 million came from 76 donors (.1 percent).4
The process of attracting and obtaining major gifts usually is prolonged and intensive. Decentralization makes the AUDO and the dean, rather than the CUDO and the president, the key players in the cultivation and negotiation process that leads to the major gift.
DECENTRALIZATION AND THE BALANCE OF POWER
According to H. Mintzberg, power is based on control of a resource, on control of a technical skill, on control of an important body of knowledge, on legal prerogatives, or on access to people who can provide the others.5 Decentralization of development shifts the point of control of some resources, knowledge bases, and technical skills from the presidents staff to the deans and provides the dean with access to affluent and influential advocates. In so doing, decentralization can shift the balance of power in the university.
An academic unit development officer provides the dean with a body of knowledge about how to attract philanthropic support and the skill with which to implement the knowledge. A dean with full-time staffing for development is likely to be more methodical in implementing effective development procedures and will raise more money. The contributed resources usually are an addition to the academic units base budget. They are controlled by the dean outside of the system that allocates resources among the deans. These resources provide the dean with an ability to make decisions independent of the standard university process for setting funding priorities.
An AUDO also provides staffing for a board of advisors or some similarly named group of high-level volunteers. Board members often become donors. In addition they become advocates, advancing the interests of the academic unit with other influential individuals, and with leaders of powerful corporations, foundations, and organizations. This wider circle of friends provides the academic unit with even more contributions and with political power that enhances the deans ability to win resources allocated from nonphilanthropic sources.
A theory of social exchange described and expanded by Blau provides that social relations strive for balance.6 Thus an unreciprocated contribution or an exchange that is not evenly matched creates an imbalance that will result in an adjustment. The additional resources provided by the establishment of an academic unit development office alter the balance of social exchange that is the currency of power.
An academic unit with more philanthropic resources will be able to contribute more scholarly research, more quality teaching, more prestige to the university, than an academic unit with fewer resources. The imbalance and its expectable future adjustment bring power to the school and its dean.
During my 1989 study I interviewed academic officers and development officers at public research universities with centralized, decentralized, and hybrid development systems.7 The president of an institution with a decentralized development program told me he was convinced that having development officers at the academic units changed the balance of power among the deans. Those with AUDOs raised more money and were envied by other deans. The deans with AUDOs tended to be more risk-taking and entrepreneurial, probably because they had some access to resources outside the universitys base system of resource allocation. Having an AUDO created a feeling of independence. It also gave the dean a sense of having an additional tool in the arsenal when negotiating with the president. The president said that some fellow presidents believe AUDOs provide deans with too much power.
The deans at this decentralized university agreed that having an effective development operation enhanced their power. They credited these changes to the fact that having an AUDO increased their interaction with influential community members. The outside supporters built a consensus in the community that the school should receive support, making it easier to attract private contributions and politically more difficult for the university to decrease the schools budget allocations.
My 1989 study surveyed the 204 chief university development officers and the 108 chief academic unit development officers in the business and engineering schools of all 213 research and doctorate-granting universities. I received usable responses from 202 (65 percent) of the development officers, representing 156 (76 percent) of the institutions. According to 73 percent of the respondents, the amount of private support for an academic unit increases the deans power among other deans. According to 75 percent of the respondents, the level of private support increases the deans power with the president.8
DECENTRALIZATION AND SHIFTS IN ACADEMIC PRIORITIES
Over the years, donors have through their contributions influenced universities to change policies and shift priorities. For example, major national foundations have specifically designed funding projects to produce changes in colleges and universities. The General Education Board, financed by John D. Rockefeller, responded to a 1910 report produced by Abraham Flexner9 on the deplorable condition of American medical schools by establishing a grant-making program intended to improve their condition. The report recommended the closing of all but 31 of the 155 extant medical schools. The board spent millions to improve a few schools, including Johns Hopkins, Yale, Washington University, the University of Chicago, and Vanderbilt, but required specific changes at the schools, including the agreement that faculty would work full-time at the university and would relinquish their private practices.10
Wealthy individuals who became major donors to an institution also influenced policies and affected personnel and curriculum decisions. The Ross case at Stanford is a renowned example. On November 13, 1900, many American newspapers reported that Edward Ross had been asked to resign from the Stanford-university faculty by President David Starr Jordan at the insistence of sole trustee and founding donor Jane Lathrop Stanford. Ross was fired because he was an outspoken opponent of the use of immigrant labor to build American railroads and an equally outspoken proponent of municipal control of public utilities. Mrs. Stanfords late husband had accumulated his wealth in the railroad business and her company, the Southern Pacific, owned a number of street car companies.11
Managers of corporate giving programs have noted university willingness to adjust curricula to meet presumed or stated corporate funding priorities. IBMS director of university relations, T. R. Horton, wrote:
In recent years some educational institutions, in their eagerness to be seen as deserving of corporate support, have created programs to lit the mold of what they think companies would most like to support-chairs of free enterprise, for example. . . . they represent something not likely to be at the top of the colleges funding needs. . . . The business firms representative should want his or her companys investment in a college to be central to the institutions purpose, not peripheral to it.12
Kelly provides a rich descriptive and analytical view of the relationship between philanthropy and institutional autonomy. She describes tension created by the desire of a major donor to shape the university according to his or her idea of what a university should be and do, and the desire of the university leadership to shape the university according its own ideas and ideals. As Kelly points out, tension is the logical and inevitable outcome of the struggle between accountability, which assures that the university will provide the services society wants and needs, and autonomy, which assures that the university will remain an independent voice in society.13
When an academic unit has its own development office, the decision concerning the willingness of the university to accept the donors restrictions on the gift can shift from the university level to the academic unit level. Although the university will still have final approval, the dean becomes the first negotiator for the university and assumes more responsibility and authority for attracting gifts that meet university needs and lit university priorities.
My interviews with deans highlighted the sensitivity of this issue. One dean said he believed that he and his development officer could be more successful than the president and vice-president for development at convincing a potential donor to relinquish an unacceptable restriction on a gift. The dean believed that donors usually had an area of overlapping interest with the college but less often had a sophisticated understanding of how to achieve the mutually desired outcome. For example, a donor had wanted this deans college to offer a degree in free enterprise. Lengthy conversations and informal negotiations between the dean and the potential donor resulted in the establishment of an entrepreneurship program. The new program did not lead to a separate degree but enabled students in several majors to have intensive and extensive academic and internship experience in small business management.
The dean had the impression from conversations with the university-level development officers that they saw little difference between the initial donor offer and the eventual gift designation. They probably would have encouraged the donors interest in free enterprise and made the deans later negotiations difficult or even impossible. The dean, however, was convinced that a program in free enterprise was academically unacceptable.
A dean at a different university talked at length about a gift that was accepted by the central university development officers with a designation for the deans college. The college did not offer the particular program specified by the donor and had to initiate it as a result of the gift. The dean recognized the importance and timeliness of having the program but did not believe that adequate resources were available to fully implement it. The gift resulted in a shift of resources away from programs currently in place and having a higher priority in the deans judgment.
A third dean provided an example of shifting priorities in which a university and a donor recognized each others expertise and role. The academic unit was widely recognized by students, employers, and external ranking groups for its academic quality, but wanted additional resources to upgrade facilities and equipment. Area employers, led by a powerful and wealthy individual who served on the academic units board of advisors, wanted the academic unit to offer specialized education in an area in which the academic unit had little expertise. A major gift was designed to provide resources in the specialty area. Recognizing the strain this new priority placed on the colleges resources, the donors actively lobbied to increase public appropriations to the college for general support of programs already in place.
When a dean has his or her own development officer, the first line of responsibility for maintaining university autonomy rests with the dean. My interviews indicated that deans are fully comfortable with this responsibility. Having it explains in part the increase in power observed by the survey respondents. Almost half of the institutions represented by my surveys respondents had experienced a significant shift in priorities due to a major gift. In most cases (67 percent) the gift process was jointly managed by the dean and the president. In virtually all cases, the priority change was readily accepted by both.
DECENTRALIZATION AND THE RELATIONSHIP BETWEEN FACULTY AND DEVELOPMENT OFFICERS
Leon Trachtman had recently retired from his position as dean of Purdue Universitys School of Humanities, Social Science, and Education when he wrote in CASE Currents that faculty members think of the advancement officer vaguelyif at allas a salesperson and petitioner who haunts corporate and foundation board rooms and is likely, in Emily Dickinsons sly language, to tell all the truth, but tell it with a slant.14
During my study, a dean at a university with a centralized system told me that their development officers believed the faculty members were too isolated from the reality of the for-profit world to deal effectively with donors, and, conversely, faculty members believed the development officers were too academically unsophisticated to deal with the facultys professional friends outside the university. This animosity between faculty and development officers is not unusual at universities, although often it is expressed forcefully only under cover of anonymity, such as was assured in my case studies.
Faculty consider the development function to be outside the mainstream of university activities. We (development officers) are accepted at the academic conference table largely out of a pressing need for us rather than out of an appreciation for what we are and what we do as professionals.15 Although the number of position announcements and the level of positions advertised in the Chronicle of Higher Education attest to the value universities attach to expertise in development, the development function has received little attention in scholarly research or at meetings of higher education scholars. At the 1990 meeting of the Association for the Study of Higher Education, only four of the fifty-four sessions had any connection to the development function, and almost none of the scholars attended those four.
In addition, few senior development officers have doctoral degrees. Announcements seldom request that applicants for high-level development positions have the academic credentials required for all entry-level faculty positions. Yet development professionals often receive salaries higher than all but the most accomplished faculty. Development officers also acquire influence and access to policymakers that faculty may perceive as out of proportion to their ability to contribute to the core of the academy. Nevertheless, there is an almost universal, intuitive understanding that it would be better for the university if development officers and faculty worked cooperatively.
Decentralization of the development function brings faculty and development officers into better working relationships. My survey asked respondents to rate the relationship between faculty and CUDOs as cooperative, neutral, or uncooperative. Only 42 percent rated it cooperative. However, 76 percent said the relationship between the faculty and AUDOs was cooperative. The study interviews and experiences from my own years as a development officer shed some light on how and why decentralization improves cooperation between faculty and development officers. Decentralization makes it easier to establish a development strategy that recognizes and utilizes the strengths of each group.
One dean complained to me that central development officers had the proposal writing process exactly backward. In this university, the development officers sketched out a conceptual proposal and asked the faculty members to flesh it out. The dean believed that the faculty should provide the conceptual framework for proposals and the development officers should fill in he submission with information about the universitys strengths outside of the academic unit. Then the development officers should identify appropriate potential donors and carry the faculty ideas forward.
As a counterpoint, at meetings of development officers I have often heard complaints that faculty members place a low priority on helping to prepare proposals. Even when a development officer has identified a hot prospect and outlined a proposal the prospective donor is likely to find attractive, faculty members are slow to provide the details needed to complete the proposal. Faculty, according to development officers, tend to be interested in obtaining funding primarily for status-quo activities. They have little appreciation for the degree to which donors and grantmakers have preestablished agendas that will not bend to accommodate the needs of ongoing programs, regardless of their intrinsic importance or the quality of the presentation.
In contrast to these somewhat hostile views across the faculty/development line, deans at a university with decentralized development told me that decentralization encouraged and enabled their own and the facultys involvement in development by proposing achievable goals and appropriate tasks. The faculty became involved in the identification and cultivation of potential donors and no longer thought of development as primarily a solicitation process.
Having full-time staffing at the academic unit helps the dean and the faculty recognize the fund-raising potential in their non-fund raising activities. Fund raising becomes integrated as a secondary goal in faculty activities that primarily have academic or professional advancement purposes. Two examples from my personal experience illustrate this point.
The University of Maryland College of Business and Management offered a graduate seminar on theories of organizational leadership. Students reviewed and analyzed the literature on this topic and participated in case studies designed to demonstrate appropriate implementation of the theories. In an informal conversation about the course and its methodology, the professor mentioned that it might be useful and interesting to have business executives discuss their own leadership practices with the graduate students. As the AUDO, I volunteered to identify and recruit willing participants from among potential and current donors to the college and to be responsible for the logistical arrangements. The professor accepted responsibility for communicating his academic goals to the executives and specifying how their presentations would enhance the learning experience. I attended the class room presentations. Sometimes we took the executive to lunch on campus after the presentation. Students from the class joined some of these sessions. Our development goal was to increase the executives understanding of the quality of the business school, its goals, and the ways in which private support could make it even better.
A similar convergence of academic and development goals occurred when faculty members established the MBA Case Competition as part of the capstone strategic-management course. The academic goal was to help students integrate their previous course material and apply it to a strategic-management problem in a relatively realistic situation requiring cooperation with colleagues, effective written and oral presentations, and adherence to a tight schedule. The development goals were to involve the executives in the real work of the college, increase their understanding of its quality, and make them more receptive to future requests for personal or corporate contributions. The three-day event required that about 20 executives on 4-person teams judge the presentations of about 300 students on 5-person teams. As the development officer, I identified and recruited the executives. The faculty members organized the academic exercise. Both the academic and development goals were advanced by the cooperation.
Such cooperative activities begin with frequent interaction and conversation. Ideas for joint projects grow out of lunchroom discussions and hallway meetings. Failure of centralized development systems to engender such cooperation is, at least in part, the result of the isolation of central development officers and faculty from one another.
The development process requires that the academic leaders create and articulate a vision for the future of the college. Then, prospective donors must be identified, involved, and asked to invest in that vision. When development officers and faculty regularly meet both formally and informally to discuss their work, the development officers help faculty leaders to articulate their goals for the colleges future and the faculty help the development officers to involve the potential donors in the meaningful work of the college. This level of interaction occurs more often and more easily where development is decentralized.
Decentralization also helps dispel some of the stereotypes development officers and faculty have about each other. When development officers and faculty members work in closer proximity to each other they come to understand each others jobs better. It becomes clear to both sides that each group is evaluated primarily on a single criterion. For the faculty member, that criterion is the number of publications in peer-reviewed journals. For the development officer, that criterion is amount of money raised. Other contributions to university life will not substitute in either case. Therefore, each must steward her or his time well and meet the primary goal before working on others that have equal long-term value but are not as directly rewarded. When they work closely together in the same academic unit, this similarity becomes clearer and tends to promote understanding whereas the need to be intensely goal-oriented can otherwise promote the snake oil salesman stereotype of the development officer and the nerd image of the faculty.
The central development officer is at a considerable disadvantage in trying to establish an effective working relationship with faculty because of the size and diversity of institutions. Each academic units faculty has technical language and group characteristics different from those of the others. The AUDO has to become expert in only one. The central development officer, to be equally effective, would need to assimilate each of these jargons and social environments, moving among faculty engineers, poets, architects, and coaches with equal levels of understanding and ease. Therefore, the central development officer almost always remains an outsider. It is much more difficult to design and implement cooperative endeavors from outside the group than from within it.
COMMUNICATION BETWEEN THE ACADEMIC UNIT AND THE CENTRAL DEVELOPMENT OFFICE
Information is a resource. According to Mintzberg, control of a resource is one of the five sources of power.16 Since both resources and power enhance ability to achieve goals, it is understandable that resources are seldom expended without hope of benefit.
Both academic officers and development officers in my case studies said they believed that information sharing between the central development office and the academic units improved fund-raising success. However, few in either group were satisfied with the information sharing at their universities. Dissatisfaction was strongest at the university with the most centralized development system. One dean told me that in his opinion the problem was that centralized, to a large degree, meant secret. The deans never knew the basis for the central development offices decisions. It is centralized and secret and thats what troubles me.
Interviews at the university with the most decentralized development system gave the impression that information about potential donors and about development activities sometimes was hoarded. The president said that although he believed in decentralizing management in order to increase the involvement of deans and their accountability for results, he needed a better protocol for keeping himself informed of who was talking to whom and who was likely to be more successful in getting support from a specific individual or organization. He dreaded the possibility of meeting a prospective donor at an event and being unaware of an important recent contact with one of the universitys academic units.
The chief central development officer at the most decentralized university pointed out that in a system where the AUDOs are responsible directly and solely to the deans, rewards for sharing information are not as great as rewards for keeping information. He believed that resistence to information sharing was built into the decentralized system. When development officers met to discuss the identification and cultivation of the interests of prospective donors, each would try to give less information than she or he got. As this vice-president saw it, each development officer tried to stockpile data about donor interests.
The deans also criticized communication in the decentralized system. They said that information about activities with potential donors flowed more from their offices to the central development office than vice versa. One dean said that he and his development officer spent hours completing reports on donors they visited and never got any feedback on their own activities, the activities of other deans, or those undertaken directly by the central office.
Academic officers and development officers have the fewest criticisms of internal communication in development systems that require development officers to report jointly to the vice-president for development and a dean. The case study interviews indicated that development officers in such hybrid systems carried information between the central development office and the academic unit. Since they were directly affiliated with both offices and had access to information in both, they became pipelines for sharing the resource rather than resource gatherers for either.
Survey results confirmed most of the interview data on flow of communication. I asked CUDOs to rate the communication they received from the academic units about development activities as inadequate, neutral, or adequate. Twice as many CUDOs rated communications adequate in hybrid systems as in either centralized or decentralized systems.
I asked the AUDOs to rate the communication they sent from the academic units to the central office in the same way. Half of the AUDOs in decentralized universities and 54 percent of the AUDOs in hybrid universities rated it adequate.
Thus, not more than half of the development officers in fully centralized or in fully decentralized universities found upward communication adequate, but more than two-thirds of the CUDOs and-more than half of the AUDOs in universities where AUDOs reported jointly to the dean and the vice-president found it adequate.
Similarly, I asked the development officers to rate downward communication, from the central development office to the academic units. Only 45 percent of the CUDOs in universities with centralized development systems rated it adequate, but 65 percent of CUDOs in decentralized and 71 percent of CUDOs in hybrid universities gave it that rating. Fewer than one-third of AUDOs rated downward communication adequate. Although the interviews indicated that hybrid systems have communication advantages for everyone, the survey data indicated that many at the academic-unit level believed downward communication was inadequate in all systems.
THE IMPACT OF DECENTRALIZATION
Prospective donors, like all other potential and actual sources of university revenue, are a resource. The president is charged with stewarding all resources for the optimum benefit of the university.
Through the vice-presidents and other key administrative officers, the president manages the resources generated by academic affairs, financial and business affairs, and student life. The development function requires and deserves an equivalent degree of presidential involvement and oversight. By decentralizing development, the president shifts at least some of the control and oversight of the resource represented by prospective donors from the vice-presidential level to the academic-unit level. This shift usually substitutes coordination of the potential donor pool for control of it.
The president relinquishes some control by decentralizing. A successful program of attracting private support requires that prospective donors become actual donors. Control of the prospective donor pool will not increase the amount of private support. Only a change in the behavior of the prospective donors will bring the desired result. When more high-level academic leaders become seriously and effectively involved in the development program, more potential major donors can be included in the universitys efforts to increase private support. The relationship the universitys academic leaders build with prospective donors is the key to actualizing their potential.
Decentralization increases the involvement of the deans and the faculty in development. It provides more people for managing relationships with many more potential donors. However, deans and faculty need effective staffing for their development work. Development is only one of their many responsibilities and it is seldom the one for which they have been prepared by their previous experience and success. Therefore, they need a senior development professional to guide the development program, assure that their time is well spent, and provide an executive level of program management and leadership.
Decentralization substitutes coordination for control and produces a broader base of high-level academic involvement in development. Having more academic leaders actively participating in development improves the universitys ability to manage a major gift program and thereby enhances the universitys ability to obtain private support.