Leadership and higher education fundraising: Perspectives from Malaysia

Introduction

Money obtained from such sources as philanthropic donations or alumni contributions has become key to universities and colleges achieving their missions, it being a rare higher education system to which some sort of financial squeeze is not being applied (Universities UK, 2014). This is certainly true of Malaysia, which has, in recent years, experienced various pressures, including sizeable cuts to higher education budgets (Rohayati et al., 2016). Financed, since their foundation (which has, in most cases, been within the last 50 years) almost exclusively by government grants, public universities are being pushed towards greater levels of autonomy that include the identification and exploitation of more diversified funding sources (Ghasemy et al., 2018). The private sector, too, is in an increasingly competitive environment that is only intensifying the need for continuous investment and the money that supports it (Rohayati et al., 2016).

The research reported here explored these issues, asking one simple question: what is the role of leadership in higher education fundraising? Six Malaysian universities (two public sector and four private) were looked at, with leaders (usually vice chancellors or equivalent) and other staff with a fundraising brief being interviewed about their experiences.

All of the research site institutions organise their fundraising according to the ‘classic’ structure, as described by, for example, Ryan and Palmer (2005). The principal (in this research, either vice chancellor or CEO) is in overall charge of a team that may consist of administrators devoting differing amounts of their time to the job, or academics for whom it is a sideline to their main role. Ryan and Palmer (2005) state that the principal is there to coordinate the fundraising effort; as was discovered, that is to underestimate the breadth of the involvement that he or she needs to take.

Fundraising leadership of any variety has, until recently, been notably lacking in most Malaysian higher education institutions (Hock-Eam et al., 2016). Apathy is a major factor in the deficit, but, perhaps more seriously, the fundraising imperative is forcing those in charge to face novel difficulties that are not always within the ‘comfort zones’ of academics. It might be thought that much of the problem springs from resistance to what Saltman (2010) describes as the ‘corporatisation’ of education, but this research failed to confirm that: the higher education professionals who took part generally accepted the necessity for fundraising, despite not always being adept at carrying it out. Admittedly, those consulted were themselves fundraisers, but that only heightened their awareness of how the move towards public-sector autonomy has not come without attached strings (Ahmad et al., 2013), budget allocations depending upon the extent to which Key Performance Indicators, or ‘KPIs’, are met (Ahmad and Farley, 2014). In private institutions, KPIs are a function of the market: no students equals no income.

In seeking whatever leadership is present, or should be present, the above described team structure indicates that a level of distributed leadership (Spillane, 2006) is likely, if not obligatory – the research led to some interesting revelations on that point – but what also came through is the sense that different actors need to adopt a range of styles if they are to maximise pecuniary returns. As Powell and Rey (2015) contend, higher education institutions are ‘resource-dependent’ entities; that is to say, they are intimately linked to the social, economic and political ecosystems within which they operate, which is not only making fundraising an increasingly urgent task, but a difficult one to accomplish.

Both transactional and transformational leadership styles (Sayadi, 2016) were found to be central, but not in obvious ways. Of particular salience were those aspects of the two that concentrate on selling (Bass, 1997), whether the thing sold be a vision or a physical commodity. More intriguing still was the question of who are the ‘followers’ in fundraising – which is by no means susceptible of a simple answer. Organisational members come into the equation, for certain, but so, too, do other, cross-boundary, constituencies (Noble and Jones, 2006).

While this article considers how leadership facilitates fundraising, it must be stressed that it is not a critique of philanthropy per se. Time and again participants in the research insisted that monies raised from donations are not a useful way to cover everyday running costs. In this respect, fundraising is only one solution to government budget cuts or falling student rolls: fundraising complements other sources of finance but is not a substitute for them.

Fundraising and higher education

Rohayati et al. (2016) define philanthropy as the giving of money or some other resource to ensure that a particular purpose is fulfilled. It can be a one-off event, but is often an ongoing relationship that may result in lengthy intervals between a first approach to a potential donor and the signing of a cheque, meaning that money pledged today will have little or no impact for, perhaps, years to come (Fosgaard and Soetevent, 2018). This is especially true if, as is quite common, payments are made in instalments.

What motivates people to make such donations (Bekkers and Wiepking, 2007) includes the inherent feelings of joy engendered by the activity itself (the so-called ‘warm glow effect’), values-alignment, altruism and reputational enhancement (Harbaugh, 1998). A reason for alumni to donate (generally, relatively small sums) to their alma maters is a strong sense of emotional attachment to the institution, usually backed by memories of a positive student experience (Wastyn, 2009). This would tend to support Hodson’s (2010) claim that the relationship in fundraising is between donor and organisation, rather than donor and any individual within the organisation.

The literature is less certain of how far that can be said of the ‘big-ticket’ and ‘high-net-worth’ individuals that universities seek as contributors to large-scale projects (Universities UK, 2014). In these instances, interpersonal contacts are granted more prominence (Gallo, 2012). A study by Edwards and List (2013) concluded that a ‘personalised ask’ to prospective donors, including a suggested amount, raises more revenue overall than less targeted activity (the launching of an appeal, say).

Given the reasons why people donate, it is a matter of conjecture as to why proactive fundraising is necessary; it might be thought that an activity which produces happy feelings in its participants would be willingly indulged in. Because, mostly, it is not, relationship management is an indispensable part of the fundraising process (Waters, 2008). Indeed, an ability to initiate, sustain and deepen interpersonal relationships is arguably the most important single attribute of the successful fundraiser (Bryant et al., 2003).

Fundraising and leadership

As far as fundraising is concerned, an opening speculation might be whether it is a led or managed enterprise. Among organisational management’s main concerns is the procurement, distribution and use of resources, including monetary resources (Levacic, 2010). Such activities are certainly elements of fundraising, but ‘procurement’ is a shallow word for much of what was described in the previous section. In its most essential form, fundraising is less the procurement of money and more the exertion of influence – and influence lies at the heart of leadership (Rost, 1993). Defining ‘influence’, in this context, as the motivation of followers by convincing them to accept a vision of an alternate reality and offering them what they believe to be the route to its realisation makes ‘vision’ another sine qua non of leadership (Ndalamba et al., 2018).

Clearly, in fundraising, the vision is of improved educational provision, but to whom is it being sold and by whom? The latter is, primarily, fundraising teams. As has already been intimated, distributed leadership (Harris, 2010) informs fundraising efforts, although the literature is somewhat muddled about it as a concept. Lumby (2013) notes that its effectiveness has not been conclusively proven and Parker (2015) reminds her readers that, as a term, it is both imprecise and heavily disputed. It is also a model of leadership – a means of channelling leadership – and not leadership itself (Bush, 2003). Fundraising illustrates the problems, in that the team provides much of the drive and energy, but its empowerment is still bounded (Hairon and Goh, 2015) in that it ultimately gives way to a single, visionary, ‘project champion’ (Noble and Jones, 2006) in the form of the principal.

In light of this, and the interpersonal nature of fundraising as sketched earlier, it is perhaps less useful overall to concentrate on models than on leadership as an influence relationship between individuals. In this regard, the literature on transactional and transformational leadership (Oterkiil and Ertesvag, 2014) is more relevant. Transactional leadership is based on social exchanges: a leader gives a follower something that he or she wants in return for commitment. Returning to an earlier point, it is often seen as close kin to management (Sayadi, 2016). Transformational leadership, by contrast, prompts a follower to transcend their usual level of performance by inspiring personal investment in the success of an activity (Judge and Piccolo, 2004). The two are not mutually exclusive. A relationship between a leader and a follower may oscillate between the transactional and transformational (Adams et al., 2018). The two practices may also underpin a model such as distributed leadership.

If it is accepted that fundraising is to do with vision-sharing and relationship management, it might be expected that these two versions of leadership are present (albeit in yet-to-be-determined combinations), but that still leaves the question hanging of to whom they are applied.

Research methodology

By its nature, the leadership of fundraising in Malaysian higher education is largely invisible in quantitative data sources. Thus, it was logical to opt for a qualitative approach that would allow personal and organisational narratives to lie at the centre of the findings (Cohen et al., 2000).

The six case-study (Bassey, 1999) universities were drawn from all quadrants of the university sector. Semi-structured interviews were chosen as the data-gathering instrument in order to give participants the opportunity to share their experiences in an environment in which interesting anecdotes and digressions could be followed up and developed, adding to the detail of the data (Drever, 2003). The 12 participants interviewed were selected for their ability to contribute meaningfully to a study that aimed to explore an aspect of their leadership style. Six were principals; the other six were members of fundraising teams, usually in senior roles. The sample, then, was purposive (Etikan, 2016), but it should be noted that fundraising in Malaysia is at an early growth stage and not all universities approached were able to offer participants with much specialist knowledge or experience to draw upon.

To encourage openness, the interviews were face-to-face and held on the campuses or in the administration offices of the research site institutions. In length, they were all between 1 hour and 90 minutes. Once completed, they were transcribed and analysed thematically. Ideas from the literature that had informed the creation of the interview schedules were used as what were, in effect, codes applied to the transcripts. A grid was constructed into which key quotations were slotted, making for ease of comparison across the research sites.

Findings

Discussion

As an activity, fundraising is one – but only one – answer to the macroeconomic challenges facing Malaysian higher education institutions, both the literature (Universities UK, 2014) and the interview data being in no doubt that monies raised from philanthropy make little difference to operational budgets. They are, rather, ‘long-term’ finances that fuel leadership ‘vision’ (Bush, 2003).

In identifying how and to whom that vision is communicated, it is perhaps best to consider, first of all, fundraising teams, the main job of whom, according to the interviews, is to maintain contact with the extended ‘club’ of alumni, as well as taking forward ‘big-ticket’ deals. Harris (2010) has found that leadership distribution can be formal or informal, but the admixture present among team member participants (with only two out of the six – one from a public university, one from the private sector – being full-time professional fundraisers) brings out, for fundraising, a number of possibilities, not all of which differ greatly from delegation (Lumby, 2003). Although relationship management (Waters, 2008) was generally granted centrality in team members’ work, those for whom it was a formal responsibility – indeed, a KPI – claimed to meet their targets more regularly than those for whom it was not. Its being only an informal task was proffered by at least one participant as a reason for the often-referenced ineptitude among academics as far as fundraising is concerned (Ahmad et al., 2015).

For fundraising teams, the chief importance of relationships was that they were presented as a means of exercising influence over donors, which, somewhat counter-intuitively, cast donors in the role of followers. Some team members – such as the public university fundraiser who kept in touch with donors – followed a practice not wholly distinct from that of principals, but the vehicle for dealing with donors described by most participants was a form of transactional leadership (Oterkiil and Ertesvag, 2014). Through this, alumni are offered some minor reward – such as, at one of the researched public universities, attendance at a dinner – in return for a donation. With ‘big-ticket’ donors, the fundraising team is mainly charged with identifying prospects and ensuring their continued engagement (e.g. by keeping them informed of developments throughout the solicitation process), which, again, places them in the managerial space occupied by transactional leadership. This notwithstanding, it came through strongly that little can be achieved with ‘big-ticket’ donors unless there is significant input from the principal.

On the theme of his or her leadership role, the most important word to emerge from the interviews is ‘friend’. In that it usually describes an equal relationship between individuals, it is a strange one to use of fundraisers and donors – whose mutual connection Hodson (2010) believes to be relatively dispassionate, with the balance of power favouring the donor – but it would be a mistake to confuse solicitation with supplication (especially if donors are imaged as followers). A request for funding was foregrounded as the most important part of the process, but still only a part. In fact, in the fundraiser–donor relationships described by participants, the principal was placed in the position of ‘heroic’ focal point (Spillane, 2006). A need was seen for him or her to demonstrate transformational leadership (Sayadi, 2016) by sharing a vision intended to persuade those with money that the values underlying their donation decisions align – or could align – with the strategic priorities of a higher education institution (Najati and Amran, 2009). A ‘big-ticket’ donation has to be more than merely transactional because, as a private university CEO emphasised, the return to the donor is ‘essentially nothing’.

The research reported on here was carried out in Malaysia and refers specifically to how business is done in that country, but the literature insists that the situation is similar elsewhere (Edwards and List, 2013). In any case, for both principals and their team members, fundraising should, in and of itself, rightfully be considered a leadership endeavour.

Conclusions and recommendations

This project was limited in several respects. Its latitudinal nature allowed little chance for whatever difficulties the current funding regime in Malaysia might cause to fully emerge. The participants also offered few insights into structural issues. Analysis of a system that is moving from the categorisation of higher education as a public good to be provided by all, to a private benefit to be paid for by individuals, including – but not restricted to – its beneficiaries, was conspicuous by its absence.

The resource-dependent nature of a modern higher education institution (Froelich, 1999) makes of uncertainty a fact of life – as conditions in Malaysia amply demonstrate (Sirat, 2010) – obliging any leader with an eye on the long term to view his or her span of influence as encompassing both those under his or her direct control and a whole wider population, some of whom, it is hoped, will support projects with pecuniary contributions. A recommendation of this research would thus be that higher education principals intent upon growing philanthropic contributions should not think of donors as ‘benefactors’ or ‘contacts’, but reconceptualise them as followers, in the best sense of that word: beyond-boundary members of the organisation to be inspired with an ambitious vision and whose involvement needs careful nurturing over an indeterminate period of time.

Opinions differ as to how far transformational leadership is a rational choice or an aspect of personal charisma (Antonakis et al., 2011), but, either way, it should inform the ‘friendships’ that principals develop with donors and prospective donors. Malaysians are not unusual in being slow to part with their cash: it takes a special kind of motivator to accomplish it. Of the principals interviewed, those who understood this had a richer stock of fundraising success stories to draw upon than those who did not.

Distributed leadership (Harris, 2010) in fundraising was, on the whole, found to be most effective when formalised, suggesting a second recommendation: that continued professionalisation of the fundraising function will increase monetary returns. Certainly, insofar as fundraising teams have a largely transactional relationship with donors, the higher the degree of administrative acumen they display, the more likely they are to deliver positive results.

Of course, an objection might be that none of this is new – that higher education principals have always been, in part, ambassadors, providing a human face when the university or college in question has needed to be represented to the world at large. Unprecedented is the closeness between doing that and the bottom line. In Malaysia – and more widely – fundraising has become an inescapable reality for higher education institutions. An exploration of how it is, or should be, led is timely.