UNC-CH newspaper turns to fundraising

By Todd Cohen

CHAPEL HILL, N.C. — The Daily Tar Heel, the 123-year-old student newspaper at the University of North Carolina at Chapel Hill, is adding charitable fundraising to the nonprofit business model it launched in 1989.

Founded in 1893 as a publication of the school’s Athletic Association, the DTH for most of its history was supported by fees from students, who picked the editor in a campus-wide election.

But in 1993, a student referendum the newspaper sponsored ended the student fee and put the selection of the editor in the hands of an independent board created by the board of directors of a nonprofit created at the time to publish the newspaper.

Advertising sales had been generating enough revenue to cover operating costs, and the newspaper “wanted to give student fees back” for other campus organizations to use, while also removing “even the possible appearance of influence” from the university, says Kelly Wolff, general manager and director of the nonprofit, DTH Media Corp.

For the past five years, however, the nonprofit has posted an annual operating deficit ranging from $50,000 to over $100,000 on a budget of roughly $1 million, making up the difference from a reserve fund. And it now faces the need to replace outmoded newsroom technology, and provide scholarships and travel expenses for student staff, she says.

It has formed an alumni association to spearhead an annual fund campaign and host receptions throughout the U.S. And it is preparing for a capital campaign to raise about $300,000 or more.

“We are starting for the first time to ask our alumni to support the parts of our educational mission that are no longer being fully supported by our ad revenue,” Wolff says.

Operating in an office in downtown Chapel Hill — it moved off campus in 2010 — and with a professional staff of four people working full-time and two working part-time, the newspaper employs 80 students in news, advertising, customer service and production jobs. Another 150 students work as volunteers in training.

The student staff produces 14,000 copies of the newspaper five days a week when school is in session. The paper is distributed at 225 sites on and off campus, including Chapel Hill, Carrboro, Hillsborough, southeast Durham and northern Chatham County.

The newspaper also publishes an online version that attracts 10,500 unique visitors, on average, each school day.

The student editor hires the newsroom staff, each of whom is paid $200 to $700 a month. DTH Media Corp. employs a newsroom adviser who provides a training for the staff and volunteers.

A student advertising manager and staff of 25 handle all ad sales under the direction of a non-student advertising director.

Last fall, DTH Media Corp. began piloting a new business, DTH Media Services, with public-relations students from UNC working with clients to produce brand content.

The new alumni association has developed a list of 2,000 alumni, will distribute an alumni newsletter three times a year, and in February hosted an inaugural homecoming event.

It included two days of workshops and a dinner that attracted 60 alumni and presented its first Distinguished Alumni Award to Edwin M. Yoder Jr., who served in 1955-56 as DTH co-editor and in 1979 won the Pulitzer Prize for editorial writing at The Washington Star.

The alumni association, Wolff says, will focus on fundraising, networking among alumni for their own professional development, and mentoring students.

Incentive pay plan for UNC fundraising chief raises eyebrows

By Todd Cohen

CHAPEL HILL, N.C. — In a highly unusual move, the board of trustees at the University of North Carolina at Chapel Hill on Thursday approved a proposal by Chancellor Carol Folt to let the next vice chancellor for development receive incentive pay of up to 25 percent of his or her base pay by meeting goals set by Folt.

UNC, which is searching for a permanent fundraising chief, now can pay the new vice chancellor up to nearly $396,000 a year, based on a maximum set by General Administration for the 17-campus UNC system, according to The Herald-Sun in Durham.

That means the new vice chancellor could earn nearly $99,000 in incentive pay in addition to his or her base pay.

Speculation is that Folt may have a candidate in mind who already is paid over $500,000 a year, or wants to be paid that amount.

Incentive pay, if based on a percentage of contributions, could run counter to ethical principles for fundraising because it could give at least the appearance that, in soliciting gifts from donors, fundraising professionals might be acting in their own self-interest and also might be trying to secure a gift sooner than they otherwise would have.

Folt, former interim president at Dartmouth, succeeded Holden Thorp on July 1 after he resigned last September in the face of a controversy involving Matt Kupec, who the same week quit as vice chancellor for university advancement.

Earlier this year, before taking office but after she was hired, Folt participated in the decision to dismiss search firm Witt/Kieffer from the search for Kupec’s permanent successor.

Thorp had initiated the search after he announced his resignation but before he stepped down this summer.

Search firm Isaacson, Miller since has been hired to conduct the search.

Julia Sprunt Grumbles, former corporate vice president at Turner Broadcasting, is serving as interim vice chancellor for university advancement.

Thorp hired her after Kupec quit.

In the face of all the maneuvers over filling the University’s chief fundraising job, the plans for a long-delayed comprehensive campaign that at one time was expected to total $3 billion remain in limbo.

UNC-CH launches search for chief fundraiser

By Todd Cohen

CHAPEL HILL, N.C. — Holden Thorp, outgoing chancellor of the University of North Carolina at Chapel Hill, has named an 11-member search committee to help identify candidates to be the school’s new vice chancellor for development.

UNC-CH already is searching for a new chancellor to succeed Thorp, who announced in September he would step down at the end of the school year this June.

“With the search for the University’s next chancellor well under way, it’s important to initiative the process now to time the vice chancellor search so my successor will have an opportunity to provide input and be involved in the interview process and final selection,” Thorp says in a message to faculty and staff.

He says UNC also is “using this strategy with the search for the executive vice chancellor and provost.”

Thorp says in the message that he consulted with his predecessor, James Moeser, “who had to deal with two vacant administrative positions when he became chancellor in 2000.”

Moeser “confirmed my thinking that initiating these key searches now would help accelerate the transition process within the administration and put my successor in the best position after taking office.”

Chairing the search committee will be Lowry Caudill, a UNC-CH alumnus, member of its board of trustees, co-founder of Magellan Laboratories, and an adjunct faculty member.

Thorp announced his resignation a week after Matt Kupec, the school’s long-time vice chancellor for university advancement, quit in the face of disclosures he had taken at least 25 personal trips at the university’s expense with Tami Hansbrough, a  fundraiser at the school and the mother of its former star basketball player Tyler Hansbrough.

She and Kupec, who both are divorced, had been in a relationship.

Kupec had pushed for UNC to hire Hansbrough, who quit several days after Kupec, and Thorp knew about her hiring and about Kupec’s role in it, according to published reports.

Thorp subsequently named Julia Sprunt Grumbles, former corporate vice president at Turner Broadcasting, as interim vice chancellor for advancement.

And Elizabeth Dunn is retiring this month as senior associate vice chancellor for university advancement.

Planning for a comprehensive campaign at UNC to raise $3 billion, an effort that had been expected to begin its quiet phase next summer, remains uncertain.

Four years ago, UNC was set to launch a multi-billion-dollar campaign when the economy crashed, so the school put the campaign on hold.

Last spring,  Thorp and Kupec reportedly asked the board of trustees to approve launching the campaign’s quiet phase this past July, but the board rejected the proposal, concluding the school was not ready and needed to spend another year working on its strategy.

Leadership changes scramble plans for UNC campaign

By Todd Cohen

CHAPEL HILL, N.C. — Planning for a comprehensive campaign at the University of North Carolina at Chapel Hill to raise $3 billion, an effort that had been expected to begin its quiet phase next summer, likely will be put on hold, for the third time in four years, after UNC’s chancellor announced last month he would step down at the end of the school year and the school’s vice chancellor for university advancement quit the previous week, fundraising experts and people close to UNC say.

“They’re going to need to put it off,” says Karla Williams, a national fundraising consultant based in Charlotte, N.C. “The campaign has to be owned by the chancellor and his or her board. That’s where the ownership for a major initiative rests. If it doesn’t rest there, it’s going to fail.”

On-again, off-again

The latest turn in the on-again, off-again campaign came Sept. 17, when UNC Chancellor Holden Thorp announced he would leave his job at the end of the school year and return to his job as a professor.

That move came a week after Matt Kupec, the school’s long-time vice chancellor for university advancement, resigned in the wake of disclosures he had taken at least 25 personal trips at the university’s expense with Tami Hansbrough, a  fundraiser at the school and the mother of its former star basketball player Tyler Hansbrough.

She and Kupec, who both are divorced, have been in a relationship.

Kupec had pushed for UNC to hire Hansbrough, who quit several days after Kupec, and Thorp knew about her hiring and about Kupec’s role in it, according to published reports.

Challenge, opportunity

Williams said the resignations of Thorp and Kupec represent a big challenge and a big opportunity for UNC.

“Universities, like all public institutions, are held to higher standards of behavior, when it comes to ask [donors] to give their money to the university,” she said. “It won’t take a lot for the board and donors to embrace new leaders, as long as the search is exhaustive. It will be a new kind of leader, no doubt a good thing for the university. New leadership brings new life. It’s inevitable.”

But people at and close to UNC say it has a lot of work to do to prepare its fundraising operation and systems to take on a $3 billion campaign.

Four years ago, UNC was set to launch a multi-billion-dollar campaign when the economy crashed, so the school put the campaign on hold.

Last spring,  Thorp and Kupec asked the board of trustees to approve launching the campaign’s quiet phase this past July, but the board rejected the proposal, concluding “you’re not ready, you don’t have a strategic plan, you don’t have vision, spend another year working on it,” said someone close to UNC who asked not to be identified.

Kupec, who was a star quarterback at UNC and has worked in its advancement operation for 20 years, is known as a hands-on fundraiser who enjoys working with donors but does not like managing.

“He felt managers were a waste of time and all you needed to do was go out and ask for money,” the person close to the school said.

Under Kupec’s watch, the school raised billions of dollars but it also has just begun wealth screening, or collecting publicly available data on the capacity of donors to give, the person close to UNC said.

“If I had been planning to announce in July, that should have been happening a year or two before that,” that person said. “I’m a little shocked they haven’t done that, whether in a campaign or not. It’s like getting an oil change. Every so often you do it.”

And recently, UNC reorganized its unit of regional major gift officers who, instead of cultivating major donors, now will prospect for major donors and then refer them to development officers in schools, departments and other units that focus on issues those donors care about, said Scott Ragland, director of development communications at UNC.

The person close to UNC said the kind of development work those major gift officers have done is critical for a school that plans to launch a multi-billion-dollar campaign in which a the biggest gift or handful of biggest gifts will total hundreds of millions of dollars.

“My gut is they don’t know their prospect pool enough to do a $3 billion campaign,” the person said.

Internal capacity

Carol O’Brien, a consultant in Durham, N.C., who has advised UNC in the past and currently is working with one of its programs, said the school will need an “objective assessment of their internal capacity” to run a campaign, including the entire fundraising infrastructure, budget, personnel and systems, including information technology and prospect research.

And when it comes time to look for a new vice chancellor, she said, the school should hire an executive search firm and work with a high-level committee that includes both university academic leaders and volunteer leaders to develop a job description that reflects the complexity of fundraising at a major university.

“Most campaigns now have large areas that involve interdisciplinary work, and research projects, and it takes someone who is conversant with these academic programs and priorities to be effective in high-level giving,” said O’Brien, a former director of development at Cornell University who has worked as a consultant on multi-billion-dollar campaigns at Duke, Cornell, Harvard and the University of Pennsylvania.

The search firm also should find ways to talk to some of UNC’s top donors “to get a sense of the relationship they would like to have with this person,” she said.

Chief fundraising officers at universities, she said “need to work effectively with many people inside and outside the university, and the search process needs to ensure that the candidates and ultimately the person selected are sufficiently broadly gauged to be able to do that.”

On Sept. 19, UNC announced Thorp had named Julia Sprunt Grumbles, former corporate vice president at Turner Broadcasting, as interim vice chancellor for advancement.

Focus on donors

Williams said the critical job now is for the board of trustees to find a new chancellor who in turn will need to “forge a new agenda and new relationships and do a campaign that has their marks on it.”

And the UNC board will need to reassure donors in the wake of  the recent upheaval that the campaign “will stand on its own merit,” Williams said.

“Donors are the ones that really matter,” she said. “True philanthropy is based on value association. If a university has not upheld and stood up for the kinds of  values that the donors of that institution have shared in the past, such as integrity, if the veil of integrity has been broken, donors will say, ‘I’m no longer in sync because our values apparently not the same.'”

So while loyal donors may still make a “token gift to validate their relationship to the university,” she said, “if their pride has been affected they’re going to withhold a true investment, a large gift. They’re in a wait-and-see mode.”

Richard Krasno, executive director of the William R. Kenan Jr. Charitable Trust, which has given over $100 million to  UNC, said donors “need to consider the larger picture and be proud of the excellence that this fine university has achieved over a long period of time, and continue to be supportive.”

Paul Fulton, a member of the board of governors for the 17-campus UNC system and former co-chair of a campaign at UNC that ended in 2008 and raised $3.3 billion, said the UNC’s fundraising and its development office are in “really good shape with a good organization.”

In the fiscal year that ended June 30, UNC received $287.4 million in gifts, its second-best year ever.

“Matt was good and we’ll miss him,” said Fulton, a former president of Sara Lee Corp.,  “But what he did was just bad judgment.”

A key question now, he said, is whether Thorp should hire a new vice chancellor or leave that decision to his own successor.

O’Brien said the likely course would be to conduct the chancellor search first.

“That will give them the best opportunity,” she said, “to move ahead with the leadership transition and campaign planning.”

Fundraising mess a chance for true change at UNC

By Todd Cohen

The University of North Carolina at Chapel Hill has an unprecedented opportunity to heal itself.

Wounded by a fundraising scandal that in a single week claimed the jobs of its chancellor and its vice chancellor for university advancement, UNC also has a rare chance bring to heel an over-indulged athletics program that for generations has held hostage the university’s culture of academic excellence.

The huge task facing the school’s board of trustees is to show, finally and decisively, the leadership it has for far too long lacked the vision and backbone to exercise.

It needs to hire a chancellor who understands that teaching, research and service to the state are the school’s core mission, not the fanatical and sometimes destructive pursuit of winning at all costs on the basketball court and football field.

And it needs to craft a vision for an institution geared to delivering education programs and services that increasingly will be needed to survive and thrive in a digital, networked and fiercely competitive global marketplace.

Then, and only then, can UNC resume its long-delayed plans for a campaign, which at last estimate was expected to try to raise $3 billion.

The scandal was triggered by disclosures that Matt Kupec, a  former star quarterback at UNC who last week resigned as vice chancellor for university advancement, had taken at least 25 private trips at university expense with Tami Hansbrough, a fundraiser at the school and the mother of former star basketball player Tyler Hansbrough.

She and  Kupec, both divorced, have been in a relationship, according to published reports.

Kupec had pushed for UNC to hire Hansbrough, who also quit last week.

And Holden Thorp, who reportedly knew about her hiring, Kupec’s role in it, and their relationship, and who accompanied the couple on some of those trips, announced Monday he would step down at chancellor at the end of the academic year and return to his job as a professor.

The institutional meltdown also has put on hold, yet again, plans for the fundraising campaign.

That campaign was set to begin its quiet phase four years ago, but the collapse of the capital markets sidelined those plans.

Thorp and Kupec last spring asked the trustees to okay plans to begin the quiet phase this summer, but the board reportedly told them they were not ready and needed to spend the year planning the campaign.

As Charlotte-based fundraising consultant Karla Williams told me, a campaign of that size is not about raising money, it is about transforming an institution.

Working to identify the needs of faculty, students, alumni, donors and other constituents, and engaging them in the process of setting a vision for the future, has the end result of raising money to make that vision a reality.

Because it is the board and the chancellor who must lead the effort to set that vision and raise that money, the board’s first job is to find a new chancellor who understands the increasingly more vital and complex role a public university must play in the 21st century.

The new chancellor, in turn, will need to find a new vice chancellor for university advancement.

As Durham-based consultant Carol O’Brien told me, the chief fundraising officer at a 21st century university must straddle a range of diverse and sometimes competing communities.

That fundraising executive must be skilled at engaging donors, academics and other constituents and addressing their diverse and subtle needs, while also managing the complex and myriad moving parts and systems, and supporting  the staff and volunteers, that together constitute a big fundraising operation.

The board of trustees at UNC-Chapel Hill has a chance to advance the school’s mission of providing education programs and services needed to help our state become a better place to live and work.

To do that, it needs to lead the institution, rather than enabling and groveling to its athletics boosters in return for posh seats and the chance to schmooze with celebrities and big shots in the Dean Dome or at Kenan Stadium.

The board must set its own vision, find the chancellor it wants, and work with that chancellor and with donors to build the university the state needs and deserves.