The Giving Pyramid

In recent years, DEA has taken an important step to secure its financial future – the establishment of a Development Office. This commitment to creating an administrative position which oversees fund-raising and other public relations efforts is an essential feature of operating the school according to proven independent school principles and practices. These proven practices include developing a culture of giving by parents, alumni, grandparents, and other friends.

This article is written to share with you one of the interesting concepts of successful fund-raising – the so-called “giving pyramid.”

This concept is graphically represented below. As this applies to independent schools (and many other not-for-profit organizations), the base is the Annual Fund. The Annual Fund is the largest group of donors, but the amount from each donor is smaller than the individual gifts in the upper levels of the pyramid. The Annual Fund represents a broad base of contributors and the donations are typically used to supplement the annual operating budget. It allows the school to undertake some projects that can’t be paid for from the general fund of tuition and fees revenues. The general fund pays for personnel and for fixed expenses such as insurance, transportation, energy, educational supplies, etc. The Annual Fund is in some ways the foundation of the school’s success because it allows for the “extras” which help make the school an attractive choice for students and parents. At DEA, we are calling our Annual Fund campaign the “Eagle Fund” and we encourage your support.

The middle level of the giving pyramid represents those persons who will contribute to the capital fund. The theory holds that up to 20% of persons who donate to the Annual Fund will also, at some time, make a contribution during capital campaigns which are conducted to finance major renovations and construction projects. This is one reason why it is so important to build the Annual Fund base as broadly as possible. Capital contributions are typically multi-year pledges which are often used as collateral for long-term bank or bond financing for major projects. Could DEA replace the building that burned or completely renovate the main classroom building through a capital campaign? We must believe in that possibility and work toward it.

The top level is a small group of donors who will make a major gift to the school – perhaps a bequest to establish a financial aid endowment or a legacy gift to create a faculty “chair” in honor of a favorite teacher. Again, it is believed that some number of donors to capital campaigns will raise the bar and remember the school in estate planning – becoming major gift contributors.

What’s the point of all this? It is, of course, that we need for all of our constituents to support the Eagle Fund – to develop the habit of supporting our school with an annual gift. While most constituents may never contribute to the capital fund, some eventually will. Ultimately, some of those donors will help build buildings and some will contribute to an endowment. With everyone’s support we will create our giving pyramid and ensure the financial success of our school to serve future generations of students.

Please contribute to the Eagle Fund campaign!

Contact the Development Office, or simply mail a check with a notation that it is for the Eagle Fund. If you would like to speak with someone about a capital or major gift, please contact the Head of School.