If anyone mentions naming rights, others in the room always sit up and listen...such a topic is of interest to donors, fundraisers, foundations, corporations, friends of these entities and the general population. Sometimes the topic inspires excitement and sometimes it inspires criticism. Nonetheless, naming rights marketing has become an integral and successful strategy in the fundraising world and is used by most organizations.
Donors have meaningful reasons for naming a building or a program or a project or an endowment within an organization:
Usually they already have an attachment to the organization--or, if not, they may want an attachment for their own reasons.
Making a gift of significant magnitude may be designed as an inspiration for others--perhaps this is part of campaign and perhaps not. Such gifts are sometimes used as lead gifts or challenge grants within a fundraising program.
Perhaps the donor would like recognition for reasons of his/her own; they may be accumulating wealth and would like to make a significant gift to increase their own influence in the community or teach their children about philanthropy.
No matter the reason, such a gift to support a naming opportunity has a genuinely positive impact and becomes very effective in generating other gifts from the community if the organization can guide it in that direction in an insightful manner.
Michael Bloomberg, former mayor of New York, made several gifts to his alma mater, Johns Hopkins University, that have been described as seismic. Seismic because of the size of the gifts as well as the cumulative impact they are making on the University. His most recent gift in 2018 was $1.8 billion, bringing his lifetime contributions there to about $3.35 million. In gratitude, the University has named one of their schools for him: The Johns Hopkins Bloomberg School of Public Health, the largest public health program in the country and the #1 such program.
The Johns Hopkins Bloomberg School of Public Health is the leading authority on the improvement of health and prevention of disease and disability. Throughout the last six months the school and Mr. Bloomberg have played an important role in helping to guide and improve the country's response to Covid-19. And with the excellence that is built into the public health program, they are preparing for the next pandemic and strengthening their impact in eliminating illness and death. Support for this kind of excellence is a gift to the world.
Mr. Bloomberg's gift of $1.8 million in 2018 was designated to provide scholarships for any student who could most benefit. He noted then that his first gift to Hopkins was $5 the year after he graduated. He was grateful over the years for the fact that his education so benefited his career that he was inspired to make such gifts in the hope that he could help other students and perhaps inspire other gifts. Critics felt that he should have given the gift to other more needy schools. Please. Hopkins is where his heart lies, that's where he has an emotional attachment. And in the process he is helping to build further excellence into already excellent programs.
It is so important to have organizational policies that guide the naming opportunities. Many of these gifts are quite large and ongoing relationships with donors are very important to everyone. Once a policy has been established, it should be shared with prospects and donors and should really be applied consistently. While everyone wants to talk through a naming opportunity and maximize the benefits, it is very important that the policies be meaningful and strictly enforced, consistent from one situation to the next.
Policy statements usually address issues like the timing for selecting and announcing a name; general and specific types of gifts that include naming rights; methods for donor recognition (and there is a litany of opportunities here), the duration of the naming rights (should the duration of the name be permanent or of limited time?); and what happens if a donor fails to finalize the gift, a rare occurrence, but an important issue. And there are other issues on which the policies are focused along these lines.
In the past I have worked on many projects and programs for which naming rights were granted. One of my favorite came from a gentleman who is a man for all seasons, a man who has a love of life, Louis J. Fox.
In 2008 the Center for Vision Restoration of UPMC and the University of Pittsburgh announced a $3 million gift from Mr. Fox, a Pennsylvania native and Pitt graduate. Mr. Fox, who is a retired commodity merchant banker and trader, embraced the Center's mission to discover cures for blindness and vision impairment. His gift was planned to aid efforts to pioneer comprehensive patient driven research and clinical therapies to treat people with limited sight. To honor his generosity the center is now known as the Louis J. Fox Center for Vision Restoration.
Mr. Fox had been diagnosed with central retinal vein occlusion, an incurable condition caused by blood vessel obstruction. It rapidly left him with life-changing vision loss. He said at the time, "My heartfelt desire is that my contribution speeds the discovery and development of therapies that will make it possible for people to see again."
This naming opportunity has enabled the University to pursue important research. It drew Mr. Fox even closer to those involved in the research and he also became a significant fundraiser for the institution and, as he was inclined, he made additional contributions as well to help progress various compelling initiatives. The Center has been recognized internationally, bringing even more respect and notoriety to Pittsburgh as well as to the institutions themselves. Mr. Fox became very well known on campus and nationally because he took an active role in the approaches to research underway--this was all very personal for him. And, of course, he continues to support the Center in many ways.
How does one establish the financial level for a naming opportunity? This is a highly debated issue and recommendations include:
Develop a listing of priorities that could potentially be named within the organization; what are the projects, programs, endowments, capital needs, etc.
Determine the actual cost of these items, although this will be used as one more data point. Likely the naming opportunity will not cover the actual cost but it is important information to have available.
Review naming levels at comparable programs at similar organizations throughout the country.
Review naming levels at any comparable programs in the region.
Review all opportunities that were already named within your own organization to understand the history.
Using all of these data points provides a context so that you can begin to construct the naming levels at your own organization. Are these high enough? Too high? Adjust.
Then begin to match the levels to potential prospects.
Develop your pricing strategies and, in the process, adjust the pricing on the naming opportunities to ensure that there are sufficient prospects. Remember that as time goes by it is easier to lower the price than to increase it.
One last example regarding naming opportunities is endowment, funds established into perpetuity. Endowed funds bring significant stability to an organization: endowed funds for faculty members, endowed term chairs and chairs, special interest endowed funds; endowment to support young investigators or young artists; funds for travel to important educational seminars, etc. While these can be done at many levels, following national trends is a good practice.
Endowed chairs at universities have become very important to ensure competitive advantages. Such chairs are used to recruit or retain faculty stars. There is no doubt that they increase excellence in a department or division and these chairs are nationally prestigious. There is no doubt that they make an economic impact on the community as well. The return on investment is used to support faculty salaries, support research and education for the holder of the chair, support recruitment of staff in the department--many needs of the faculty member holding the chair. A smaller percentage of the return is re-invested into the corpus of the endowment so that the fund continues to grow and remain competitive.
Such endowments are marketed in ways that are attractive for donors as well as the organization. They are permanent and the donors name will live within the institution in perpetuity. The endowments become a special part of the organization's donor history.
It is important to ensure that the amount set for the chair or the fund is satisfactory for the organization because the price will remain fairly stable for a long period of time. Again, the value of such an item is incomparable in terms of providing sustainable advantages. And the naming of the chair ties the organization and donor together for years to come in a most positive manner.
One thing that is most clear: endowments are valuable treasures for an institution.
"Naming opportunities" is a very broad category and only touched upon in this post. Other questions include determining best stewardship practices for those who so generously put their name on a building or a chair or a program--what should you be doing? What happens if a person holding a chair leaves for another organization, what are your obligations to the donor? What happens if a named program begins to evolve in a different manner--how do you discuss this with the major donor and when? How do you use the named opportunities to spark other gifts? When you name a building, does that mean that you name the entire organization within the building? What implications does this have for the organization itself?
Naming opportunities also have implications for the private sector in supporting sports teams, or helping to support state and federal programs for such things as parks. Such opportunities can support the governmental and private sectors in creative ways, making an impact on the entire economy. Future years are going to require such naming opportunities so that organizations survive to make an impact--it's a topic that will arise many times and change many current practices. Stay tuned...