Recording Pre-Exit Philanthropy Commitments

The concept of pre-exit philanthropy is becoming part of the modern fundraiser’s knowledge base. As more of these programs spin up across Higher Ed, both fundraisers and donors develop an easy familiarity with how the programs work. This familiarity will in turn increase the rate of adoption — especially if newly established programs execute well and continue to experience success.

So it’s a good time to start moving beyond fundamental concepts and get down to brass tacks here on the blog. What is the day-to-day work of building and executing a pre-exit philanthropy program? What can you expect along the way? How do you know you’re on the right track? Which metrics matter?

A common question I get is “how do you record and track these commitments?” It’s pretty simple, actually. With a bit of additional planning, you can create a basic system to understand what’s really happening in the philanthropic business you’ve just created — and then grow it.

Track your prospect pool with an interest code

Measuring success begins with understanding your denominator. Where are your startup alums, and how engaged are they? Who are your best prospects? How many alumni innovators might eventually sign on to your pre-exit philanthropy program? In short, what is the size of your market?

In startup speak, this is known as ‘Total Addressable Market’ or TAM. For startups, massive TAM is much more attractive to potential investors, and in fact it is required in order to generate the kind of returns that power venture capital economics.

That’s a handy concept for you to know. Luckily, university pre-exit philanthropy programs cost so little that even a small TAM can make it worth while. You do need to know it, though — to guide your solicitations, measure your progress, and increase the value of your platform.

→ Here’s a post on how to find your alumni entrepreneurs.

Create an interest code in your database to tag alumni you may want to solicit for your program at some point. Depending on your system, it could be a philanthropic interest code, a demographic attribute, etc. Use whatever makes sense to you. Make sure you can pull a report of alumni with this code, and make sure it’s easily modified as you learn more about each alum. Apply this code to any alumni with equity in a startup, to the best of your knowledge and estimation.

Track your asks in your CRM

Some schools track their solicitations assiduously. Others track only their contacts and gifts. Let’s commit, as a community of practice, to tracking our pre-exit philanthropy solicitations. There is no better way to understand both our own institutions’ progress, and to establish benchmarks for pre-exit philanthropy broadly.

Tracking solicits can be a point of confusion, because you’re not actually asking for a gift, but rather for a good faith pledge to be realized in the future. In this respect, it’s much like a revocable bequest intention, and you may find it easiest to track it similarly.

Recording the solicitation will vary widely by institution. It’s impossible to recommend a complete scheme without reviewing your data conventions. Partner closely with your prospect management team to understand the best way to enter the info and — critically — to design a recording method that will actually be adopted by your fundraisers. At minimum, you need

to know who’s been asked, and who has accepted or declined
to know when the ask happened
to have the ability to pull that information to assess progress

If your system can handle it, track solicitors as well. Some databases require a dollar amount to be entered if you are creating a specific proposal or proposal purpose. In this case, simply enter “$0,” or $1" if a nonzero amount is required.

Track your members with an affiliate tag

Almost every institution has a way to track bequest intentions. This method applies neatly to your pre-exit philanthropy members. Like bequest intentions, pre-exit philanthropy commitments also have a level of uncertainty — you’re not certain whether they will come to fruition (e.g. if the startup does not succeed), or what the eventual gift size may be.

Create an affiliation tag, gift club, or other donor attribute you can apply to a member’s record. Once you’ve recorded a successful solicitation, add the member to the gift club. Importantly, this allows you to pull all current members at any given moment. You won’t miss anyone when it comes to communications or recognition.

Ultimately, members should have three main data points — a gift club entry, a solicitation record, and the interest code.

For alums who just sign up on their own, make sure you apply the ask data (step 2) and the interest code (step 1) retroactively.

This setup is built to scale.

It’s easy to wrangle, provides a ton of insight, and grows with you no matter how fast your membership increases. Once the gifts mature, simply book the revenue as you normally would.

Your operational design will work hardest when built on an understanding of the fundamental processes at work in pre-exit philanthropy. Master the first principles of this model and the tactical aspects will take shape.