Summary: When institutions bypass the cultivation process, and use solicitations as form of cultivating their alumni, the practice is not without consequence. The new VAESE data shows the surprising impact of this practice on institutional giving. About a 4 minute read.
A classic CASE article teaches newcomers about the fundamentals of fundraising. It references the ‘4Rs” of fundraising/development: Research, Romance, Request, and Recognition. Of the four phases, it suggests that 60% of the fundraising process should be spent on romancing alumni. Or in other words, cultivating and building relationships with alumni to engage them over their lifetime.
But many institutions have adopted this cockeyed idea that a solicitation is akin to romancing. That ongoing, frequent solicitations has the effect of endearing alumni to their alma mater and cultivating life-long relationships.
Somehow, the amount of time spent romancing alumni before the first solicitation has dwindled to nothing. What was once a gap of a few years is now just a few weeks before the first gift solicitations start to fly.
Just how pervasive is this practice?
Among the 600+ participating institutions in the VAESE Alumni Relations Benchmarking Study, roughly 70% report to sending two or more gift solicitations to new graduates within the first year. Some institutions send as many as 10 solicitations. Among all institutions the average is 3.4 solicitations of per year.
To me, this “ask early and ask often” mantra defies common sense, and isn’t a sustainable long-term strategy. And yes, I know, some institutions get away with it, but our study shows that these institutions are the exception and not the rule.
And now we have data to show the real impact of this practice as revealed in the alumni Quit Rate or Opt-Out Rate— the rate at which alumni ask to be listed as “Do Not Call,” “Do Not Contact” or “Do Not Solicit.” Here's what we learned from the survey:
- 40% of institutions report a worsening Quit Rate last year, where more alumni are "quitting" contact with their alma mater. Only 6% report that fewer alumni are opting-out over time.
- Institutions that don't solicit new grads have a Quit Rate of just 7%.
- The Quit Rate among institutions that solicit new grads two or more times per year is 16%, more than DOUBLE that of schools who don't solicit new grads in the first year. .
What’s the impact of soliciting new grads before they are properly “romanced?”
I could speak in terms of lost opportunity from alumni who disengage because of the perception that non-givers are treated like second-class citizens. I could talk about how important it is to give alumni a few valuable and compelling benefits to establish trust and demonstrate good-will, and how that approach fosters long-term giving relationships.
But I’ll speak in terms of cold, hard cash, as it’s often the only language some advancement and development officers understand.
Just like the Federal Trade Commission’s guidelines, when alumni ask to be listed as ““Do Not Call,” “Do Not Contact” or “Do Not Solicit,” they similarly expect that those requests will not expire. Although a few states may alter those requirements, at most institutions, alumni who opt-out are removed from your solicitation pool forever. And that means a lot of lost revenue.
How much revenue?
Take for example an average institution with 100,000 alumni and sends two solicitation per year to new grads. With a 16% Quit Rate, that translates to 8,700 additional dissatisfied alumni (above and beyond the typical 7.3% rate for institutions that don’t solicit new grads.) That’s 8,700 alumni who are no longer eligible to be solicited, even when their life circumstances change or they eventually become inclined to give to their alma mater.
On a bigger scale, lets look at a typical institution with 300,000 alumni. The 16% opt-out rate reflects about 26,000 additional alumni who are unnecessarily excluded from being solicited.
If we put a dollar amount to each alumni who opts out, the numbers can be staggering. Using higher education giving rates from the 2015 VSE, the average gift-per-contributing alumnus is $1,535, and the average alumni participation rate was 8.3%. If you do the math, that’s potentially tens of millions of lost dollars over time. Although each institution’s circumstances differ, it’s still a ton of money that vanishes unnecessarily.
Alumni relations is all about preparing alumni to give for a lifetime. But if priorities get out of whack, and short-term fundraising goals supersede long-term cultivation objectives, this new data reveals just how much over-aggressive fundraising tactics can threaten overall revenue. The cumulative effect of less revenue is fewer students who are given opportunities to learn, a diminished capacity to conduct vital research, and fewer lives changed for the better.
I know I’m in the minority, but I think it’s time for many institutions to re-think their short-term focused alumni solicitation practices, and figure out how to romance their alumni a little bit more.
Would you agree or disagree? I’d love to hear your comments.
I continue gleaning exciting new data from the VAESE survey data. I’ll keep releasing new data and analysis in the coming weeks. You can be notified when the newest survey results are released by simply subscribing to our notifications here, or completing the form above.