Run Away (From Your Dues-Paying Alumni Program)

Data from the yet to be released 2024 VAESE alumni relations benchmarking study confirms our earlier findings in 2020 that it's unlikely for non-Power 5 institutions to succeed with a dues-paying alumni program. Our data shows why your institution should not start a dues-paying program, or why you should consider getting rid of yours, especially if you're not at a Power 5 school.  

(About a 5 minute read)

Can your alumni organization be successful with a dues-paying program? 

Should you start a dues-paying program at your institution?

A lot depends on

1- How you define success.

2- Whether or not your school’s football team is frequently on national TV.

How do you define a successful dues-paying alumni organization. In my definition, success means having a self-sustaining membership program that generates enough revenue to support other alumni initiatives. Now, I understand that some may argue that this definition is too narrow and focused on ROI and business objectives, but bear with me for a moment.

According to the VAESE study, dues-paying alumni organizations are most successful at large institutions, particularly those associated with the Power 5 conferences. These conferences include the ACC, Big Ten, Big 12, Pac 12 (or whatever is left of it), and SEC, along with notable independents like UMass, Army, and Notre Dame.

Unfortunately, for non-Power 5 conference schools, achieving success in dues-paying programs is quite rare. The data paints a clear picture of the differences between large schools with such programs and the rest.

Here are some of those key differences:

Power 5 schools are in a completely different league when it comes to their dues-paying programs. Their membership is not only 12 times bigger on average, but they also engage a higher percentage of their alumni.

When we surveyed alumni organizations about their membership trends, 70% of Power 5 schools reported that their membership rates were either growing or remaining stable. However, when we looked at the non-Power 5 schools, 60% of non-Power 5 schools reported a decline in membership rates over the past year.

Another striking statistic that highlights the stark contrast between the two groups is the overall renewal rate. While each alumni organization has its unique challenges and costs related to acquiring, retaining, and servicing members, maintaining a minimum overall renewal rate of 60% is vital for a steady membership base. The Power 5 schools stand out with an impressive average renewal rate of 69%, while non-Power 5 schools lag behind with a disappointing 28% renewal rate. Notably, this average renewal rate for non-Power 5 schools is down from 43% in our 2020 study.

It is evident that smaller institutions encounter significant hurdles in achieving steady returns on investment through their dues-paying programs. The bottom-line is, for nearly all non-Power 5 alumni organizations, a self-sustaining dues-paying alumni program is almost impossible to maintain over time.

Why Don’t Dues Work at Non-Power 5 Schools?

Why are larger organizations more successful with a dues-paying model? Clearly, their football or basketball teams' consistent presence in national and local media can't hurt. But there are many other practical factors like the strong cultural bonds these institutions have cultivated over the years with their respective communities. This cultural connection is best illustrated by the uniquely American phenomenon of big time college sports. It's further reinforced by such traditions as tailgating, marching bands, stadium-rocking sing-alongs, live-animal mascots, and even yell practice. It all contributes to the unique position of these Power 5 schools.

Yet despite these compelling reasons, let's put aside the discussion about cause and effect, and instead compare the sheer differences in size, budget, and staffing that exist between dues-paying programs at Power 5 schools and all the rest.

Not only do the Power 5 schools have a significantly larger pool of alumni, but their average budgets are 3 1/2 times bigger. They can spend more money per alumni. Their email lists are far more robust, and they have 350% more people on their team. 

Are you considering starting a dues program?

If you happen to be effectively managing a self-sustaining membership program at a non-Power 5 school, hats off to you. Your accomplishment is indeed rare, yet it might inadvertently inspire other institutions to try and emulate your success. Let's hope not.

If your institution is similar in size and exposure to a Power 5 school, I still say use extreme caution before committing to a dues-paying program. Thoroughly evaluate the alternatives and long-term consequences of establishing a program that you can't easily undo.

Consider also that younger alumni, such as Millennials and GenZ, are not as inclined to join traditional member-based organizations. While they make up a significant portion of the U.S. workforce at 41%,  according to this study they comprise less than of 30% membership groups nationally. Navigating this demographic shift is a challenge your organization will need to address.

If your institution is not similar in size and exposure to a Power 5 school, my recommendation is simple: don't do it! In fact, don't just walk away...run away!

Why?

If nothing else, there are better methods to engage and entice alumni without establishing a institutionalized caste system that favors certain alumni over others. A dues-paying program can not only establish a hierarchy of alumni, but institutionalizes the division between the privileged and the marginalized.

We should value the contributions of all alumni who give in terms of their time and talent, and not just their money. Cash is not the only valuable asset that can be gifted to an institution. A dues program tends to prioritize cash contributions over other valuable forms of engagement, which may not be the best long-term strategy for building a strong alumni community.

While it is true that some institutions experience higher giving rates from dues-paying members, I have yet to come across reliable data that universally supports the idea that paying dues causes alumni to give more. While there may be a correlation between dues-payers and higher giving, I have yet to see data that shows dues paying causes more giving across the board. But that's an article for another day. 

Here are some other stats you should consider:

• Our latest study shows that 80% of all alumni organizations report to having a non-dues-paying model. That's an increase 8% from our 2020 study. (The trends suggest that the dues-paying model is slowly fading into obscurity.)
• Of all alumni organizations that report to having studied the pros and cons of a dues-paying model in the past 8 years, less than 2% have since approved and implemented a dues-paying program. (Are you confident your institution is vastly different than the majority of institutions who have studied and rejected a dues-paying model?)
• Dues paying organizations tend to have a greater focus on increasing revenue, rather than engaging more alumni. Dues-paying organizations are 36% more likely to make "increasing revenue" a priority over "increasing the number of alumni who engage."  (Is a dues-paying model truly the best way to achieve your alumni engagement objectives?)
• Dues-paying schools are 63% more likely to have alumni opt-out rates (alumni asking to be put on the "do not call," "do not contact" list) that are 30% or higher. (The increased number of membership solicitations may be a reason for the higher number of opt-outs. See our article: A Cockeyed Idea: Soliciting Alumni as a form of Cultivation)
• Dues-paying organizations have a 33% higher rate of alumni who opt out, as compared to non-dues paying organizations. (Are you willing to sacrifice the a permanent relationship with some of your best-giving alumni, simply because they are tired of being solicited to pay dues to your association?)
• For any type of membership organization, the rule of thumb is that an organization must contact a member 15 times during a membership year in order to see overall member renewal rates increase year-over-year. (Have you considered the need for increased communications with alumni? Do you have the capacity to communicate with alumni with greater frequency? What could you do with those resources if you didn't have to support a dues-paying model?)
• The average length of a dues-paying member is 5.9 years before lapsing for good. (Do you have a strategy to replace your members every six years? Are you prepared to spend up to 80% of your association’s annual budget on member acquisition?)

Navigating the Transition: Moving Away from a Dues Program

One crucial aspect to consider is how to transition away from a dues-paying program if you decide to end it. Many organizations face significant challenges in phasing out their dues program. One of the most complex issues revolves around "lifetime members" who were promised ongoing association benefits but now risk being left with little or nothing. While some organizations have successfully eliminated their dues program with minimal resistance from alumni, there is always the possibility of pushback.

This predicament often leads schools to reluctantly continue their dues-paying program, even if they want to phase it out. 

Final Word

If you have successfully managed a dues-paying program at a non-Power 5 school, I would greatly appreciate hearing about your experiences. What valuable advice can you share with others?

Have you navigated the transition away from a dues-paying program at your institution? What words of wisdom would you offer to those contemplating the launch or conclusion of a dues program?

I value your insights and experiences.