Run Away (From Your Dues-Paying Alumni Program)

VAESE statistics show how unlikely it is to succeed with a dues-paying alumni program, unless you're at a large, Power 5 conference school. Data shows why you shouldn't start your own 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.

Let's dive into what makes 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 thrive the most in 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.

Now, let's explore these differences further.

When we surveyed alumni organizations about their membership trends, a staggering 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, only 44% shared the same positive membership growth or stability. What's even more concerning is that 47% of non-Power 5 schools reported a decline in membership rates, while 9% were uncertain about the direction of their membership trends.

The most revealing statistic that highlights the disparity between the two groups is the overall renewal rate. While every membership organization is unique in terms of acquisition, retention, and servicing costs, it is generally crucial for an alumni organization to have a minimum overall renewal rate of 60% to maintain a steady membership base year after year. Power 5 schools impressively achieve an average renewal rate of 71%, while the non-Power 5 schools fall below the sustaining average at 43%.

Clearly, there is a noticeable pattern emerging that emphasizes the challenges faced by smaller institutions when it comes to generating consistent returns on investment for their dues-paying programs.

Are you seeing a pattern here?

The bottom line is this: for most small to medium-sized alumni organizations, you’re likely to have a difficult time year after year, seeing any return on investment for your dues-paying program.

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

Why do these larger organizations excel? Undoubtedly, their consistent presence in national and local media contributes to the sustainability of Power 5 schools' membership rates. Additionally, the strong cultural bond that these institutions share with their respective communities cannot be ignored. However, the question arises: which came first, size or success?

For now, let's put aside the debate about cause and effect. Instead, let's delve into the intriguing disparities in size, budget, and staffing that exist between these organizations.

Not only do they possess a considerably larger pool of alumni, but their average budgets are on a massive scale in comparison. This allows for a greater number of full-time employees involved in all aspects of running their programs.

However, it's important to note that just as victories can boost membership rates, losses can have a negative impact on membership. Large alumni organizations often find themselves at the mercy of external forces beyond their control. Nevertheless, they have generally found ways to adapt and have become experts at engaging their alumni through their successful dues-paying programs.

If you happen to be running a successful, self-sustaining membership program at a non-Power 5 school, I commend you. Your achievements are not the norm when it comes to statistics.

Considering starting a dues program? If your institution is similar in size and exposure to a Power 5 school, proceed with caution and thoroughly evaluate the alternatives and long-term consequences. This is especially important as younger alumni are less likely to join member organizations. However, 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, run away!

Why?

Because there are more effective ways to engage and attract alumni without creating a divide between favored and less favored members. We should value the contributions of alumni in terms of their time, talent, and financial support. A dues program often prioritizes 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 data that universally supports the idea that paying dues directly causes increased giving rates. This phenomenon may not apply to other institutions, especially those outside of the Power 5 conference schools.

Here are some other issues you should consider:

• 74% of all alumni organizations report to being a non-dues-paying model. Of all alumni organizations that report to having studied the pros and cons of a dues-paying model in the past five years, only 4.3% have 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?)
• 69% of alumni associations cite their biggest challenge to growing their membership relates to the lack of value or compelling member benefits. (See our article about lame alumni benefits and not lame benefits. Are you prepared to offer benefits that can attract and engage alumni?)
• Dues-paying organizations have a 33% higher opt-out rate than non-dues paying organizations and are 63% more likely to have alumni opt-out rates 30% or higher (The average opt-out rate is 10.3% overall, and the increased number of membership solicitations may be a reason for the higher number of opt-outs).
• For Power 5 conference schools, the overall new member renewal rate is 43%. The average renewal rate for non-Power 5 schools is 17%. (New graduate renewals should not be relied on as a significant revenue source for your program?)
• 33% of alumni organizations have half their alumni living in a different state/province than the main campus. (Are you prepared to offer alumni benefits that are relevant to alumni living anywhere nationwide, and not just near campus?)
• Any membership organization must contact a member 15 times during a 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?)
• 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 continue with their dues-paying program, even if they have explored options for ending it while saving face.

These are just a few of the obstacles you may encounter if you are contemplating starting a dues-paying program.

If you are from a non-Power 5 school that has a successful dues-paying program, I would love to hear about your experiences. What advice can you offer to others?

Has your institution effectively transitioned away from a dues-paying program?

And what would you say to those who are considering launching or ending a dues program?

Your insights are invaluable.