The latest data from 2020 VAESE Alumni Relations Benchmarking Study shows alumni and development operations becoming more integrated. The study also reveals the degree to which integration is taking a toll on alumni engagement, and how alumni relations professionals are being increasingly measured by fundraising goals rather than engagement metrics.
About a 5 minute read
I’ve long voiced my concerns about the increasing assimilation of alumni relations and fundraising operations in higher education. I see nothing inherently wrong with the integration of alumni and development. I'm all for breaking down silos. But I do have serious concerns when alumni relations functions become ignored in lieu of fundraising objectives.
The statistics we've gathered from our recent study reveal some unhealthy trends, as it appears alumni relations professionals are having a hard time finding the time to focus on building lifelong relationships. That's because they are often being pulled in the direction of performing fundraising tasks instead.
I recognize that some institutions are just a major donor away from significant budget cuts, massive layoffs, or even bankruptcy. But for everyone else, what is driving this insatiable demand to squeeze every last dime out of your alumni, and ignore the cultivation and stewardship aspects of the fundraising process?
It’s a crisis in the making.
According to Jim Langley, President at Langley Innovations, and former VP of Advancement at Georgetown University, “The U.S. has lost 20 million giving households over a 16 year period - a 13 percent drop - something that never happened since we’ve been able to measure charitable giving. The consequences of aggressive, shortsighted fundraising are catching up with us and will continue to do so. We must adopt more sensible, sustainable practices.
The Survey Says...
Let's start with data showing the increasing trend toward full integration of alumni relations and development/fundraising functions.
Since our VAESE study in 2015, the data shows:
- 62 percent of respondents report that their alumni and development operations are fully integrated. 11 percent are in the process of integrating.
- The number of alumni organizations that have integrated with their fundraising/development operation has jumped 20 percent since 2017.
The new 2020 data also suggests integration is happening at a very fast pace:
- Among NCAA Division 1 schools that are not affiliated with a large power conference (i.e. the Power 5 Conferences), the percentage of alumni organizations that have integrated with fundraising/development has jumped 44 percent since 2017.
When it comes to the number of alumni relations staff, their numbers seem to be diminishing, leaving fewer alumni personnel to accomplish the daunting task of engaging more and more alumni.
- The number of FTE's dedicated to alumni relations has dropped 18 percent since 2017.
- Since 2015, 72 percent of alumni organizations report the number of FTEs has decreased or remained stagnant.
As more and more institutions adopt integration, it seems there are fewer alumni relations staff to defend their engagement priorities. As the immediate demands for cash supersede the long term goals of cultivating alumni, the call for fundraising restraint is likely to get drowned out.
But, if you're one of those intrepid alumni relations professionals who's willing to make a stand for more restraint, here’s some ammunition to help you make your case:
The 4-Rs of Fundraising/Development
After the 2017 VEASE study, I wrote about my fears relating to the integration of alumni and fundraising. I was criticized for lacking enough evidence to show that the priorities of the fundraising operation were superseding those of alumni relations. In all fairness, maybe there wasn’t enough evidence to reach my conclusions at that time, but the evidence appeared to be trending in that direction.
The new VAESE study data is providing increasing evidence of this phenomenon and appears to be confirming my fears that alumni relations is fast becoming subordinate to development.
When I talk to alumni and advancement teams, I will often cite a classic CASE article that teaches newcomers about the fundamentals of fundraising. This article talks about donor cultivation and references the ‘4-Rs” of fundraising/development: Research, Romance, Request, and Recognition. Of the four phases, it suggests that 60 percent of the fundraising process should be spent on romancing prospects. Or in other words, cultivating and building relationships with alumni to engage them over their lifetime.
To illustrate how drastically institutions have shifted away from the 4-Rs approach, I like to measure the degree to which new graduates are solicited. This practice serves as a barometer of sorts, measuring an institution’s willingness to embrace a “relationships-be-damned” approach to fundraising.
The latest data shows:
- The average number of gift solicitations sent to first-year graduates has increased 3.7 to 3.9 solicitations per institution since 2017.
- The number of schools that send five or more gift solicitations to new graduates during their first year is up 55 percent from 2015.
- 46 percent of participating institutions report soliciting first-year graduates ten or more times during that first year of graduation.
- 15 percent of these institutions send twenty or more solicitations to new grads during the first year.
If the best practice is to “romance” alumni long before you make a “request”, why are 78 percent of institutions soliciting their first-year graduates? Especially when you consider many of these new graduates are just launching their professional careers, and have barely moved out of the dorms or their parent’s basement. And that says nothing about soliciting graduates who have an average student loan balance of $38,792. Or that roughly 39 percent of student borrowers are expected to default on their loans by 2023.
What adds insult to injury is how alumni professionals are increasingly placed in a difficult position of choosing between cultivation and fundraising tasks. They must choose between sending an engaging email to their alums, or soliciting alumni for everything from the annual fund to the capital campaign.
Yes, I know the annual fund has long been the domain of some alumni offices. And I know alumni associations solicit new members to join the alumni association. What I'm talking about is the practice of re-prioritizing alumni professionals so their success is measured by the funds they raise, rather than by engagement metrics. For many alumni professionals, fundraising is their most pressing goal. The survey reveals that trend.
We asked alumni professionals, what is your alumni organization’s top goal for next year. While the most popular answer was to "boost alumni engagement, the second most popular answer was to “Increase donor revenue,” and that response jumped 183 percent from 2017.
We also asked alumni professionals if they were "unexpectedly allowed to hire a new FTE, what would be the primary role of the new hire?" Would they hire a social media specialist? An events specialist? A volunteer coordinator?
The top answer was “Fundraiser,” and the number of institutions answering similarly jumped 45 percent since 2017.
Is it any wonder that alumni professionals are feeling conflicted about what their role is under the advancement umbrella. Is their priority to engage and cultivate alumni, or are they just the fundraiser's second string? The second team to come off the bench and maintain the fundraising momentum?
We asked alumni professionals what caused them the most anxiety about their job, 73 percent stated they were "very" or "somewhat" concerned about not having enough staff to complete necessary tasks." While this stat alone isn't a smoking gun, it's at least illustrative of the increasing conflict they face while working in an integrated advancement office.
However misguided it is to bombard new graduates with gift solicitations that first year, it’s only symptomatic of a larger problem. When advancement officers are less concerned about developing relationships, and more focused on raising money at the expense of building relationships, how can an alumni relations program thrive in such a toxic environment?
What is it going to take to change the status quo?
Who is going to make it stop?
The answer is… your alumni will make it stop. They’ll put a stop to the aggressive over-soliciting by demanding they be placed on the “Do Not Solicit” or “Do Not Contact” list. And the new VAESE study reveals this trend:
- Since 2015, alumni organizations have experienced a 15 percent increase in the number of alumni who have asked to be put on the “do-not-contact” or “do-not-solicit” list (referred to as “opting out” of contact with their alma mater. Otherwise known as the “churn rate.”)
- 46 percent of alumni organizations have at least ten percent of their alumni who have opted out of contact with their alma mater.
- The number of institutions with at least a ten percent opt-out rate has increased 79 percent since 2015.
What’s the payoff for not soliciting new grads the first year?
How about far fewer alumni opting out. For the 47 percent of schools that solicit their new graduates at least ten times during that first year, the institutional rate of opting out is double that of institutions that don’t solicit their first-year grads.
What's in it for schools that show restraint? That choose to build relationships BEFORE soliciting? Their opt out-rate is 8 percent...versus the 16 percent opt-out rate for the over-aggressive solicitors.
What is the cost of over-soliciting?
How much money are institutions losing by over-soliciting and accepting a higher opt-out rate?
Take for example an institution with 100,000 alumni, and they solicit their new grads at least ten times during the first year. Their opt-out rate will be 16 percent. That translates to 8,000 additional dissatisfied 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. Remember, when an alum opts out, it's permanent until they choose to reengage. Schools that ignore those opt-out requests face severe penalties.
If we put a dollar figure to all those alumni who opt out, the numbers are surprising.
For now, I’ll ignore the Princeton’s and Dartmouth’s of the world that enjoy a 59 percent or 43 percent alumni participation rate respectively. To make the math easier, I’ll use a 10% participation rate. Using conservative higher education giving rates with an average gift-per-contributing alumnus of $1,500.
We can do a simple calculation.
8,000 opted-out alumni X 10% giving rate = 800 lost donors
800 lost donors X $1,500 average gift = $1,200,000 lost
Although each institution’s circumstances will differ, the potential for losing a million dollars is nothing to sneeze at. And that money is vanishing unnecessarily because of a lack of discipline and foresight.
I could also point you to this research that illustrates the true cost of burning through donors and failing to properly steward those relationships. Institutions that take care of their donors and retain a high percentage of donors year over year, raising significantly more money over time than institutions that retain sixty percent of their donors. When you’re constantly having to replace disaffected donors, it becomes a very expensive process to keep up. It's a vicious cycle when you don't meet such lofty fundraising goals, as many will go out and squeeze more money from their existing contacts. It just goes downhill from there.
What would alumni organizations do if they could focus more time cultivating young alumni?
How about launching a First Year Graduate (FYG) program, similar to the one suggested by long-time alumni relations and career services expert Don Philabaum. He suggests alumni organizations should be engaged in helping new grads transition from their academic careers to their professional careers. It's much like the highly successful First-Year Experience (FYE) that helps students transition from high school to college. It’ seems like a great way to make alumni relations more relevant, and establish a relationship with young alumni that are not connected to a gift solicitation.
Alumni relations should be about preparing alumni to engage and give to their alma mater for a lifetime. But if short-term fundraising goals are allowed to supersede long-term cultivation objectives, alumni relations professionals will become irrelevant, unnecessary, and obsolete.
What are your thoughts about this new data and trends? Does any of it surprise you? Please comment below.
Or you can connect with me on LinkedIn and we can discuss it further.