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Themselves to Blame?

July 12, 2011

CHICAGO -- The ever-so-modest increase in contributions to colleges (0.5 percent) from 2009 to 2010 was cheered by many fund-raisers, since it represented much better news than the 11.9 percent decline from the year before. But at a presentation here at the annual gathering of senior fund-raising officials of the Council for Advancement and Support for Education, speakers suggested that alumni giving rates are not going to rebound -- and that a big reason why can be found in young alumni, and in the strategies colleges use to woo them.

The speakers analyzed data from Blackbaud, a software company that works with colleges on fund-raising, and that conducts annual analyses of fund-raising trends in various groups of colleges, including those in the Big Ten and Big 12 athletic conferences (groups dominated by large public institutions) as well as a sampling of private colleges, mostly in New England.

The data suggest that younger alumni are giving at lower rates, and are more difficult to retain as donors -- even when compared to those who graduated just a decade earlier.

Among the Big Ten/Big 12 group, only 4.1 percent of alumni who graduated 2000-2009 gave in 2010, compared to 6.3 percent who graduated in 1990-99. (They do not yet have data tracking the older alumni cohort's giving in the initial years after graduation, but other research suggests that those rates were higher than the new cohort.) Giving rates were higher among the private college group studied, but still showed a decline among recent alumni: 17 percent for the most recent decade and 18.8 percent for the '90s graduates.

One of the reasons development experts focus on young alumni is the belief that giving patterns need to be established early, but the Blackbaud data suggest that most of those alumni who do give don't do so the next year. Only 42 percent of those who graduated in the last decade in the Big Ten/Big 12 group did so, and only 48 percent in the private college group did so.

If the fund-raisers here expected to get a sympathetic explanation of the psychological reasons the latest generation of college grads won't make gifts, they were surprised. Instead, they were told that they weren't asking enough of young alumni.

"We are under-asking" young alumni, said Shaun Keister, an annual giving consultant for Campbell & Company. Colleges seem content to ask young alumni to give $10, and assume that's all that is possible, when those same young alumni are letting Greenpeace or other groups automatically bill them $20 a month on their credit cards. Not to mention, he said, that the young alumni spend $10 a day at Starbucks.

Keister said that the $10 ask is insulting to the alumni. "You tell them that with $10 they have changed the college and changed the world, and they know better. If you did a focus group and asked them how much it would take to make a difference at your college, they would tell you $500,,,, If we ask them for $10, they aren't going to keep giving and it's not going to get larger."

A key reason that colleges focus on small gifts from young alumni is that one part (admittedly a small part at 5 percent) of the U.S. News & World Report methodology for ranking colleges is the alumni giving rate. That rate would credit a college more for getting a bunch of $10 donors than identifying and winning over those capable of giving more.

"One of the single biggest mistakes we make," Keister said, is trying to raise the rate for the purpose of magazine rankings. "We are doing so much more harm than good," he said. "The long-term viability of our programs will not be predicated on participation rates produced for a magazine."

Keister acknowledged that his views might not go over well with others, saying, "I know some presidents might throw things at me" for suggesting ignoring a rankings criterion. (The presidents at the CASE meeting must have skipped this session, as Keister emerged unscathed, but the nods of those in the packed audience suggested that the fund-raisers agreed with his analysis of their bosses.)

Jenny Cooke, director of higher education benchmarking for Target Analytics (part of Blackbaud), noted that the analysis shows that many more young alumni are giving at least one in five years (as opposed to every year). "These are not your loyal donors," she said. "They are one and done."

She stressed the importance of constant outreach to make this group more loyal. Even for modest gifts, "this generation wants to be thanked a lot more," Cooke said.

Keister added that fund-raisers need to consider the habits of younger alumni, and to adjust strategies. For instance, some fund-raisers worry that asking for money too many times during a year will offend a would-be donor. But Keister said it was important to remember that many young alumni "don't read their mail," and don't have the same sense of obligation as older alumni to see what alma mater has sent. "You can solicit them much more and you won't get a high complaint level," he said. But to be effective, colleges need to consider whether missives may be more effective digitally or in other methods, he added.

 

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