Friend-raising and Fund-raising by the Numbers

By Ron Babuka posted 02-21-2020 11:18 AM

  

Engaging with students and alumni to create future donors is a critical mission for colleges and universities.    As the numbers that follow show, being able to engage and develop graduates into alumnus that will support their alma mater involves more today than ever before.  The need to collect parent ->  applicant –>  student ->alumni data, to analyze and develop strategies based on data, to create custom journeys utilizing relevant and current technology work hand in hand with one-on-one personal engagement to help ensure higher education’s long-term sustainability.

 

The statistical commentaries provided below comes from “The Alumni Engagement Playbook : How to Foster Lifelong Relationships with your Graduates” by SignalVine in conjunction with Alice Anne Bailey, Phd.  

 

There is an ever growing financial stress on colleges and universities, with alumni donations seen as one of the few ways to bridge the gap.

  • Roughly 30 percent of small, private colleges operated with deficits in the 2016-2017 fiscal year (in contrast to 13 percent of large comprehensive universities),  and 57 percent did not grow revenue enough over the past decade to keep up with the 3 percent inflation rate in higher education.
  • Alumni donations now compose an average of 25 percent of total private gifts to colleges and universities, and they make up 3 percent of all incoming funds at public, four-year institutions and 12 percent at four-year private, nonprofits in 2015-2016.
  • The U.S. 2017 Tax Cuts and Jobs Act, which eliminated the incentive for middle class earners to itemize deductions. As a result, it is imperative that institutions work to raise participation rates in order to increase private gift revenue and remain competitive in university rankings, which take alumni donations into account.

There is greater competition for a smaller number of donors.

  • U.S. application rates in the have decreased by 11 percent since 2011.
  • The average percentage of alumni who donated to their alma mater has steadily declined over recent years, down from 12 percent in 2017 to 8 percent in 2017.
  • While the wealthiest universities increased gift revenue by 22 percent from 2012 to 2016, those with the greatest financial need increased private giving by just 4 percent in the same time period.

Alumni do not blindly support their alma mater, the cause of support has to be cultivated and grown when they are students.  The relationship must be maintained as alumni.

  • Volunteering for the institution, furthermore, is the strongest indicator of alumni identity. Initially asking alumni to contribute their time rather than their money can create a relationship that will lead to financial donations later (75 percent of those who volunteer eventually donate).
  • Research has found that only 40 percent of graduates of four-year institutions strongly agree that their education was worth the cost.
  • A whopping 87 percent of alumni relations professionals feel that they need to improve engagement with their members, and 70 percent report that member engagement is their highest priority goal.
  • The odds of being psychologically attached to one’s alma mater are 6.2 times higher if a student feels that their “professors care about me as a person” and 4.1 times higher they “had a mentor who encouraged me.
  • In fact, the odds of being emotionally attached to one’s alma mater are 2.7 times higher if a student is “extremely active in extracurricular activities. Involved students are also more inclined to donate as alumni.
  • Research that shows that graduates who open and read alumni publications are more likely to donate. However, the content must be relevant and useful. Seventy-two percent of donors report that they would stop giving to a charity if its social media and e-newsletter content was “poor” (i.e., vague, irrelevant, or dull).

Alumni relations staff are being asked to do more with less resources.  New strategies and technology needs to bridge the gap.

  • 64 percent of alumni offices state that being understaffed is either very or somewhat concerning to their daily operations.
  • 73 percent of alumni relations professionals state that they need to improve how they use technology to interact with alumni.
  • Alumni relations professionals found that 24 percent feel they are doing a poor job in attracting and engaging young alumni, 63 percent state that they need to do more, and only 13 percent feel they are doing well in connecting with recent graduates.

The same strategies for reaching young alumnis are not the same for yesterdays alumni.

  • In the past year, fundraising from a mobile device increased 205 percent, and 49 percent of all mobile giving occurred in response to text links.
  • Research shows that 98 percent of all text messages are read, as compared to just 20 percent of all emails. While an email is typically responded to within 90 minutes of being opened and read, texts are responded to within 90 seconds.
  • Thirty-seven percent of alumni say they prefer receiving information from their alma mater via periodic text messaging, as compared to 28 percent via a mobile app, 19 percent via website, and 3 percent via Facebook messaging. Yet only 6.5 percent of alumni relations staff report using SMS text messages to communicate with alumni.
  • Research has found one way to engage young alumni is to use a crowdfunding model in which nonprofits strive for smaller individual amounts from a larger number of donors. Companies like Kickstarter and GoFundMe have grown in popularity as technology makes it easier to reach large numbers of people quickly and easily. Young alumni are experienced with and often prefer to give in this manner. They are also interested in pooling their small donations for a specific, meaningful purpose, such as improvements to a campus structure that holds particular importance to certain class years or social groups.
  • Eighty percent of alumni professionals report that digital content such as blogs, social media, and e-newsletters have “significant impact” or “some impact” on alumni engagement, with only 2 percent reporting they have “no impact.” In fact, emerging research shows that digital interaction with alumni via e-newsletters and social media can have the same level of impact on alumni engagement as face-to-face events do.
  • Texting with alumni requires both personal and automated approaches. While bots can reduce workload, they do not create relationships with alumni. In the private industry, 52 percent of customers get frustrated when they are not able to communicate with a real person.

 

The process of developing a student and transitioning them into a donor is a long-hual process.   A process that can be maximized by understanding the alumni and donor habits through understanding global and local trends.   This is done through industry analysis and meaningful discussions with the student and alumni.  It is an constantly changing process that needs to be modified for each new generation of students and alumni.

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03-05-2020 09:48 AM

Very Insightful Summary!

Wow - this post sure underscores the critical challenges faced by all of us in Higher Ed - and the need to create and foster relationships at every stage of student journey. We do outreach to our graduating students to encourage them to join our Alumni organizations while they are still students, but could do a much better job at nurturing their continued involvement in their early stages of Alumni life.

02-28-2020 07:24 AM

It's all about engagement!

Ron, thanks for sharing this. For me this demonstrates that the cycle of engagement never stops. It starts with someone who is a prospect for your institution, continues through the student's experience leading to graduation. And the way that person is engaged with looks different throughout the education journey.