Updated 2021
This whitepaper updates The Napa Group’s regular insights on Alumni Relations and on Advancement over the past several years. Now that the intense phase of the COVID-19 pandemic is subsiding, new data can be coupled with previous trends to provide a high-level view of trends in these organizations.
As we wrote in January 2020, before the pandemic temporally disrupted higher education and society, no longer can alumni associations stake the claim of “gatekeeper” of connections between alumni and of alumni with the institution. With LinkedIn and other social media, alumni can directly connect with each other and the institution easily and efficiently. This is forcing alumni organizations and institutional “advancement” programs in general to position and articulate their unique value propositions for their alumni and their institutions in new ways…
The expectations articulated in our 2020 briefing paper are even more amplified today. Alumni have shifted their behaviors from grateful graduates to customers with expectations. The “digital first” trend accelerated by the pandemic is one of its most pervasive results, affecting relationship-building and fundraising for the entire advancement function (alumni, development and communications/marketing).
- Amazon level of personalization. “Amazon knows what I want – why doesn’t my alumni association?”
- Meaningful career resources and connections. Alumni expect to be helped to find a job as a student, and the majority of alumni surveys rank career support as the most important service young alumni want.
- Lifelong learning opportunities matched to life stages. From career-related learning to personal growth in retirement, alumni are more frequently looking to alma mater as a trusted source of ongoing education.
- Off campus opportunities to connect with alumni and engage with the institution.
- Loyalty and ROI. Valuing the “brand halo” effect from their colleges and universities, alumni in all markets are fiercely proud and loyal; yet they also feel that they spent a lot of money for their educations and expect their institutions to be both innovative and well-managed to sustain that value.
In the era of billion-dollar campaigns, meaningfully engaged alumni are required to populate the development pipeline like never before. This has led to alumni and development areas aligning and organizing in more closely linked structures to accomplish their alumni experience and fund development aspirations. This is matched by:
- Increasing demands to show return on investment through measurable alumni engagement that demonstrates actual outcomes
- Expanded attention to alumni engagement data from across campus, wherever it exists, to facilitate more meaningful and integrated tracking
- Considerably more emphasis on providing career support to students with internships, job shadow days and alumni as mentors and speakers in classrooms
The Latest Data
Here are the major trends identified in our research and other analyses.
Advancement Office Integration: In many institutions, the historic tension between traditional alumni relations and development continues. Yet, nearly three-fourths of institutions had fully integrated alumni and development operations in the 2015 VAESE Alumni Relations Benchmarking Study; since then, according to its 2020 survey, that pace has accelerated.[1] According to the same report, 55% of alumni organizations are now fully dependent on their institutions (versus their common origins as stand-alone membership organizations)[2].
A key reason this is happening is the maturation of data and analytics documenting the more complex elements of the “engagement journey” across institutions. CRM technologies and other digital tool sets are permitting customer segmentation, fostering personalization and facilitating better coordination among advancement, academic and business units.
Acceleration of digital-first practices. The remote activities of the pandemic in 2020 and 2021 have leapfrogged consumer behaviors ahead several years from pre-pandemic predictions. Digital laggards – those who were slow to embrace digital engagement, communication and shopping – have become relatively experienced practitioners. They learned quickly to go digital when that channel became the only way to stay connected and informed in a largely remote world – as well as to do business, shop, donate, attend worship services and experience museums and theater in a remote, stay-at-home, socially distanced world. According to McKinsey & Company, the U.S. is now three years ahead of where it would have been in its digital shift without the pandemic.[3]
In the process, some institutions sharpened efforts and investments in digital transformation to shape the “customer experience,” much like leading businesses have done with their “platform” models. Digital technologies facilitate a more customized tactical approach to customers as part of a larger strategy. This means understanding the “whole customer” (the strategy) and what tools (the tactics) are most important to engage them on a consistent basis. In other words, advancement officers are thinking more like marketers and adapting their tools to the alumni loyalty that is central to their programs – and the personalized ways that people want to relate to their institutions.
One result has been a hybrid unit within advancement organizations that combines “Advancement Services” with Communications and Marketing offices. Led by a position equivalent to the “Chief Digital Officer” in corporations and with a portfolio linked to both analytics and marketing, this concept embraces all the functions of the customer experience – from analytics to marketing communications using digital and offline tools, to events and stewardship.
Alumni relations pitching in to increase university enrollments. Phonathons for the annual fund and how student callers are used are experiencing makeovers. Development strategists are reorienting their scripts to assist Enrollment Management with student recruitment and retention. Ultimately this advancement-admissions partnership is directed at institutional financial sustainability, which is at risk in many places since enrollment revenues have been the mainstay of college budgets. A loss of 10 students can have a $1 million negative impact on a public university’s budget over the course of their education, for example. Foundation boards also are increasingly concerned about enrollment trends and are supporting scholarship initiatives through annual fund activities to further institutional priorities.
A corollary benefit of this approach is advancement/admissions partnership around access and equity, specifically in scholarships created for students with high financial need – and for whom $1000 or $2000 per semester may mean the difference in accepting admission or dropping out of school. The result is that annual giving includes highly visible scholarships for these students and a form of philanthropy that is attractive to many donors, especially alumni who themselves struggled financially to gain their degrees or who understand the high value of college-educated students to their local economies.
The other area – career services – has leapt ahead in importance to alumni, rising by 33% between 2015 and 2020, according to the VAESE.[4]
As stakeholders and leaders increasingly demand ROI for organizational strategies and operations, such programs have improved meaningful tracking measures, which allow them to redirect their activities for better results.
Pipeline versus participation. According to the Education Advisory Board’s (EAB) Advancement Forum, there has been a 22.5% median drop in alumni donors since 2006. As a result, development organizations are decreasing investments in alumni participation and using those budget dollars to cultivate future-potential donors.[5] This means their efforts are more targeted, using analytics tools (including social media), instituting efficiencies in development officer practices and concentrating on the higher-yield prospects.
This has led to several changes in the traditional development office, such as an enhanced focus on principal gifts – those at the top of the “donor pyramid” – and doubling managed prospects, or those with one-on-one outreach. Teams are building 1000+-person portfolios and assigned them to “digital gift officers” or “donor experience officers” and it’s paying huge dividends, Evertrue reports.[6] Other new positions are emerging, such as the strategy manager, who designs the donor plans and frees up development officers to concentrate on high-ROI interactions rather than the tedium of planning and reporting.
Social media is an increasingly core tool for multiple types of engagement activities. So are mobile apps. Only a few years ago the buzz around social media’s popularity was its impact on traditional communications tools, such as print magazines, newsletters and direct mail. In university advancement offices, social media has become so sophisticated that staff are able to target and measure posts to find and cultivate donors who in earlier years may have been identified through in-person events or readership surveys.
For example, the University of Miami’s digital engagement and philanthropic giving team look at constituents’ Facebook engagement on specific posts developed by the team – then followed up with these potential donors directly. In less than 10 months, Miami referred 7,000 newly identified prospects to gift officers, closed more than $600,000 in new gifts and generated millions in potential pipeline.[7]
During Covid-19, the University of Virginia (UVA) was well-positioned to rapidly transition to a virtual events model with relevant and meaningful content, sustainable and consistent programming and collaboration with university partners. In the first 40 days of virtual engagement, UVA’s Office of Engagement planned 41 events for over 14,000 registrations, which surpassed the record-setting registrations for the NCAA basketball championship in 2019. Yet that was only a toe in the water – they ended up hosting more than 600 virtual events in 2020, and in ongoing ROI analysis found that 80-85% of attendees were also donors.[8]
This is no accident at Virginia. For 10 years through this office, the university had been continuously improving its comprehensive engagement model through in-person and virtual activities and was able to quickly adapt to the new remote-only circumstances of the early pandemic. The operating structures and relationships were in place internally, including an extensive dependency on analytics to inform strategies (from CRM to a variety of engagement tools) – in effect, UVA has been using a platform approach to customer services and engagement for the development lifecycle.
New Challenges for Advancement
As Baby Boomers become less prominent in universities’ alumni and development activities, including boosterism and philanthropy, institutions must adapt like business to new generations with different behaviors and expectations.
The next generation of major gift donors is younger and accustomed to digital relationship tools. The average age of investors worth $25 million and above has dropped by 11 years – their average age in 2014 was 58, while the average age in 2019 dropped to 47, according to EAB. Younger donors, such as Millennials, are mission-driven, often fluent in philanthropy and want to be involved in making an impact; that means also scaling one-to-one relationships to align with their expectations for cultivating and managing their giving.[9] However, they are less likely to be involved in traditional membership associations, such as alumni associations.[10]
We’ve said over and over again that there is “no one size fits all” in alumni relations and advancement. Consistently, the following remain among the overarching questions that face institutions seeking a forward path customized to their constituencies and built on broadly acknowledged best practices:
- How to remain a viable and relevant factor in the lives of multigenerational alumni who are driven by personalization and individual affinities?
- How to move from a high-touch, high-cost volunteer relationship model to a cost-effective tech-savvy portal driving loyalty and commitment between alumni and their institutions? We know that alumni are central to universities’ fundraising activities. In 2019, alumni gave 26% of the $46.73 billion raised by all colleges and universities in the U.S., and the number was continuing to rise, according to the Council for the Advancement and Support of Education (CASE). These did not include gifts from donor-advised funds.[11]
- How to effectively merge talents across the advancement organization – alumni, development and communications/marketing – for optimal benefits for the university, not simply for the units themselves?
- And, at the foundation, what is the optimal governance structure to meet all these demands?
The answer lies in strategically drawing on trends and best practices, as well as your institution’s profile and dynamics, to shape your organization’s best path forward.
[1] “2020 Data Shows Why Alumni Relations is Fast Becoming Subordinate to Fundraising,” Alumni Access Blog, March 18, 2020. (The topic of this blog article summarizes that tension.)
[2] “Post-Pandemic Alumni Relations: Using the 2020 VAESE Study to Prepare,” Alumni Access Blog, April 4, 2020.
[3] “How COVID-19 has pushed companies over the technology tipping point – and transformed business forever,” McKinsey & Company, Oct. 5, 2020.
[4] “The Good, the Bad and the Ugly in Alumni Relations: The VAESE Study Data,” Alumni Access Blog, March 3, 2020.
[5] “The Five Defining Challenges of the 2020s,” EAB Advancement Forum, 2020.
[6] “We’re optimistic about fundraising in 2021. Here’s why,” Evertrue Blog, Feb. 25, 2021, www.evertrue.com.
[7] Ibid.
[8] Ibid., and Napa Group Briefing – Platform Business Models: Consideration for Organizational Redesign, June 2020, www.napagroup.com
[9] “How to find the next generation of major gift donors,” EAB, 10/22/2020.
[10] “Membership Marketing Benchmarking Report,” Marketing General, Aug. 11, 2020.
[11] “Alumni Giving Increases 7 Percent to More Than $12 Billion, Study Says,” The Chronicle of Philanthropy, May 3, 2019.