Declining Alumni Giving: What’s happening? Why is it happening? And, what can we do about it?

Angela White, Senior Consultant and CEO, Johnson, Grossnickle and Associates, Inc.
Angela White, Senior Consultant and CEO, Johnson, Grossnickle and Associates, Inc.

In a new Giving USA Spotlight entitled “The Next Generation of Alumni Giving,” the Council of Alumni Association Executives (CAAE) sponsored a comprehensive view of alumni giving, written and researched by the Indiana University Lilly Family School of Philanthropy. The findings are paramount to understanding the decline in alumni participation rates and, most importantly, how we can reverse this trend for the future.

What’s happening?
Each year the Giving USA: The Annual Report on Philanthropy consistently shows that giving to education is a priority in our nation, second only to giving to religion. Yet alumni giving participation rates have been declining in recent years across both precollege and higher education alma maters. In research by the Council for Advancement and Support of Education (CASE) and the Council for Aid to Education (CAE), alumni participation rates are dropping while average alumni gifts are increasing. Interestingly, precollege institutions are seeing higher alumni participation rates than are institutions of higher education.

However, after years of decline, alumni participation at higher education institutions appears to be on the rebound. The new study also points out that higher education institutions with the highest campaign goal amounts in 2013 (> or = $1 billion) have the highest alumni participation rates in the campaign at 24% compared with those institutions that had lower campaign goals (< $50 million) who had just 1% alumni participation in the campaign. Precollege institutions also report declining alumni participation in campaigns, showing an average decrease from 21% in 2005 to 10.5% in 2013.

Why is it happening?
There are several reasons posed for the trend of decreasing alumni participation rates. The first reason is simply better tracking. Through the advanced use of technology, institutions are better equipped to track alumni and thus the lower participation rates might be partially attributable to the use of better and more complete data.

Secondly, the rise of family foundations and donor advised funds may be skewing the alumni participation data because these gifts are counted as organizational gifts, not personal gifts, for reporting purposes. This is important to consider as alumni are using these giving vehicles with more frequency.

Finally, it is posed that the turbulence of the alumni experience on campuses in the 1960s and a lessened respect for authority might have a role to play in the decreasing alumni participation rates. The decreases began to occur at approximately the same time that these alumni reached their early 60s which could be considered their optimal giving years and anecdotal evidence exists that there may be a connection between their educational experience in the 1960s and giving today.

What can we do about it?
Engage, communicate, and invest! The engagement of students before they become alumni has proven to enhance alumni engagement. Specifically, students’ involvement in extracurricular activities is correlated to higher alumni participation rates and higher giving.

The need for strong alumni communication also stands out as an important factor. Research shows that those alumni who are more informed about their institution give more than those who are not as well informed. However, it is critical to understand and utilize their preferred communication methods (online, social media, etc.). And, investment in alumni activities by the institution increases the likelihood of alumni giving. It is important to consider the investment in the alumni experience beyond reunions and events to student mentoring, career placement, governing and advisory board service, to name a few.

The full Giving USA Spotlight on the next generation of alumni giving provides very important context for the current trends in alumni giving, excellent data on respective types of institutions and their alumni giving trends, as well as provides thought provoking ideas for deepening alumni engagement at all levels. I highly recommend this issue as important reading for all of us working in the field of education.

This article originally appeared on the Johnson, Grossnickle and Associates website.