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Increasing Alumni Participation in Annual Giving is Still a Great Idea (But Not Because of Rankings)

Increasing Alumni Participation in Annual Giving is Still a Great Idea (But Not Because of Rankings)

In a press release on May 19, 2023, U.S. News & World Report (USNWR) announced fundamental changes to the components of its ever popular (and rightly disparaged) “Best Colleges” rankings. Unveiling these adjustments, U.S. News stated that the 2024 Best Colleges methodology will include: 

  • Increased weighting on a school’s success in graduating students from different backgrounds; and 
  • Removal of the following factors as ranking indicators: alumni giving, faculty with terminal degree, class size, and high school standing. (These factors will be included in school profiles and comparison tools for students.) 

I emphasized “alumni giving” in that second bullet, because it has long been one of the least understood – and most overrated – components of this particular rankings scheme.  

How Alumni Giving Has Factored into Ranking  

As consultants who specialize in alumni engagement and higher education fundraising, we at GG+A often encounter senior development leaders and university presidents who ask, “How can we increase the percentage of undergraduate alumni who make annual gifts?”  

A leading rationale for this goal in years past? Improving their institution’s U.S. News ranking.  

At its heart, alumni annual giving matters because of one word: pipeline.  

But there was always a fundamental misunderstanding at the heart of this ambition. A higher ranking might benefit an institution in public opinion, but increased alumni participation in giving was never going to improve that ranking. Why? Because this component of the overall formula for determining a school’s rank was just 3% of the overall total score. (For many years, it had been 5%, which still had a negligible influence on the institution’s final spot in the league tables). What’s more, this calculation was not based on the most recent year’s data; rather, it was a trailing average of the last two years. 

Despite their efforts, very few institutions have found ways to increase the percentage of alumni donors in recent years. At best, they have only been able to slow the decline in undergraduate alumni participation. That decline is a national phenomenon, whose downward trend has been well-documented via the annual report on Voluntary Support of Education (VSE).   

According to data from the Council for Advancement and Support of Education (CASE), ten years ago, the percentage of alumni making a gift of any size to their alma mater was 8.7% (combined average for public and private institutions). In 2022, the national participation rate had dropped to about 5.6%.  

 

Even if an institution somehow increased its alumni participation, it was likely to be ranked close to other institutions that were deploying the same strategies and tactics – so any positive achievement was usually offset by the efforts of so-called competitors. The net result was that focusing on annual giving might help their fundraising results, but it didn’t improve their U.S. News ranking at all.  

In 2013, I conducted an analysis of these figures for my employer, a top research university. In partnership with the university’s Office of Institutional Research, we examined how much annual giving would have to increase to make a measurable impact on the institution’s U.S. News ranking. The result showed that annual giving participation would need to increase by 10 percentage points to make up half the difference in the score between this institution and its next higher-ranked competitor at the time. An increase of that size is unheard of for any major private research university and would have represented a net increase of 40% in alumni participation. In other words, even an impossible 40% net increase in alumni participation would yield zero difference in the institution’s USNWR ranking. 

For this reason, leaders concerned with the rankings have been well-advised to focus their efforts on outcomes that they have a greater ability to improve, and which have a bigger impact than alumni participation on their overall ranking (for example, educational outcomes, such as the six-year graduation rate for undergraduates). 

The Real Value of Increasing Alumni Engagement 

With U.S. News’ recent announcement, it is a relief to see this red herring removed from the list of drivers of annual giving. However, there is still a fundamental reason to address alumni giving, and to keep it high on the list of fundraising priorities. This reason has nothing to do with rankings, but it’s one we’ll continue to emphasize with our clients. 

At its heart, alumni annual giving matters because of one word: pipeline.  

Ruffalo Noel Levitz, a leading international provider of expertise in student enrollment, estimates that fewer than one in 10 major gift donors give big with their first gift, and most of them begin their philanthropic giving to their alma mater at relatively small gift levels.  

While the majority of annual donors – giving a few dozen or a few hundred dollars in the decade following their graduation – will never become major or principal gift prospects, the few who will become prominent donors later have two important characteristics: 

  • Their relative impact on their alma mater’s fundraising will be critical to the school’s overall fundraising success in the future; and
     
  • There is no way to know for certain, early on, which of the lower-level donors will become the most generous alumni in decades to come. 

Of course, there’s the influence of social proof: if many alumni donate each year, it is more likely that others will do so, too, seeing this as accepted, expected, or “correct” behavior. A single small donation may not seem like much in the context of a multimillion- (or multibillion)-dollar campaign. But many such gifts together combine to create visible impact and to make a difference that matters.  

With this in mind, we will still help advancement teams to generate alumni engagement (including event participation and volunteerism) that correlates with philanthropy at every level, and to focus on year-over-year donor retention. And we’ll do it because it will help ensure the growth and health of their alumni giving and pave the way for greater philanthropy. 

Andrew (Andy) Shaindlin, Vice President, has more than 30 years of experience in alumni relations, advancement, and annual giving in higher education. His expertise includes alumni engagement , strategic planning, volunteer and board development, and engagement metrics. For guidance in how to strengthen your alumni engagement initiatives, contact Andy at ashaindlin@grenzglier.com. 

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About the author

Andrew Shaindlin

Vice President

Andrew (Andy) Shaindlin, Vice President, brings to GG+A over 30 years of experience in alumni relations, advancement and annual giving in higher education. His expertise includes engagement best practices, strategic planning, volunteer and board development, and alumni governance. Having previously worked at GG+A from 2015-2018, Andy has consulted for dozens…

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