By Devin Mathias of member firm Marts & Lundy
Three simple words, so many problems.
When you first hear these words many things may come to mind – US News & World Report, Annual Giving, Impossible Metric, etc.
Alumni participation is a misguided metric for development’s broad-based fundraising. Annual giving leaders and experts across the globe have known and discussed this for years. While alumni participation can provide your institution a bit of context for some of your fundraising efforts, such as reunions, student fundraising and event-based fundraising, it is detrimental to let alumni participation serve as your primary annual giving metric.
Why is alumni participation so bad that I consider it the “bane of annual giving metrics?” Focusing on alumni participation pushes an annual giving program in the wrong direction. For the purpose of this post, I will assume you want the following from your annual giving program:
- A pipeline of donors for leadership annual giving and, in turn, major giving
- A broad-based approach to fundraising
- Increased revenue from the appeals
If you focus on alumni participation, none of these goals are truly met, with the possible exception of the second bullet point. In fact, alumni participation provides motivation to stall the pipeline and focus on gifts of any size, rather than increasing gift revenue, so as to increase the number of donors.
This focus also provides motivation to “lose” or, maybe more accurately, “not find” alumni who you’ve lost track of over the years. This helps lower the denominator in the “alumni donors” divided by “total alumni” equation. It also, sadly, provides incentive to fudge the numbers, as many of us have seen and the Wall Street Journal has highlighted.
So what should you be focused on when measuring annual giving? Two primary metrics can help you meet the goals above and focus your resources more effectively:
1) Total donors
2) Donor counts by gift bands ($1-$100, $101-250, $251-$500, etc.)
Focusing on total donors broadens the base of your donor pyramid, provides incentive to find lost alumni and ensures that you give appropriate attention to acquiring new donors. It also lets you focus on constituencies beyond alumni. Community members, faculty & staff, and student families (not just parents) are just some examples of other revenue streams.
Emphasizing these donor counts in the various gift bands – which, like the definition of a “major gift” will vary for institutions – provides a reliable metric to illustrate whether or not your program is successfully moving donors through the gift pipeline towards greater support, while simultaneously tracking that you are replacing those you move to a new level.
What does this mean relative to a president who views the relatively low-weighted (5%) alumni participation as a way to boost an institution’s US News & World Report ranking? Maybe nothing. Very few of the US News factors seem “easy” to move, so many often hone in on alumni participation.
It should, however, be a reality check for your development program and how it measures annual giving.