alumni futures

Three Models for Alumni Membership: Pros and Cons

Paul Prewitt asked recently whether the membership dues-based association model is hurting alumni organizations, instead of helping them. Having recently stepped down from the leadership of a membership association, I exchanged some ideas with him via email. I've boiled down my thoughts to some simple pros and cons of the various association membership models.

The two alumni-centric models I mention here are 

1. The Membership Dues Model: Alumni choose to pay annual or life member dues, in exchange for a set of benefits and privileges not available to non-members.
2. The Inclusive Model: All alumni have equal access to the same set of programs and services provided by alma mater via the alumni office.
   
   There is also a fundraising-focused offshoot of this:
    
3. The Donor Benefits Model: Individuals (including non-alumni) who donate at least a specified amount of money to the institution receive exclusive benefits for their contribution.

Some Advantages of the Membership Dues Model    

• Generates revenue in the form of dues. 
• Life dues can be placed into endowment for 1) growth and 2) long-term higher return (life members pass away and no longer use benefits, but the association retains and reinvests their dues). 
• Helps you identify who really is a more active than passive supporter (ie, they bothered to join, which is a form of engagement). 
• Members feel privileged to some extent ("first class citizen").
• Places the school in front of constituents through cyclical marketing and renewal process.

Some Disadvantages of the Membership Dues Model

• Members may think that they are donating to the institution when they join an autonomous ("independent") alumni association. 
• There's overhead associated with maintaining dues programs (benefits administration, renewals, payment processing, marketing) so, generally, only larger organizations can justify the relative opportunity cost. Most small shops will do better to allocate their membership management position to events or programs instead.
• Non-members resent the paying for things they think should be free (e.g., library access, publications, discounts, merchandise...).
• Marketing can leave non-joiners with a negative feeling toward the institution.

The primary alternative to due-based associations are so-called "inclusive associations," where all alumni automatically are welcome to participate in activities without regard to having actively joined an association or other alumni organization.

Some Advantages of the Inclusive Model

• Saves on overhead of marketing and administering a separate membership and benefits program. 
• Reduced marketing and sales aspect to alumni relations.
• Helps creates the impression that the association has something of relevance to all alumni.

Some Disadvantages of the Inclusive Model

• Alumni are not aware of the alumni association (or, they're not aware of their "membership" in it).
• All benefits potentially accrue to all alumni, which is a cost ineffective way to model service and product delivery. 
• Removes a potentially significant revenue stream from the balance sheet.

In our brief exchange, Paul also mentioned an off-shoot of the dues model, the Donor Benefits Model. This is a system where benefits accrue to individuals who contribute to the institution above a specified financial threshold. 

Some Advantages of the Donor Benefits Model

• Allows you to identify, cultivate, steward and reward those who support the institution financially. 
• Helps identify prospects for future giving, increased giving, and more diversified giving.
• Can generate attention and gifts from people who otherwise wouldn't bother (for example, they like having access to the institution's president or senior administrators and professors).
• Creates a framework for "more equal than others" outreach, which reinforces the culture of giving at higher levels (e.g., travel programs for President's Circle).

Some Disadvantages of the Donor Benefits Model

• Alienates people who feel their non-financial contributions (e.g., career expertise, volunteer time at events, service on boards) is not valued at same level or in the same way as financial donations.
• Reinforces stereotype that only people who give money are "important" to the school.
• Distracts people from seeing relative value of volunteerism, and may discourage people from engaging non-financially. 

Additional Thoughts

I think that many alumni offices tend to program for a mythical average alumnus who, all things being equal, is 1) interested in alma mater, 2) prepared to engage or join, and 3) willing to donate. 

But there is no such thing as the "average alumnus." The fact is that the vast majority of alumni 1) don't have an active interest in the school, 2) don't join local or comprehensive alumni groups, and 3) don't contribute financially. 

Some associations are already programming more for the minority of alumni who are predisposed toward engagement, while largely ignoring the rest of the constituents. Of course, there will be periodic efforts to attract newly-interested or available alumni as volunteers and donors as well, but alumni who have exhibited low or no engagement over some length of time will be dropped from mailing and invitation lists. 

Bottom Line

Dues-based associations are not "bad" for alumni relations. So long as an association has the scale to justify the overhead cost, dues structures are still justified. But to thrive, membership associations must deliver real benefits that people truly need or want, and that they cannot get elsewhere.

Photo of a members only chair at the Royal & Ancient Golf Club, St. Andrews, Scotland, from Flickr member Son of Groucho via Creative Commons.

Alumni Affinity Credit Card Update

Last week the popular Huffington Post initiated a campaign urging readers to have their college and university alumni associations disclose their affinity credit card agreements. HuffPo, as it is known, mentioned that the Credit Card Accountability Responsibility and Disclosure Act of 2009 requires these groups to explain certain aspects of their card contracts.

Huffington also provided a sample letter, and instructions for how to be "polite but persistent" in your query to the university or its alumni group.

As a follow up, CASE's Director of Government Relations & Institutionally Related Foundations, Brian Flahaven, circulated some information highlighting key aspects of the legislation (which is known by its clever acronym: the Credit CARD Act...get it? Credit Card? Credit CARD?).

According to Flahaven, disclosure obligations vary, depending on the kind of "alumni group" involved. 

I'll quote Brian's note at length, since his explanation is detailed and clear:

Alumni Associations Not Separate From Institution
The law requires institutions of higher education to "publicly disclose any contract or other agreement made with a card issuer or creditor for the purpose of marketing a credit card." This means that alumni associations that are not separate from their colleges and universities will now have to disclose all affinity credit card marketing agreements. Final regulations released by the Federal Reserve Board indicate that institutions can meet this requirement by posting the contract or agreement on [their] Web site or by making it available upon request.

Alumni Associations Organized as Separate 501(c)3 Organizations
The law requires credit card companies to disclose any marketing agreements with institutions of higher education, alumni associations and affiliated foundations under which credit cards are issued to college students. This means that any card agreement where a student has been issued a card would be subject to disclosure by the credit card company, not the alumni association. Final regulations released by the Federal Reserve Board...

...Clarify that "an agreement may qualify as a college credit card agreement even if marketing of cards under the agreement is targeted at alumni, faculty, staff and other non-student consumers, as long as cards may also be issued to students in connection with the agreement."

...Define college student broadly. The definition includes students of any age attending an institution of higher education and applies to students enrolled in graduate or joint degree programs.

Finally, Flahaven provides additional links as resources:

• The section of the Credit CARD Act of 2009 affecting alumni association affinity credit card programs [may require CASE member log in]
  

and

• Section of the Federal Reserve Board's final regulations on the Credit CARD Act of 2009 affecting alumni association affinity credit card programs. [333kb PDF]

Brian closes with this advice: "If you receive a request for a copy of your association's affinity credit card agreement, we encourage you to review the law with your legal counsel to determine your disclosure requirements." 

I would say, even if you don't receive a request for a copy of the agreement, go ahead and review the law with general counsel. You should know your legal obligations.

Contact Brian Flahaven at CASE directly with your questions:

telephone: 202/478-5617 or 

email: flahaven@case.org .

Photo of credit card by Ed Ivanushkin via Creative Commons. 

Alumni Magazines: Online Questions, Part II

In the last post, I listed three key issues that alumni publications would have to address while exploring online options: 

1. the delivery format selected, 
2. the accessibility of popular content (which raises privacy issues), and 
3. cost.

These are not the only issues they face, and the comments to my last post contain excellent points for all to consider. But I'll use the three points I made originally as a starting point for discussing some ways to move forward.

Delivery Format
For now, to go portable, alumni magazine publishers must choose between 

• a standalone program (an "app") and
• a mobile-optimized web site (although some may choose both). 

Some apps are certainly popular, but for this use they may not be effective. Before an alumnus sees content via your app, he must visit the online app store, download the app, and launch it to read your content. These are far from insurmountable barriers, but they are barriers to participation nonetheless. 

Meanwhile, mobile-optimized web sites will face the same challenges as traditional web sites: generating traffic, and then generating repeat visits (ideally by inducing alumni to subscribe to updates, as one does with podcasts, for example). Mobile sites that simply load standard versions of web page frustrate their readers with tiny print, links that are too small to "click" with your finger, and microscopic images. For these sites, "optimized" is not a good description. 

Furthermore, web developers who hitched their wagon to Adobe Flash will have to unhitch it and pair up with a different protocol (such as HTML5) if they want to be seen on the iPad. Apple's new device doesn't support the Flash format (which Apple CEO Steve Jobs called a "waning" technology).

Access to Popular Content (and related privacy questions)
Brown University is the alma mater of Brent Grinna, whose blog I quoted last week – and it's my alma mater too. Brown recently put class notes and obituaries behind a log in on its alumni magazine web site. I do read these items in the printed publication every time it arrives (it's an outstanding magazine, by the way). But personally, I wouldn't log in to read class notes and obits online unless the print version went away completely. Even then I would probably not click through; a log in, though critical from a privacy viewpoint, is an one obstacle too many for readers like me; I consume alumni content when it's relevant and convenient – not merely because it's relevant. 

For comparison purposes, the majority of the Ivy Plus Group's ten schools' web sites seem to require a log in to read class notes. Dartmouth's, Penn's, and some of Columbia's alumni notes (e.g., the School of Social Work) are unprotected. But Brown, Harvard, Princeton, Cornell, Stanford, MIT, and some of Columbia's schools (e.g., Law) require registration and a log in to read notes. Yale's online class notes, oddly, are temporarily "out of service." 

Class notes are among the most popular items in alumni magazines, in part because class notes' content is most clearly unique to the institution itself. If you believe the feature articles in alumni magazines, every school has earnest students and alumni out to change the world, top-rank researchers pushing the frontiers of science, and bold, visionary leadership ensuring the future of the institution with the latest capital campaign. But only one college or university has your classmates' and school friends' personal updates. 

Because of privacy concerns, the online version of this popular feature requires readers to do something they've never had to do with print: obtain, record, and enter a username and password when they want an update. This has serious implications for readership patterns in a post iPad era; will the rest of the content be compelling enough to bring readers back, time after time? 

See links to related blog posts at the bottom of this article.

Cost
Assuming that online versions will be add-ons to printed alumni magazines for some time to come, the cost question is long-term. The additional cost of content conversion or development is a high hurdle for publishers, if their online and printed "versions" of magazines are to exist side by side. Last week I talked about the rationale for sticking with a tried and true magazine identity online, but I personally don't get excited by the online version of a printed publication – even if I like the printed version. Having online content slavishly follow a printed magazine's focus and style can prevent the risk-taking needed to invent a new way of communicating with alumni, a way that takes full advantage of new platforms' capabilities.

The Internet is not where printed content becomes immortal. It is, however, an increasingly interactive medium which points to new forms of alumni engagement.

The Bottom Line
For decades (more than a century for many), alumni magazines have trained alumni to love their printed pages and their quirky, niche content. But this content by itself won't drive more than a tiny fraction of alumni to consume it online as well. For better or worse, it will have to assume the interactive, dynamic and fast-changing form that more well-funded publications are already pushing to readers on new platforms and new devices. And that will come at a high financial cost, which means that advancement shops will have to find support from outside the existing print publication budget. 

How is your institution supporting innovation and funding in the magazine business? 

Leave a comment.

***

In a future post I'll look at Brown University's foray into iPhone applications via EverTrue Mobile.

Previous Alumni Futures posts on related topics:

Alumni Magazines: "Be Read or Don't Bother"

Status Updates: The New Class Notes

A Few Mobile Format Alumni Magazines & Student Newspapers:

Harvard Magazine

BYU Universe

Rochester Review

June 11 Deadline to Apply for CASE Conference Scholarships

CASE is offering about 20 scholarships to cover conference registration fees for advancement professionals at selected CASE programs.

The Virginia Carter Smith Scholarship Program is for you if you have less than three years' experience in educational advancement, or if you've moved from one advancement discipline to another in the last three years (e.g., from alumni relations to development). Among the criteria for awarding the scholarships are "career potential," an applicant's statement about resources available through their institution, and the candidate's "ability to express him or herself."

If selected to receive a scholarship, you will have conference registration fees waived, but will still have to cover, travel, hotel and meal costs to attend. Conferences NOT covered by the Smith Scholarship are the Summer Institutes, the Summit, or the annual District conferences. But that still leaves you with many options from the CASE professional development calendar.

Get your application started, though: the deadline for scholarship applications is Friday, June 11, 2010.

Click this link to download the application packet from the CASE web site [180kb PDF]

And in case you're wondering, Virginia Carter Smith was a CASE president, and founder of CURRENTS Magazine. 

Other CASE scholarships:

International Scholarships Programme (for global access to advancement training)

SimpsonScarborough Scholars (for young communications and marketing professionals)

Peter Buchanan ASAP Scholarship Award (for student advancement programming)

Good luck!

CAE: 2009 Saw Drop in Giving to U.S. Higher Education

This is the time of year when the Council for Aid to Education (CAE) publishes its annual report on Voluntary Support of Education (VSE) – that is, financial donations to colleges and universities in the United States.

According to a New York Times article about the CAE's survey, 

Gifts to colleges and universities declined almost 12 percent in the 2009 fiscal year, to $27.85 billion...the steepest decline in the survey's 53-year history.

The article goes on to state that

• private liberal arts colleges saw the largest decline (18.3%);
  
• capital gifts (for endowment or buildings and property) dropped 25%;
• the last decade has seen an average 4.1% overall increase in giving each year.

Here are past Alumni Futures postings on this survey since 2007:

2007: Alumni Dollars Are Up, Participation Is Down (Again)

2008: CAE: Alumni Participation and Dollars Both Declined in 2007

2009: I did not report on the CAE survey last year, but here is a statement from CASE about the survey's results.

Here is the Chronicle of Higher Education's report on today's announcement of survey results.

How Advancement Will Change After the Recession: 4 Questions

At the recent CASE Board meeting Paul Sheff, chair of the Commission on Philanthropy (and chair-elect of the CASE Board) shared a set of questions he developed in collaboration with CASE staff. I thought the document was thought-provoking, and worth sharing more broadly.

Share your own questions (or answers to these questions) by leaving a comment.

1. If necessity is the mother of invention, what did we invent during the past year in response to the economic downturn that might remain in place when our institutions’ finances return to “normal”?

2. What have we learned about measuring and demonstrating the importance of advancement to our institutions, defining our messages, and communicating with and engaging our constituents? Which of these lessons will translate to our work in better economic times?
  
3. What have we learned about collaboration across our traditional disciplines (alumni relations, communications, development and marketing), staffing (number of staff required and deployment of staff), organizational structures and management in general? 

4. What – if anything – should CASE be doing now to develop content and services for members in the post‐recession workplace? What should be at the top of the list? 

Special thanks to Paul Sheff (president of Catholic Memorial School in Massachusetts) and to CASE's Rae Goldsmith for encouraging me to share these questions with Alumni Futures' readers.

Image of the plight of bananas during a recession from Flickr user Colin White, via Creative Commons.

Antioch Update: Alumni to Buy College

Quick update to the Antioch story. 

The University has agreed to transfer ownership of the campus to a group of alumni who hope to re-open the school in a couple of years. However, many hurdles remain before the financially troubled institution can be revived – not least of which is the school's run-down physical condition, as well as legal and financial steps involving bond holders and the Ohio state Attorney General's office.

These links provide background and updates:

Chronicle of Higher Ed: Update on Antioch

New York Times: Alumni Group to Buy College

Inside Higher Ed: A Deal to Revive Antioch

Prior coverage from Alumni Futures:

Antioch Alumni and the "Angry Wake"

Antioch College Will Close As Previously Planned

Antioch's Second Chance? Alumni Step Up

University of Colorado: Mandatory Student Fee for Alumni Dues

On June 8, the Chronicle of Higher Education [subscription required] carried a story about plans at the University of Colorado to implement a new funding scheme to support alumni activities. 

Starting with this fall's freshman class, the university system's alumni association will be requiring students to pay a lifetime-membership fee of $70 when they enroll. Under the association's previous model, [alumni] were asked for $45 annually only after they graduated. 

The story is quite brief and doesn't clearly explain how administrators arrived at this model. Obviously, charging students one more fee, using existing billing and payment systems, is an easy way to generate cash without the overhead of a dues program. Collecting association dues ordinarily requires staff members to track annual payments, generate renewal notices, and monitor the administration of benefits.

The alumni association's interim director, Ron Stump is quoted as saying that "students can know they won't be solicited for the rest of their lives." Maybe, but this assumes that it would ever occur to a student that they'd have to pay dues in the first place. I'm not sure it will feel like a favor when the fee gets tagged on to the tuition, the room, and the board plan. Most students may not even know they've "joined" anything – because they haven't.

Also, most students and many alumni don't know the difference between an alumni association and a development office or foundation. So there's some chance that alumni who thought they wouldn't be solicited "for the rest of their lives" may be confused (or even resentful) when they are asked to donate to the university later on.

Stump meanwhile says that the alumni association will work with the career center on campus "to help place students in jobs and internships with alumni." That's good, but that's also something every association should try to do, regardless of dues structure. 

100% of the money will go to the association, and they can increase the amount in future years. So how much cash are we talking about? According to the school's web site, in 2007, 5,555 first year undergraduates enrolled. Under the new scheme, the association would garner almost $390,000 in "dues" with that size freshman class. 

On its way to the bank, the association should be careful not to think they've solved the alumni network problem. They'll have generated cash flow, which is no mean feat in days of disappearing affinity revenues and shrinking support from general budgets and investment income. But I would dispute the claim by a student leader who says that this approach "builds a community." He further explains, 

When you're setting foot on this campus, you're part of a huge alumni network. We're all Buffaloes together.

Every large institution has "a huge alumni network." What matters isn't whether it exists. What matters is whether alumni can activate the network and access its resources to fulfill their needs and solve their problems. And it takes more than dues money to accomplish that.

I'm curious to hear others' thoughts about this approach to funding alumni activities. Do the pros outweigh the cons?

University of Colorado Alumni Membership page

Anonymous Donations: Should We Care About the Source?

Two weeks ago I submitted a topic to the CASE Group discussions on the LinkedIn web site [free registration required]. I am posting an updated version of my question here to generate additional discussion.

Anonymous Donations: Anyone concerned about the source of the funds?:

There has been ample news coverage recently about a series of anonymous donations to US colleges and universities, totaling some $80 million so far. The gifts come with the stipulation that the receiving institution must not attempt to identify the source of the gifts, or the donations may be rescinded.

Should the receiving institutions have concerns about accepting donations of this size without any information about the donor, business or enterprise that generated the funds? I can imagine a circumstance in which an institution later wishes it were not linked to the donor or his/her line of business. 

In reply, Judy Piercey (University of California - San Diego) quoted an article in which her UCSD colleague Juli Larsen (Associate Vice Chancellor of Development) commented about having been approached with a similar offer: 

As a public institution, we do have very stringent rules on gift acceptance. The only way we were willing to enter into this discussion was if the bank itself...was willing to verify [that] the source of the funds was legal and attest in writing to the legitimacy of the donor and the donor's intent.

As it happened, that donor did not make the donation, but the point, said Larsen, is that 

This was definitely new territory. It was frustrating....Our work is about trying to connect donors with our people and programs. So obviously we want to meet these [donors].

What do you think? Should we be grateful for any large donation in tough economic times, or should we be suspicious (or at least, extra curious) about large gifts from donors who don't want anyone to know who they are?

Additional coverage of the topic from Inside Higher Ed:

http://www.insidehighered.com/news/2009/05/08/donor 

Credit Card Transparency: U.S. Legislation May Affect Alumni Affinity Contracts

[Updated 28 May, 2009: The Credit Card Act of 2009 (H.R. 627) has been signed into law, and includes disclosure requirements for alumni association affinity credit card contracts. The language, according to CASE, is identical to the language mentioned in my original post below, and requires credit card companies to disclose marketing agreements with alumni associations and affiliated foundations. The agreements covered are any of the agreements where a student has been issued a card, regardless of whether cards are marketed to students.

The disclosure requirement says that U.S. institutions of higher education must

publicly disclose any contract or other agreement made with a card issuer or creditor for the purpose of marketing a credit card.

While it doesn't mention alumni associations per se, the breadth of the language will likely make all or almost all marketing agreements subject to disclosure.

Thanks to CASE's Brain Flahaven for keeping us all updated.]

CASE's director of government and foundation relations, Brian Flahaven, recently circulated an update on legislation introduced by two US congressmen. According to Brian,

...the Student Credit Card Transparency Act of 2009...would require credit card companies to disclose to Congress their contracts, terms and agreements on affinity credit card programs with colleges, universities and alumni associations. 

Although focused on schools marketing credit cards to students, the bill's broad language might require credit card companies to disclose all their agreements with colleges and universities. 

If you're at a US alumni association with an affinity credit card program, how might this affect you? CASE believes that the legislation, if voted into law, might result in unintended, but negative, consequences.

Brian adds that it's unclear when Congress might take up the bill for discussion or vote. And the Senate is working on its own version of related legislation, and CASE will let us know if any language from the House bill mentioned above makes it into the Senate's final product.

Have an opinion or concern about the pros or cons of these proposed laws? Have anything to share about the changing role of alumni affinity agreements? Share your feedback in a comment.  

Meanwhile, CASE has a web page for monitoring legislation and regulations that may affect higher education advancement:

CASE Legislative & Regulatory Affairs page

Also check out the CASE Issues Watch

Note that I'll be taking a break from blogging for a couple of weeks. See you late in May.