In two recent blog posts on the Grenzebach Glier & Associates website, my colleagues Adrian Salmon and Lori Yersh highlighted key top-level trends from the Ross-CASE report, and delved into the implications of individual versus organisational support for UK universities. As Lori mentioned, the Ross-CASE report groups institutions into five categories (Fragile, Emerging, Moderate, Established, and Elite). I use the same cohort labels in this article.
The data reported in the recent Ross-CASE Survey on UK Fundraising for higher education doesn’t focus very much on alumni relations. The data around alumni programs is mostly about inputs – not outcomes. However, on a strategic level, the report can help to inform your alumni relations approach.
First, let’s look at a chart that my colleagues at GG+A compiled using data from the Ross-CASE report. It shows Total Advancement Cost per Alumnus and Cost per Donor (click image to enlarge):
The more invested per contactable alumnus, the less expensive it becomes per acquired or retained donor.
(Source: Ross-CASE Survey 2016)
This chart shows, in pounds spent, two metrics:
- The very short, blue columns represent total spending on fundraising and on alumni relations per individual graduate, by each cohort’s member institutions. We see measurable increases from the Fragile cohort onward, and then a quite large relative leap as we move from Established to Elite institutions, as defined in the Report.
- Next, the taller gray columns show the institutional cost per donor obtained (for all kinds of donors, including alumni).
What does it tell us?
- Acquiring and retaining donors does incur a cost. How much? The mean cost across all institutions in the survey is £440 per donor, and the median is even higher, at £608. This is a very useful metric for advancement professionals checking the targets their leaders expect them to achieve, against the resources allocated to achieve them.
- Even though the more established programs are spending more on advancement per contactable alumnus of their university, their cost per donor becomes progressively lower.
In other words, as they invest more in advancement per alumnus, their fundraising efforts become more efficient.
[Alumni relations is not simply an expense, it is an investment,
because it has a long-term return]
Many institutional leaders worry about rising costs and say, “We must control spending!” Thus they limit their allocation for alumni relations staff and activities. The report shows that outlays for alumni relations at Fragile institutions amount to only 0.07 percent of total institutional expenditures. As a percentage, this is just half of what the Established institutions are investing.
As a cost-containment measure, severely curtailing alumni relations spending makes sense if spending on alumni outreach is solely an expense. But it isn’t.
When pursued with long-term outcomes in mind, alumni relations is not simply an expense, it is an investment, because it has a long-term return.
The Total Advancement Cost Per Alumnus chart above suggests that if you make false economies in fundraising and in alumni relations, and if you do not invest adequately per contactable alumnus, your fundraising becomes extremely inefficient. This is true whatever the absolute results may be.
You are, in effect, deciding to spend much more, per each pound you raise from donors.
Alumni relations in general doesn’t usually show short-term ROI (financial or otherwise) so many decision makers believe that spending on alumni outreach is a waste of scarce funds. However, investment in alumni relations moves you off the starting line for fundraising with new donors and helps you overcome the resistance that often accompanies a fledgling engagement effort.
Building new relationships doesn’t typically show immediately visible results. These come over time, and mature advancement operations show this.
What kind of return can you expect in the short run when connecting alumni to one another and to their alma maters? Well, fortunately, alumni give in other ways, and these are visible, if not easily quantifiable in monetary terms:
- Alumni who do not currently donate financially can participate by attending events, providing expertise to students and alumni, sharing access to their professional networks, and hosting or organizing alumni gatherings.
- Behavioral researchers identify reciprocity as a key ingredient for positively influencing others . People are much more likely to respond to requests of any kind from those who have already provided us with something of benefit or value. Seen this way, alumni relations is not just a counterbalance to fundraising, but a prerequisite for fundraising as well.
A word about resources: Success doesn’t require that you spend as much or hire as many staff as large alumni offices in North America. Rather, it suggests pursuing relative increases in your own efforts, compared with your historical effort.
[Any reduction in uncertainty represents a form of measurement]
Finally, I want to encourage measurement and benchmarking in alumni work. You can benchmark alumni relations, although it is a little different from tracking philanthropic gifts. Below are two approaches to consider. They are not surgical in their precision, but they may offer more insight.
- First, you can estimate alumni relations expenditure per contactable alumnus:
- Take your alumni relations budget – staff plus programs – and divide by number of contactable alumni.
- You can also estimate the number of alumni per alumni relations staff position:
- Divide the number of contactable alumni by the full-time equivalent (FTE) number of employees working on alumni relations.
- The mean in the UK appears to be approximately 16,000 alumni per alumni relations staff member. The report’s Fragile and Emerging institutions, with about 25,000 alumni per staff member between them, are operating at 50 percent more alumni per staff member than the UK mean. This is not a viable formula for long-term success.
You can track your own investment over time (internal benchmarking) as well as your efforts compared with those of peer institutions (external benchmarking).
And with all these metrics, remember this useful definition of measurement, from author Douglas Hubbard: “Measurement is any reduction in uncertainty.”
You do not need to know everything quantitatively to improve your understanding of alumni engagement. You just need to know a little more than you knew before.
I am indebted to my colleague Adrian Salmon for contributions to the insights above.