alumni futures

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.

Campus Presidents & the Economy: Alumni Communications

With the hard economic times headlining the news pages and broadcasts each day, campus CEOs are sending a variety of messages to their campuses, to alumni and to donors.

• President Ruth Simmons wrote a screen and a half about Brown University's steps to address budget difficulty, citing "the strength, integrity, and character of the Brown community."
• University of Virginia leader John T. Casteen III wrote a very long message, requiring 1,700 words (more than a full day's output for participants in National Novel Writing Month).
• Penn State University leader Graham Spanier sent a lengthy kind of Frequently Asked Questions list, with seven questions and answers.

Among the many others addressing these issues are Lafayette College president Daniel Weiss, Bowdoin College president Larry Mills and Duke University president Richard Brodhead.

Over at College Web Editor, Karine Joly wrote about Wesleyan University's Securing the Future site, which has included a video update from school president Michael S. Roth. President Roth is noteworthy for his own presidential blog, Roth on Wesleyan.

Meanwhile, the Association of American Universities' Public Affairs Network circulated a preliminary compilation of some members' presidential messages in mid-November:

To communicate to the public how our universities are coping with the economic crisis in such areas as financial aid, budget cuts, and capital projects...AAU would like to post on our website the letters and other communications that presidents and chancellors or other university officials have issued on this subject over the past several weeks...

Here are a few:

• Cornell University
• Harvard University
• Massachusetts Institute of Technology (MIT)
• Rutgers, The State University of New Jersey
• University of Kansas
• University of Michigan
• University of California (statewide system) [48kb PDF]
• Washington University in St. Louis
• University of Pennsylvania
• Emory University

These kinds of messages will continue on for months (and, likely, for years) to come. It is a graduate thesis waiting to be written: how campus CEOs communicated with constituents in these difficult times. While there are basic elements that they all share, are there lessons to be learned from examining the differences among them? And how do we know if they are accomplishing something?

Finally, here is a seven-minute video from the Chronicle of Higher Education, where the presidents of four private US institutions (Ursinus College; College of St. Benedict; Birmingham Southern College; and Wittenberg University) discuss how the economy is affecting their campuses, what they're doing about it, and how they're communicating.

Let's hope the coming year is kinder to higher ed than appears likely as of now. I'll add one more posting in a few days, before taking a break for the holidays.

Photo of money by Andy Shaindlin

02138 Not a Brand After All, Just a Zip Code

Back in May, I blogged here about the likely outcome of Manhattan Media's purchase of Harvard-related not-quite-an-alumni-magazine-but-really-more-of-a-brand 02138. According to the NY Times, the publisher had "visions of expanding it into social networking and event sponsorship, and then duplicating the operation for each Ivy league school."

This just in: that vision lasted 22 weeks. According to Media Week,

Manhattan Media, which bought Harvard grad-aimed magazine 02138 with the intention of relaunching it in December and increasing its frequency, announced today it would instead fold the lifestyle pub, citing the softening economic environment.

The company's CEO used some classic B-school jargon to justify the decision to shut down the magazine:

While Manhattan Media, and its financial backer Isis Venture Partners, are committed to long-term growth capital, the funds needed to execute our strategic vision would by necessity have grown significantly and beyond the company's risk/return profile.

Translation: This turned out to be a waste of money.

Why? For one thing, the magazine has insufficient relevance, and does not fill a need or solve a problem for Harvard alumni. As an aside, in an attempt to be hip 02138 uses a lot of four-letter words (in addition to "Yale").

Bottom line — as I said in May — "Harvard alumni have been doing OK overall for about 350 years. 02138 needs Harvard, but Harvard doesn't need 02138." QED.

[Updated with additional coverage:]

Chronicle of Higher Ed

Harvard Crimson

Yale Daily News

Alumni Program Grant for CASE Europe

[Updated 6 October, 2008 with listing of upcoming CASE Europe Alumni Relations conferences - see bottom of this posting]

According to the September, 2008 CASE BriefCASE e-newsletter,

CASE Europe has received a program grant from the European Commission to exchange and promote best practices among alumni organizations based in Spain, Italy, Austria and Germany.

The Alumni Go Europe program was awarded an €18,000 grant (US$25,000) from the EC in support of lifelong learning through the Grundtvig program. The initiative is designed to strengthen European involvement in adult education and lifelong learning. Programs include partnerships and training opportunities for adult education organizations, teachers and learners.

The Grundtvig program, by the way, is part of the European Commission's Lifelong Learning Programme, which "supports education and training across Europe [and] provides funding for all stages of lifelong learning; for activities at school, at college, at university, in the workplace and in the community."

The CASE item concludes,

Alumni Go Europe will bring together colleagues to "explore and compare the landscape of alumni organizations and develop new ideas about the services these organizations can offer," says Kate Hunter, executive director for CASE Europe. "It's also an excellent opportunity for us at CASE to help extend professional networks across the continent."

This is pretty vague, but the e-newsletter item was just meant to be a quick notice, not a detailed program description.

It's good for CASE to be on the European Commission's radar screen, even though that also means there's bound to be red-tape, panels of experts, and lots of "consensus building."

As for "extending professional networks," that's not the same as offering workshops and conferences. CASE should not only educate professionals and connect them to one another, but continue to reach out to national governments and to individual institutions. And to other organizations. For example the European Association for International Education (EAIE) is quietly but consistently exploring alumni relations programming and training as well and might benefit from a Continental connection with CASE Europe.

Meanwhile, to learn more about global issues in higher education policy and management, be sure to read two excellent blogs: GlobalHigherEd and Eric Beerkens' blog.

[Updated 6 October, 2008: Here are three upcoming alumni relations conferences presented by CASE Europe]

An Introduction to Alumni Relations
27 January, 2009

CASE Europe Schools Conference
8-10 March, 2009

Alumni Relations Master Class
20 March, 2009

Harvard's Endowment, Spending Policies, and Alumni Engagement

Harvard alumna Carroll Bogert is associate director of Human Rights Watch, and a member of Harvard's class of '83. In a May 25 op-ed piece in the New York Times ("Enjoy the Reunion. Skip the Check."), Bogert states that Harvard University (Massachusetts, USA), with its disproportionately large endowment, needs to revamp its spending practices to match its aggressive investment policies.

This argument is increasingly common now, as the public (including lawmakers) questions why schools with multi-billion dollar endowments continue to ask alumni for gifts. Many small donors feel, as Bogert points out, that the university can do without their modest contributions. So as I read the piece, I thought it was going to be about Harvard's finances.

But Bogert's specific complaint is actually about Harvard president Drew Gilpin Faust's unwillingness to meet with a group of alumni who want to fund higher education in Africa:

A few hundred alumni have formed Harvard Alumni for Social Action [HASA], to try to channel 25th-reunion giving to destitute universities in Africa. In three years, we’ve raised $425,000 — a lot for the University of Dar es Salaam but hardly a match for our annual class “gift.” And evidently not enough to win the respect of President Faust, who has begged off meeting the group. Harvard clearly doesn’t like any effort that might divert a dollar away from its Cambridge coffers.

As a special interest group, HASA is dedicated to a specific cause. The money raised for the University of Dar es Salaam is noteworthy, and could obviously make a real difference to that institution. But why use sarcastic quotation marks around "gift"? When alumni give money, it's a gift. Every alumnus is free to decline to give when asked. Alumni can even ask to be removed from solicitation lists. But very few do.

Bogert says that Faust's failure to meet with the group means Faust doesn't "respect" them. This sounds passive-aggressive; there are many "respectable" groups that college presidents don't meet with, for a variety of reasons. Having said this, and assuming it's true that Faust won't meet, I am curious to know Faust's specific reason in this case. It seems like a reasonable expectation on the part of HASA leaders to speak officially with the president.

One more thing about respect, though. Bogert says she'd "have to be drunk" to "fall for" fundraisers' appeals. Her fellow alumni have elected to fund - at extraordinary levels - their alma mater. But she's sober, and they're metaphorically drunk? That shows disrespect. And anyway, she's a fundraiser too.

You have to give Bogert credit though: equating a popular complaint (Harvard is too rich) with a noble cause (Dar es Salaam is too poor) is a neat public relations maneuver. Getting it into the Sunday NY Times is fancier still. Maybe the Harvard question and the Dar es Salaam question are related, and maybe they aren't. I'm not really sure. But either way, a lot more people are talking about those causes this weekend. That's probably good.

Bogert claims to be surprised that "Harvard clearly doesn't like any effort that might divert a dollar away from its Cambridge coffers." Why should Harvard like it? Harvard, like any big organization, is in business to stay in business. You don't get a $30 billion endowment by turning down donations. You can turn Bogert's complaint around and say that "HASA doesn't like any effort that might divert a Harvard alum's dollar away from Dar es Salaam." You couldn't blame Bogert if she made that claim on HASA's behalf; she can't be surprised that Harvard wants to keep its alumni donations.

Finally, Bogert hypothesizes as to why alumni continue to donate (dare I say "give"?) to Harvard, when the school doesn't currently need the money. Donations, she says, are driven by:

• "the unparalleled networking opportunity that alumni events represent";
• Harvard grads' fear that legacy applicants won't gain admission if their parents don't give; and
• tradition.

To this last point, she asks :

...would universities still go to the trouble of organizing reunions if they didn’t make a gigantic amount of money from them? We can all enjoy the get-together, even if the university’s message today seems wildly off-kilter: Open your wallets, graying nostalgics, it’s reunion season! And suspend the critical thinking we taught you here, way back when.

She's right to ask about why reunions exist. Alumni relations is a building block of fundraising. But she is still conflating endowment payout policies with annual giving procedures. I am guessing that the "gigantic amount of money" Harvard has currently comes more from endowment income than from reunion classes' gifts.

As for critical thinking, Bogert should realize that while the University sounds hypocritical, so do some of its alumni. They decry Harvard's efforts to raise money, while they themselves benefit from the reputation, the visibility and the name-brand that fundraising enables and sustains.

But alumni of a prominent institution owe it to the school, to themselves and to society to use that institution's name for good, if they can. Raising money for African education is a worthwhile goal and Bogert is right about one other thing: Harvard is sitting on "a gargantuan pile of cash" which continues to grow, and a "new financial model" is at the very least a reasonable proposal.

Bottom line: Bogert's piece isn't really about endowment. But all the same, Harvard will benefit in the long run from engaging with this group on terms that both organizations can support. Bogert and HASA should be commended for asking tough questions about Harvard's finances. If they can manage to ask those questions without resorting to antagonistic sarcasm, they might even start getting some answers.

Enjoy the Reunion. Skip the Check.

Harvard Alumni for Social Action

Wall St. Journal: College Endowment Tax Idea