July 14, 2015
Perhaps Netflix binge-watching is to blame for a new phrase running rampant through the boardrooms of higher-ed advancement offices. The streaming service just released its 3rd season of the addicting prison drama Orange is the New Black, and the antics of Piper, Red, and the rest of the ‘ole gang may be the inspiration for the philanthropic philosophy that “flat is the new up” with regards to donor participation and retention.
I’ve written before about how we need to be careful how much we sweat over the sacred alumni participation metric. Increasing class sizes and improved record keeping make up two of the holes in our “leaky bucket.” Because of this, some schools are thinking less about percentages and more about gross number of donations year to year, with less focus on constituent type.
But an ever LARGER problem is our tendency to lower expectations for giving, when instead, we should be developing strategies based on a thorough understanding of what’s causing the holes. While we MAY be willing to accept “flat” participation from year to year, we have to take a sobering look at all the other metrics that are NOT flat.
State Aide to Higher Education = DOWN
First, we need to go way back to 2007-2008 when we had a SLIGHT financial situation on Wall Street. “The Great Recession” had a paralyzing effect on higher ed as endowments dropped and state funding became more scarce than a heat and serve entrée in Red’s prison kitchen.
Now, you might hear news about states recently increasing contributions to public institutions, but that’s only a year-to-year comparison. As the above chart shows, we’re still a long way from getting back to pre-recession funding. Keep in mind, many public institutions are not development juggernauts that bring in millions of philanthropic dollars each year. When your state has always “had your back” like a reliable cellmate during recess in the prison yard, the pressure to fundraise is less daunting than what we see at many private schools.
So what happens when state funding vanishes like a piece of contraband during a cell inspection? You guessed it—the kids have to make up the difference.
College Tuition = UP
Someone has to make up for the failures of our financial system and, in this instance, it’s the students. It’s important to remember schools have cut staffing and programming, but for the sake of concentrating on the “leaks in the bucket,” we’ll stay focused on the students who will soon be alumni.
The chart above shows us that there has been nothing “flat” about the change in tuition. State schools are scrambling to fill the coffers in the wake of decreased support from the government, and the result is a dramatic change in tuition costs.
The other side of this is how dependent schools are becoming on tuition dollars as a means of operating. Certainly, there have always been schools that have a tuition-based revenue model, but what we see is a consistent spike in the amount students are expected to provide following economic recessions.
Perhaps the most troubling aspect of “Figure 7” is that the percent never returns to pre-recession levels. Since the early 2000s, students have been carrying more and more of the burden for their institution—and if you don’t think they realize this, you’re pretty out of touch with today’s students and young alumni.
Perhaps the bucket is leaking, because young alumni already feel they’ve contributed their fair share of the water.
Higher Education’s Accessibility = DOWN
The public university was once considered an opportunity for anyone to pursue higher education, but sharp increases in tuition have been pushing out low-income students at a troubling rate.
As the above figure shows, there have been dips in the college attendance rate for low-income students in the past, but the last five years have seen a steady decline during a period in history where not having a college degree is a ticket to nowhere. Between 1992 and 2004, college enrollment dropped 14% for low-income households and 6% for middle-income households. I was unable to find how these numbers have changed since 2004, but regardless, this shows us that tuition hikes have a major impact on who can attend college.
The federal government has responded by investing more heavily in grants which aim to make college more affordable. According to the Center for American Progress, the federal government has “invested $17 billion in the Pell Grant program to help make college more affordable and increase the number of students eligible; a refundable tax credit of as much as $2,500 per year for families earning up to $180,000 to help pay for college; and subsequently, an additional $36 billion in the Pell Grant program to ensure its financial stability.”
While this is a promising gesture by Washington, the sad fact is that it’s not enough. The CAM report goes on to say that “the additional investment by the federal government to low-income students has partially addressed affordability and helped fill some of the gap caused by rising tuition. However, since declining state investment—the primary driver behind the increasing net price of college—has yet to be addressed, the additional federal support does not fully address the growing need of low-income and middle-income families.”
If tuition is going to keep increasing and grants can’t adequately address financial needs, WE need to get better at fundraising to offset these costs. That means investing less in old communication and engagement strategies, and investing more in digital initiatives that engage our constituents where they’re actually living their lives.
Millennial Income = DOWN
Those of us doing social media on behalf of a brand will be happy to know that nearly 40% of millennials think more favorably of brands they see on social media.
That’s the good news… now the bad.
For the “lucky” kids that ARE able to enroll in college, the struggle is just beginning. Millennials are paying more than ever before for their college education, and they’re graduating into a workforce paying them less than any previous generation. So we convince them to enroll, charge them higher tuition when they do, hand them a diploma, usher them into a lower-paying career, and THEN we hold out our hand and tell them they owe us.
If only low earnings were the whole story, but we all know it’s not.
Student Loan Debt = UP
Earnings are low, but debt is very high. On average, millennials are tens of thousands of dollars in the hole, courtesy of student loan debt. It’s not hard to understand why so many young alumni think they’re already giving back to their alma mater by writing a check to Sallie Mae.
The government, while failing to restore state aid for higher education to pre-recession levels, is swimming in student loan profits. According to a USA Today piece, the federal government made a $41.3 billion profit off of student loans in FY13. That profit margin is second only to Exxon Mobil and Apple for tops in the nation. The Department of Education will dispute the term “profit,” but either way, students and young alumni don’t have to dig very deep to see there’s a lot more money going into the government than is coming out in the form of Pell Grants.
So what happens when young alumni are making less money and saddled with debt? That’s right, mom and dad, better make some space on your DVR, because we’re coming home!
Millennials Living at Home = UP
That’s right, folks: 30% of millennials are now moving back in with their parents. We ask for more money to enroll, which means they have to take out large loans. Then we hand them a diploma and send them into a job market that honors them with a lower income than previous generations—while they attempt to pay off the student loans they took out, which were supposed to enrich their life and deliver them a promising future.
THEN we have a student call them and ask for money as they’re forced to endure the sight of dad strolling through the kitchen in his underwear declaring, “It’s my house, I’ll dress as I please.”
It’s amazing there aren’t more holes in our bucket.
Why Flat Looks Pretty Good
So, yes, when you put it like that, remaining flat year to year probably is a “success” of sorts. But should it be the goal? If we’re truly passionate about the importance of our industry, we need to aim higher—and the only way to do that is to change our definition of communication. We can no longer be a uni-directional industry, simply preaching why you should enroll and why you must give back.
As advancement professionals, our goals must align with need. We must assume that the days of receiving state and federal government dollars are behind us and that our institutions will lean more heavily on fundraising. We need to be creative and transparent; it doesn’t help anyone to pretend that these economic conditions don’t exist.
Tapping the full potential of social and digital provides us with a fighting chance. We can offer engagement and networking opportunities that enhance our relationships with students and alumni. We can use giving days and crowdfunding to show our dedication to getting money directly into the hands of the students and future students who need it the most.
What we CANNOT do, is to continue to be an analog industry in a digital age.
Out With the Old Bucket
Our job is not getting easier, but it can be a lot more fun if we reinvent the way we approach advancement. Today, flat is the new up. Tomorrow, ONLY a 5% dip is the new up. But why is this our mindset? The students and our institutions need us to move the needle forward, not just hold it in place or limit the dropoff.
We know we’re leaking, but instead of trying to slow the drips, perhaps it’s time to buy a new bucket—one that alumni won’t want to escape.
Keith Hannon is the Associate Director for Social Media in Cornell University’s Office of Alumni Affairs & Development.
Want to find more ways to engage alumni? Check out our whitepaper, “Why Fundraisers Should Care about Involved Alumni”.
Subscribe to the EverTrue Blog
Join our community of 10,000+ nonprofit professionals getting fundraising best practices in their inboxes monthly!