Even as the MBA job market rebounds, many business schools seeking donations from young alumni aren’t feeling the love.
Young MBA alums, defined as those who graduated less than 10 years ago, are giving less and less often compared with older alums. As giving habits change, giving rates among the new generation of B-school graduates are declining, says Shaun Keister, a fundraising consultant with Campbell & Co. This is important, because philanthropic habits develop early in life and become more prevalent as alumni grow older.
“Alumni who don’t give [now] won’t wake up in 20 years and want to give,” he says.
The average participation rate for business school graduates from 2000 to 2009 was 20.5 percent, compared with an average of 22.9 percent for the classes from 1950 to 1999. This is according to 2011 data on donor transactions at 10 U.S. business schools compiled by Blackbaud, a software and service provider for nonprofits.
Schools with low giving rates among young alumni now may find that in a few decades, their older alums will have low giving rates as well. It’s not all doom and gloom, though. Three schools have figured out strategies, from small steps to big initiatives, to engage young alumni and motivate them to donate. Officials at the University of Virginia Darden School of Business, Dartmouth College Tuck School of Business and Cornell University Johnson Graduate School of Management shared some successes with Bloomberg Businessweek on how they’re bucking the trend.
Capitalize on a Captive Audience
Dave Celone, director of development and annual giving at Tuck, has a saying that goes like this: “Treat students like alumni, and treat alumni like students.”
Tuck, a legend in alumni giving, has a young alumni giving rate that regularly exceeds 90 percent. The class of 2007 had a giving rate of 99 percent its first year after graduation, Celone says. As a cohort, the classes of 2000 and on have had the highest participation rate of any group of classes. His secret is the Tuck Annual Giving Student Advisory Board, formed in 2004. The board consists of current students who educate their peers about the role of Tuck in their lives and the importance of giving. Students use Facebook messages and host Sunday brunches with alumni who can talk about philanthropy. They send exam survival kits with packets of vitamin C, candy bars, and good luck notes, forging bonds with students that they hope will result in donations after graduation. They host “Tuck ‘Tail” events, or cocktail parties, for the same reason.
“These are things we’d never dream up, but students understand themselves and come up with ideas that have had an impact very quickly,” Celone says.
Get Alumni Involved
Alumni affairs officers at Johnson recognized that the connections between classmates would help foster philanthropy outreach after graduation. In 2009, the school began a class agent program that asks selected alumni to hit up about 25 classmates a year for contributions. The agents work with other alums who collect life updates for the alumni magazine and plan reunions. After implementing the class agent program, the rate of giving for the class of 2009 increased to 16 percent from 12 percent, says Kristen Burke, associate director of the class agent program. The strategy worked in classes of older alumni as well. Giving for the class of 1999 jumped from 20 percent to 27 percent after appointing a class agent.
Agents serve a five-year term. Both current students and alumni apply and are appointed to the positions. The agents are being implemented in about 30 classes.
To be successful, B-school alumni giving campaigns need to meet alumni on their own turf. For example, while direct mail solicitations may be an effective way to communicate with older alumni, they do a poor job of reminding younger alums of the connections they had with their school, say alumni affairs officers at Darden, Tuck, and Johnson. To be effective, all three say communication with younger alumni needs to be through e-mail, social media websites, and cell phones.
Instead of waiting five years for the first reunion, Darden reminds young alumni of their connection to the school through one-year reunions, two-year career check-ins, and section giving competitions. The introduction of one-year reunions coincided with an increase in participating alumni of 13 percentage points, from 39 percent in 2009 to 52 percent in 2010, says Trip Davis, president of the Darden School Foundation and senior associate dean for external relations. Participation increased 10 points for the class of 1994 after the introduction of a section competition pitting class sections against each other in a fund-raising contest.
Ask for More
Cornell asks students to give $100, more than most B-school alumni giving campaigns suggest but still a manageable amount for many young MBA alums with jobs.
“We’ve learned over the years when people make a gift at a little higher level, $100 vs. $20, it’s a more meaningful gift that shows they believe in the institution and mission,” says Burke.
Cornell was able to raise $2.5 million in the annual fund drive in part because the average amount of young alumni giving increased, she says. In 2010, young alumni gave $258,244; in 2011 they gave $286,991, an 11 percent increase. The next two giving challenges will also set $100 as the suggested amount for young alumni or alumni considered non-donors, she says.