Answering three questions can help alumni professionals add—or remove—fees without fear
Members of The Ohio State University Alumni Association made history in 2012. For the first time in the association's more than 130-year existence, alumni became members without paying a cent. Eighty-five percent of OSUAA members voted to cease the organization's longstanding dues program, opening nearly all of its benefits programs to the institution's more than 500,000 alumni worldwide.
OSUAA joins the University of Central Florida; Rutgers, the State University of New Jersey; and the University of Illinois on the list of alumni organizations that dropped their dues programs without encountering existential crises. Why? After the Great Recession, which prompted alumni to make stricter decisions about how to spend their money, institutions scrutinized their dues programs to determine whether charging fees for membership impeded alumni engagement and fundraising efforts.
At Ohio State, graduates don't have to pay for an alumni association membership. However, if they make a minimum $75 annual gift to any Ohio State fund, they qualify for enhanced benefits—including a print version of the alumni magazine and entry into the alumni football ticket lottery. The offer seems to work: Alumni giving to Ohio State leapt 22 percent the year after OSUAA eliminated dues.
Does this spell doomsday for dues? Not exactly. While institutions are slowly moving away from dues-based programs, there isn't a one-size-fits-all solution. Here are three major factors that influence institutions' dues decisions—and how three universities applied them to establish very different funding structures.
"Whether to charge dues or not almost always comes down to the organization's revenue, or lack thereof," says John Taylor, a North Carolina–based advancement consultant.
Dues models came into vogue in the mid-20th century when many public and private institutions had strong, separate 501(c)(3) alumni associations that operated with little or no institutional investment, says Chris Marshall, vice president of the Chicago-based fundraising consultancy Grenzebach Glier and Associates. Now, he adds, fewer than 10 can claim that level of self-sufficiency, such as the Alumni Association of the University of Michigan and Texas A&M University's Association of Former Students.
Alumni organizations and the institutions that they support are moving increasingly toward an interdependent financial model, according to a joint 2010 study by The Napa Group and Performance Enhancement Group consulting companies. In this arrangement, institutions or affiliated foundations provide the alumni association some level of funding to offset the loss of dues revenue and allow open membership for all graduates. The report cites UCF—which eliminated its dues-based membership model in 2010—as an example. The UCF Foundation now provides funding and helps run the alumni association "to minimize direct competition with fundraising, become more inclusive with the rest of the university, [and] expand foundation outreach to the entire alumni base," the Napa/PEG study says.
Fee: Alumni dues include life ($1,000 per individual) or annual ($35) memberships. Young alumni can purchase discounted life memberships ($400) within two years of graduation.
Alumni participation: Approximately 10 percent
When Frank Holmes became Sam Houston State University's vice president of university advancement in 2003, his superiors asked him to expand and enhance alumni outreach and programming. There was just one hitch.
"The reality was that no increase in institutional funds would be available," Holmes recalls. "Our revenues had to be generated by private resources."
The alumni office, which is part of the Texas university's advancement division, had always offered a dues program. But alumni didn't have to pay for many benefits, such as career services, and the dues option wasn't aggressively marketed to graduates. To expand the alumni programs, the institution needed to recruit many more than its existing 1,200 members.
During the next decade, the alumni office increased membership marketing through email and direct mail, a phonathon, ads in the university magazine, and a student alumni association and at events, such as tables at every home football game. While alumni could participate in certain programs for free, paying members received enhanced benefits, including invitations to an exclusive gala and free entry to tailgate parties.
In 10 years, membership has grown to more than 11,000 supporters, 2,200 of whom are life members. Although that number is only about 10 percent of SHSU's alumni body, Holmes is pleased with the progress. The influx of funds has helped support several projects, including a new alumni center, an increase in alumni events and meetings from 25 to 250, and growth in the office's endowment fund—from $380,000 in 2003 to $3 million in 2013.
"People support things in which they have an investment," Holmes says. "As members joined, it gave us more resources to provide better programs and communications, which stimulated our membership growth."
The dues program has also boosted development operations by highlighting which alumni are most interested in SHSU's advancement. Increases in philanthropy have correlated with alumni membership growth; in 2003 SHSU had only 3,500 donors, but in 2013 it received gifts from more than 11,000.
"A strong alumni program generates greater philanthropic support for the university," Holmes says. "Corporations and foundations are often interested in knowing the extent to which alumni give back. If an institution's alumni won't support it, why should the company?"
Is the purpose of the association to serve members as an exclusive club, asks Janis Johnson, a senior partner with the California-based consultancy The Napa Group, or does it serve all alumni?
The average alumni dues participation rate hovers around 20 percent, says GG+A's Marshall. Presidents, chancellors, and alumni directors, however, are questioning whether dues programs provide the best way to leverage the largest group of graduates. That sentiment may be the primary force driving institutions toward forms of open membership—where all graduates receive programming and services regardless of whether they pay dues or make a gift to the institution.
The challenge? Many alumni organizations are responsible for supporting annual giving initiatives and identifying potential donors among graduates. Dues programs can assist in those endeavors.
"By charging dues, you've labeled the most engaged and zealous people in your alumni population so you can target them," Marshall says. "There's a benefit to knowing who has already raised their hand to show they're engaged with your institution."
Fee: No dues. A green-level perks program is free for all graduates; gold-level enrollment, which includes enhanced benefits, is $49 per year.
Alumni participation: 2,000 enrollees in its first year
Forgive University of North Carolina at Charlotte alumni if they have a split personality. Until about 30 years ago, many North Carolinians viewed UNC Charlotte as a commuter school, and graduates had little connection to the transient campus community. Decades later, UNC Charlotte has a thriving residential student body and recently added that super glue of campus pride: a football team.
The UNC Charlotte alumni office is riding that wave of excitement and building stronger bonds between its enthusiastic campus community and its somewhat disengaged alumni body. Charging dues, however, didn't seem like a good starting point, says Lynne Wester, director of alumni programs and engagement.
UNC Charlotte has accurate records for fewer than half of its 100,000 graduates, the majority of whom live in Charlotte and its three surrounding counties. Wester has three tasks: Acquire valid information for as many graduates as possible, introduce them to today's UNC Charlotte, and increase the university's visibility within the metro area.
Enter the 49er Perks program, which provides alumni with discounts to several vendors on and around UNC Charlotte's campus. Graduates can register online as green-level members at no charge. Gold-level members pay $49 for increased benefits, including reduced prices on alumni office events, such as football tailgate parties and homecoming registration. Wester's office receives most of its funding from the university, but proceeds from the perks program are used to enhance the office's budget and support a need-based scholarship program for students.
"There are hundreds of nondues-based alumni associations out there that provide great service to their graduates," Wester says of UNC Charlotte's choice to pursue an open membership model. "We feel like engagement shouldn't come at a cost to our alumni."
So why offer the $49 option at all? First, it helps Wester identify enthusiastic graduates who may be great volunteer leaders for future alumni programs and services. Second, it shines a spotlight on potential gift targets that she can share with her development colleagues as UNC Charlotte continues to grow its advancement operation.
So far, the results look positive. As of March 1, more than 2,000 alumni had enrolled in the inaugural green and gold perks programs. Wester's already aiming for a 10 percent increase in fiscal year 2015.
If a dues structure is thriving, it's probably a sustainable enterprise. Marshall says 30 percent alumni participation is a fair benchmark, plus revenues in the hundreds of thousands or even millions of dollars for large institutions. But such cases are rare, and sometimes the numbers can be deceiving.
"I had a client that clung to a dues program that had a great participation rate," he says. "But when I dug deeper into the demographics, I found a problem. Older alumni—those who graduated in the 1970s or earlier—were participating at about 30 percent. The youngest alumni from the 2000s forward were participating at a rate of less than 2 percent. The model simply wasn't sustainable."
But even when hard numbers strongly suggest the need to eliminate a dues program, Taylor reminds his clients to remember the many graduates who have already joined.
"All of a sudden, they've paid for nothing?" he says. "It becomes a public relations issue, and you need to make plans to address that population of constituents."
OSUAA tackled that tricky situation by eliminating the life membership on the July 1, 2012, changeover date but grandfathering all benefits for graduates and other constituents who had joined prior to June 30.
Fee: Alumni dues cover life ($550 per individual) and annual ($45) memberships. Undergraduates may purchase a student life membership at a discount ($400).
Alumni participation: More than 72,000 University of Virginia graduates are active members, representing 32 percent of the institution's entire alumni body.
What makes the University of Virginia's Alumni Association membership program so successful? The vast majority—more than 90 percent—are life, not annual, members. A big reason: The alumni association has a presence at orientation and convocation, where each first-year student receives a Jefferson nickel. The nickels are funded by an endowment created by alumnus Harry Bruns to remind students of their ties to the United States' third president and the university.
"It's not like as our students walk out with diploma in hand, they're just finding out about the alumni association," says Patti Daves, director of membership, marketing, and affinity programs at the UVa Alumni Association. "We meet many of these students before they ever walk into a classroom."
Daves reports that as of early March nearly half the Class of 2017 had become student life members of the association. Student life members receive a discount on the life membership fee and can defer payments until after graduation. They immediately enjoy life membership benefits, such as bookstore discounts and invitations to special alumni events. Overall, nearly 70 percent of the alumni association's life members joined through the student membership program.
A typical devil's-advocate question: Will young alumni disengage quickly after they, or their parents, pay off their student life memberships? That hasn't been a significant problem at UVa, says Daves. Alumni association members typically make up about 50 percent of the graduates who return for the university's annual reunions.
Life members also give generously to the institution and the alumni association. Although they're not solicited for the annual fund until they've paid their memberships in full, life members provide a targeted pool for Daves and her advancement colleagues. Nearly three quarters of members have made at least one gift to the association or university beyond their membership dues. In its most recent annual fund drive, the UVa Alumni Association received gifts from 3,207 donors, 2,468 of whom are life members.
Two years ago, CURRENTS shared the University of Colorado Boulder's new approach to alumni association dues ("Increasing the Harvest"). The Forever Buffs program replaced annual and life-member dues with a one-time fee that all students pay during their first year. We checked in with the article's author—Tori Peglar, assistant director of marketing and communications—for an update on the program.
There's a renewed sense of pride. When we speak with alumni, there's no longer the guilt response: "I love Colorado, but I don't pay dues." Now our alumni are proud to identify themselves. They call and say, "Hi! I'm a Forever Buff, and I'd like to know more about the travel program." They're not just people who graduated from the university; they're part of a continuum from graduation through retirement.
A lot of what drove our dues-based organization was the membership campaign. When we eliminated those staff positions, we created new ones focused on outreach and meaningful programming for students. We're now inviting current students to participate in alumni programs. Recently, when a professor brought a group of 25 students to London for a summer program, we held a special alumni event to bring together the students and our graduates. We're hosting meetings and programs where alumni share advice about internships, graduate school, and relocation for jobs. These are things we couldn't do before.
That's kind of the golden question: If we drop our membership program, will annual fund donations increase? We haven't seen a jump in annual giving or in our recent "Creating Futures" campaign, in which alumni participation is about 7.5 percent. However, we discontinued the dues program in 2008, right when the economy was crashing, so other factors may be in play.
A major part of our new strategic plan is understanding the alumni who are participating in events and programs, and in the coming year we'll take a more sophisticated approach to tracking those numbers. What percentage of attendees used to be dues-paying members? How many are first-time participants? To date we haven't had the tools to track this, but our new constituent relationship management system will help us look at these developments.
We are seeking other sources of revenue because when we initiated the $70 Forever Buffs fee, we didn't take inflation into account. With our board of regents sensitive to the many fees that students pay, we're not inclined to increase that number right now. We have staff members in charge of business development and bringing in funding through sponsorships. We're also investigating how we might involve graduate students, who don't currently pay the Forever Buffs fee, in the program.
Nancy Mann Jackson is a freelance writer who also writes for Associations Now, AARP Bulletin, Entrepreneur, and CNNMoney.com.
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FeaturesBad at Retiring, Good at Giving From Feedback to Road Map Dues or No Dues The Editor’s Dilemma
ColumnsTalking Points: Fixing Financial Aid Office Space: Sharing the Wealth of Confidential Data Outlook: Do More with Less Odds and Ends: Generational App-titudes
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