Alumni Motivation Under the Microscope

Presented by

Ann Oleson, Chief Visionary Officer

Converge Consulting

Someone sleeping in class

Why Do We Do What We Do?

Motivation

1. The reason or reasons one has for acting or behaving in a particular way.

2. The general desire or willingness of someone to do something.

Maslow’s Hierarchy of Needs

What Motivates Your Alumni?

• The higher education fundraising marketplace

• Why we completed a lifestyle segmentation study

• The top findings from the study

• Application of findings to your alumni/donor communication strategies

Our Time Together

Changing Landscape of Fundraising

Changes in Fundraising

• Rise of the non-profits• Non-funded written marketing plans• Younger donors• Female donors• Technology

The Rise of Non-Profits

Over __________ non-profits competing for donated dollars

The 2009 report presented by the National Center for Charitable Statistics, number of 501 c 3 organizations risen 31% from 1999-2009

No Written Communications Plans

Nonprofit Marketing Guide indicates that _______% of

those interviewed had no formally approved marketing or

communications plan

Changing Face of Wealth: Younger Donors

Younger donors are becoming more significant as they take on leadership roles and assume positions of greater influence in their workplace and communities

The Center on Philanthropy at Indiana University found that those who are between the ages of 18-30 are:

More __________ing savvy and more cynical than predecessors

Less trusting

More service-driven

More interested in playing active and consequential roles in advocacy of causes that they believe in

Changing Face of Wealth: Younger Donors

2010 study by Engagement Strategies Group

Many among this generation of donors considers the cost of ______________ as well as the perceived overall wealth of the college or university that they attended to be perfectly valid reasons for lack of support

Changing Face of Wealth: Younger Donors

2009 article “Donors of the Future” by Growth Design

Holding institutions accountable for their decision-making

The timeliness of the decisions they make

Partnering and engagement opportunities they offer: expected with organizations they support

Earning power of women and ability to give increases

Significant and increasing impact of women

Women outnumber men on college campuses/across the nation

60% of all master’s degrees awarded in the 2008-2009 academic year went to women

30% increase of women with college degrees since the late 1970’s

2008 Center for Educational Statistics

Changing Face of Wealth: Women

Current IRS “Personal Wealth Tables”

__________% of nation’s top wealth holders (those with assets exceeding 1.5 million) are women

Women have moved from “influencer” role to:

• Significant force • Established professionals who are

financially independent and who offer support and resources ON THEIR OWN TERMS.

• Viewing giving as Millennials: focused on supporting issues that impact the world

• Inclined to focus efforts and resources on helping other

• Disposed to giving in relational ways through personal involvement in activities

Changing Face of Wealth: Women

Influence of Technology

Most critical factor that successful fundraisers will need tomorrow

___________% of U.S. population now connected via the internet

Digital media is critical: few fundraisers have embraced social media, mobile applications, and other online spaces as communication vehicles

Use to:

Inform thinking

Shape fundraising strategies

Measure success of online initiatives

Photo of all alums from one pager

Who are your alumni?What do you know about them?

Meet Jennifer

• 35 years old• Vice-President of Sales • Student Government

Officer • Honors Student: 3.9

GPA• Full pay student• Not engaged with her

college

Meet Jennifer

• Future leader of her company• Married to an attorney• HHI Volunteer of the year• Gives 10% of income to charity• Engaged with 3 networking groups• Serves on a number of community

boards• Has great feelings towards her

college but not engaged• Will inherit significant family

wealth Gets 50 pieces of mail every week from non-profits

• No home phone number• Has never been asked to engage

Meet Jennifer

Just because Jennifer is able to give does not mean she is motivated to give.

How do we understand who Jennifer is, what she cares about, and how to reach her?

• Develop a motivationally-based segmentation model

• Uncover the motivations that drive the different types of relationships

• Prioritize which alumni segments provide the best opportunities for colleges

• Provide recommendations regarding how these different alumni segments should be managed to optimize their individual likelihood of donating

• Develop a predictive model and applied tool to classify alumni into segments based on a minimum number of questions

Research Objectives

Segmentation Method and Analysis

A Motivational Segmentation of College Alumni

Lifestyle Segmentation Research

“Nowhere in the field of mass communication research has the concept of `lifestyle' been so prominently and fruitfully used as in the field of marketing communication, where it has been shown that lifestyles influence both consumption patterns and the processing of different forms of marketing communication. Therefore, the lifestyle concept has become the core of a special kind of segmentation research called `psychographics'. This psychographic or lifestyle research usually takes as its point of departure extensive and ad hoc AIO (activities, interests and opinions) surveys, which then lead to often very colourful and useful lifestyle typologies using the technique of cluster analysis.”

From: Lifestyle Segmentation: From Attitudes, Interests and Opinions, to Values, Aesthetic Styles, Life Visions and Media Preferences

Patrick Vyncke, Ghent University, Department of Communication Sciences, Universiteitstraat 8, 9000 Gent, Belgium,

Secondary Research

Over 250 research articles concerning college donating and charitable giving were reviewed to identify current issues, trends, and alumni motivations.

– The following variables were identified in the literature and provided guidance for the questionnaire design.

Questionnaire Development

• Age• Gender• Income• Marital status• Employment• Education level• Ethnicity• Religious affiliation

• Personal identification• Pride• Perceived need• Benefits from giving• Uniqueness of college• Obligation or duty• Professional benefits• Current involvement• Trust• Prioritization• Recognition• Gratitude

• Type of college• College prestige• Professors• Campus/facilities• Activities• Grades• Time to graduation• Tuition• Scholarships/grants• Family legacy• Academic major• Residence• Placement• Student loan balance• Social experience

Demographics College Experience College Relationship

• Personal values• Religious values• Political orientation• Tax benefits• Networking• Life satisfaction• Perceived need

Charitable Giving

Who answered the questionnaire?• 2,050 college alumni participated in a web-based survey during July, 2011.• Participation criteria were established to correspond with known college

population estimates.– Female: 56%– Advanced Degrees: 31%– Institutional Type: 65% Public– Married: 59%– Employment Status: 25% Retired– Ethnicity: 87% White/Caucasian– Average Household Income: $74,285 – Religious Orientation: 67% Christian

• Sample estimates across numerous variables of interest in this research are consistent with statistics found in the US Census or other published surveys.– These findings provide us with confidence that inferences drawn in this sample are

valid for the overall college alumni population.

Sample Characteristics

A Priori Segmentation

A priori segments are usually based on college major or demographic variables. However, such descriptive variables are known for being poor predictors of behavior.

Does he donate because he is a

man?Does she donate

because she is over 65?

Does he donate because he majored

in History?

Do they donate because they are married?

Segmentation Alternatives

Tailor Strategies to What Motivates Alumni

Colleges using post hoc segmentation develop strategies specific to the motivations of their alumni segments. Fundraising programs become more successful because they target what motivates different groups of alumni.

CollegeFundraising

Program

Don’t forget who helped you along!

We’ll put your name on a brick!

You are invited to…

Gratitude

Recognition

Privileges

DifferentMessages

Hypothetical Alumni

Segments

Segmentation Alternatives

• Insert slide from page 3 of white paper segmentation measures

• Insert slide from page 4 of white paper graph

Persona Development

The national study identified three segments of alumni respondents that vary significantly in terms of their attitudes and motivations associated with giving to their alma maters:• Champions• Friends• Acquaintances

Pull image from page 5 of the white paper

Major Differences Among Segments

• Average income between three persona groups varies by less than $8,000

• Champions are the only segment with a male majority

• Friends are the most philanthropic segment, overall

• Champions give in the highest amounts among those who donate

Major Differences Among Segments

• Champions have given the most in the last five years

• 49% of Champions have never given• 56% of Friends have never given• 86% of Acquaintances have never given

Motivation to Give

• Champions are motivated by giving opportunities that allow them to have their names visibly associated with their donations

• Friends would rather receive a personal “thank you” note from a dean or faculty member and want to make a significant impact on the world

• Acquaintances are not likely to be motivated to give or engage

Summary of Findings

Implications– Colleges are better at managing relationships with ___________ than

they are with _____________. – Colleges ineffectively manage the _______________ segment.– Colleges spend as much money contacting Acquaintances as they do

either Champions or Friends. This is a waste of scarce resources that would be better spent enhancing programs targeting other segments.

Summary of Findings If Institutions can cultivate relationships with Champions and Friends, they could then realize:

1. Additional prospects for major gift solicitations/planned giving

2. Additional opportunities to increase annual fund participation rates

3. Additional understanding of Alumni Association and how/why alums engage

Identifying Acquaintances can help institutions reallocate resources more effectively

Overall impact = Smart Marketing (Better ROI, Better Results)

SEGMENT PROFILESA First Glance

Sample Size = 708 Note: Alumni who only donated in 2011 are excluded in order to provide complete years.

Average Annual College Donations 2006 – 2010(among alumni who donated)

Champions Friends Acquaintances $-

$50

$100

$150

$200

$250

$300

$350

$400 $354

$197

$45

Mea

n

Average Donation Size Among Donors

The average donation from Champions is over 75% greater than the average donation from Friends and over eight times larger than the average donation from Acquaintances.

Segment Profiles

Sample Size = 2050

Q56. Please estimate the total dollar amount of your donations to charitable organizations during the past year.

Champions Friends Acquaintances $-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$1,603

$2,750

$1,300

Mea

n

Total Charitable GivingFriends donate substantially more dollars to charities than Champions do. College donations are part of Friends’ giving program rather than the focus. Earning a larger share of Friends charitable giving budget could provide considerable rewards for colleges.

Segment Profiles

Sample Size = 2050

A Relationship Goes Both Ways

Champions are more likely to have a reciprocating relationship with their college where they both give and receive.

Champions Friends Acquaintances0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.53.1

2.0

1.4

Mea

n Re

spon

se

Reciprocating Relationship

Donating to my college is more important to me than donating to any other charity.

I feel like I can influence policy at my college.

I enjoy the social opportunities donating to my college provides.

Financially supporting my college is a priority to me.

I have maintained relationships with faculty from my college.

I like having others know I contribute to my college.

My college is one of my favorite charities to support.

Segment Profiles

Sample Size = 2050

The Benefits of Donating

Champions believe that donating to charities can advance their careers.

Champions Friends Acquaintances0.0

0.5

1.0

1.5

2.0

2.5

3.03.0

2.0

1.7

Mea

n Re

spon

se

• My involvement in charitable organizations may someday lead to advancement in my career.

• People I met through charitable giving have turned out to be helpful in my career.

• Making new business contacts is a strong benefit from charitable giving.

• My employer expects me to donate time and money to charities.

• Other people will think more highly of me if I donate my time and money to charities.

Professional Benefits

Segment Profiles

Sample Size = 2050

Life is GoodFriends are very satisfied with their lives. Research finds that happy people are more confident, outwardly focused, and willing to help others.

Champions Friends Acquaintances0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

3.2

4.5

3.2

Mea

n Re

spon

se

• I am very satisfied with my life.

• My life has turned out worse than I expected. (Reversed)

Life Satisfaction

Segment Profiles

How can you classify your alumni?

Discriminant analysis was performed to find a small subset of questions that could accurately predict segment membership (predicts with 80% accuracy)

Please rate your overall level of agreement with each of the following statements Response

Donating to my college is more important to me than donating to any other charity.

I like having others know I contribute to my college.

I donate because charitable donations make the world a better place.

My involvement in charitable organizations may someday lead to advancement in my career.

I am very satisfied with my life.

Segment Friends

Classification Questions

Alumni Donor Five Question Classification Tool

Agree completely

Disagree completely

Agree completely

Agree completely

Disagree completely

DISCUSSIONTargeting and Messaging

Why Target?

Better use of resources

Better use of time

Better ROI

Targeting PrioritiesChampions are the most important segment for colleges to target and manage.

– These alumni donate the most frequently and make the largest average donations. They are the foundation for alumni giving programs.

• Although we did not focus on major gifts, financially able Champions have the passion to make major donations.

– Champions are the low hanging fruit for fundraising programs. Colleges who already have proactive alumni relations programs are likely enjoying at least some success with these alumni through self-selection.

Targeting Priorities

Friends are the second most important target for colleges.

– Like Champions, Friends donate frequently. But their average donation is much smaller.

Friends provide outstanding opportunities for revenue growth.

– Friends donate much more to charities than any other segment, but only devote7% of their charitable giving budget to their college .

– Even small increases in the proportion of Friends charitable budget being allocated to their alma mater would provide substantial rewards.

Friends are already in the habit of giving to their college and other charities.

– Colleges need to do a better job persuading Friends that their college deserves more of their support relative to other charities.

Messaging

Champions– Champions agree with Friends and Acquaintances that messages based on tax

benefits, giving back to the college, and solving an important human problem are the most compelling.

– In contrast to other segments, Champions also find messages based on donor recognition, special donor benefits, improvements to facilities, and personal satisfaction to be nearly as compelling.

– The key is that Champions have complex relationships with the college that are not dependent upon any one benefit. Colleges should not ignore benefits such as recognition and donor privileges. These appeals provide opportunities to strengthen relationships with Champions.

– Removing these benefits could endanger a college’s relationship with Champions since these alumni already enjoy and expect to receive these benefits.

Messaging

Friends– The most compelling appeal for Friends is that the college needs help to solve

an important human problem or create opportunities for current students. – Friends do not seek more contact with the college or value recognition for their

gifts.– Appeals to Friends that focus on external reinforcement for giving are likely fail.

Similarly, unfocused messages that include non valued benefits along with the key core message of helping people are also more likely to fail. Finally, Friends are not motivated to increase their college donations to support abstract academic research.

– Fundraising messages directed toward Friends should prominently feature and focus on the college’s accomplishments that improve the world in general and help people.

Acquaintances– No comments are

provided since Acquaintances are unlikely to respond to fundraising requests regardless of the messages being used.

Messaging

Application

Examples from Audience

How are you using information about your alumni to segment the communications that they receive?

How Can a School Utilize This Research?

How Can a School Utilize This Research?

Segment alumni who are not alumni association members to:

– Increase dues paying alumni association membership

– Increase engagement

How Can a School Utilize This Research?

Survey to classify alumni as Champions, Friends, Acquaintances and to identify communication channel preferences as well as philanthropic interests in order to:• Increase annual fund participation• Find more major gift prospects pre-campaign• Determine who should go and visit• Create a customized messaging strategy

How Can a School Utilize This Research?

Classifying alumni, identifying their communication channel preferences and philanthropic interests, and enabling them to provide unstructured feedback enables schools to:

Create segmented communications that:– Are delivered via the preferred channels of different

segments– Contain messages that resonate for different

segments

How Have Schools Already Utilized This Research?

Several colleges and universities across the country have:• Classified their alumni as Champions, Friends, and

Acquaintances• Identified the communication channel preferences

of their Champions, Friends, and Acquaintances• Identified the philanthropic interests of their

Champions, Friends, and Acquaintances• Collected Open-Ended responses from all

respondents

Findings from the Field

National Study College 1 College 2 College 3

Champions 31% 31% 49% 32%

Friends 36% 41% 41% 60%

Acquaintances 33% 28% 10% 8%

Percentage of Champions, Friends, and Acquaintances at three universities across the United States as well as from the national study

Data Analysis

School Study Respondent DemographicsChampions

14,806Friends27,508

Acquaintances3,438

Average Age 44 51 49

Male 54% 54% 57%

LSA 40% 39% 39%

Members of Alumni Association

42% 35% 27%

Participations in the Past Year

3.4 3.1 2.9

Live in State 38% 40% 41%

Have Ever Donated 63% 69% 55%

Donated in 2011 29% 28% 16%

Noteworthy Open-Ended Responses from Champions

Comments Positive Sentiment

Negative Sentiment

Sometime I don't hear about all the events so post on Facebook and email more often! I really enjoyed the Sugar Bowl tour, the flight was great, loved the football buses, all the events were amazing including the paddleboat, tour and best of all the fabulous tailgate party and big win at the Sugar Bowl. I plan on donating more and being more active after meeting all of you. Thank you so much!

5 -1

Attending XXX had a major influence on my life. I absolutely loved every minute of it and would encourage anyone to go there.

5 -1

I loved my time at XXX and am happy to be able to contribute to its successful future. I don't need all the prodding I get from various parts of the University with respect to contributions and I absolutely hate phone calls. Thank you

4 -5

I work for a non-profit organization in Cambodia and fundraising is also part of my responsibility. I've found that knowing a little bit about my donors and customizing the message is important to be effective due to the overwhelming amount of requests people receive. That would be difficult with a donor/alumni base as large as XXX's but information gleaned from social media and online surveys could be helpful. Good luck! Christina

4 -3

Noteworthy Open-Ended Responses from Friends

Comments Positive Sentiment

Negative Sentiment

The robo-calls I was getting every single night at around the same time, from a # that I could not reach a human being at when I tried to call back, were VERY unwelcome!! I would get a call and would see the "734" area code and those four zeros at the end of the # and I knew it was yet another fundraising call from a xx undergrad in a college/program completely different than the one I was in when a student at xx...calling to ask for money under the guise of being interested in me and my experience at xx, life post-xx, etc. I had already had a long conversation with such a student and explained that I didn't have the funds to donate, yet she got me to say I might be able to pledge $25 in the future (then kept trying to "up-sell" it to $50...sounded like she was reading a script she had been trained to read, on how to try to get more money than the alumn was willing to give). At that point I almost just hung up on her, but politely told her to just send me info. in the mail and leave it at that. I got the info. in the mail and proceeded NOT to donate, as I told her would likely be the case (poor finances but more than that, being so disgusted by the nature of the call I received) . Then, I started receiving the daily "follow up calls" (seriously, I had a missed call from that "0000" number on my cell phone just about every day until finally I answered the call and told the student caller to remove my name completely from the list, which he said he would do). Bottom line: for alumni, this is a VERY unprofessional and ineffective way to promote a good feeling about our alma mater, xxx--not to mention raise funds! It leaves a very bad taste in my mouth, and I bet many other alumni feel the same. I loved my school (Natural Resources and Environment, SNRE) and I loved xxx--all four years of my time there. If I had ample funds (which I do not and am not likely to have anytime soon), I'd consider donating money directly to SNRE--but there is no way in hell I'd donate *anything, ever* via the crazy telefund system xx is currently using. I certainly understand the need to raise funds--but that is NOT the way to do it!!

Thanks for allowing me the chance to send feedback on this.

4 -5

Don’t Miss Out on Valuable Opportunities

From a Friend:“In 30 years since my graduation from college (Under Grad and MBA) and being a senior executive at a company in the Area, I have NEVER been contacted to help support the college and their graduates get placed at XXX XXXX. I find this insane.”

Messaging is Everything

From an Acquaintance:“I do not appreciate the fact that you care nothing about me and my life except that as a graduate I could be seen as a funding source. The only time I hear from you is when you want money that I don't have. You could disappear and I could care less.”

Friend

• From a Friend: I am a Head of School for an independent school in ---------, --, and therefore have quite a bit of experience in fundraising, just having raised $21 million for our capital campaign. I am retiring in June 2012 and will be returning to -------, where I have a home close to. After taking some time off I intend to get more involved with the institutions I attended in the area. You may contact me after June 2012.

Recommendations

• Take Champions and Friends who are not giving, but who have expressed positive sentiment and pilot test campaigns.

• Visit/call any Champion or Friend who had wanted to give in the past but who was turned away because his/her specific cause couldn’t be supported.

• Identify Champions/Friends who support education but not your college and develop messages that resonates.

• Develop a social media strategy to engage Champions.

Recommendations

• Develop messaging (both verbally and visually) that speaks to what different segments care about.

• Test offers with Champions and Friends that are more specific to the causes and issues that are close to their hearts.

• Conduct a communications audit to see how you can use the web to integrate, coordinate, and evaluate your communications efforts.

• Continue to gather updated contact information at all points (e-mails).

• Continue to conduct qualitative and quantitative research with alumni. They want to be heard!

To Continue the Discussion

@AnnCOleson

White Paper

Webinars

ann@convergeconsulting.org

Questions?