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Why Alumni Are Important for Higher Ed Institutions

by Rachel Bishop | February 3, 2020
Why Alumni Are Important for Higher Ed Institutions

Part one of a three-part series on why alumni are important to higher ed institutions and how institutions can create meaningful, dually beneficial relationships with graduates. Read part two here and part three here.

Why alumni are important for higher ed institutions

Maintaining good relationships with alumni over time is crucial to the success of higher ed institutions. Alumni serve many valuable roles, such as helping to build and grow an institution’s brand through word-of-mouth marketing. For instance, positive posts on social media can create buzz and increase application rates. Colleges also rely on alumni to provide mentoring, internships, and career opportunities to students. These are just a few of the reasons why alumni are important to the success of higher ed institutions, which are becoming more accountable for job placement rates.

Further, alumni bring in needed revenue through donations, attendance at sports events, etc., which can help institutions weather the “perfect storm” of financial issues that many currently face. During the recession, state governments cut subsidies for higher education, and instead of returning funding to previous levels when the recovery started, they continued to make more cuts. In addition, low birth rates among Gen Z and low unemployment from a strong economy mean that fewer students overall apply to college. In fact, application rates decreased by 11% between 2011 and 2019.[1]

Alumni as revenue contributors

As a result, colleges are relying more on private gifts as a source of revenue. While the total amount of donations has recently increased, they are coming from fewer people.[2] The average percent of alumni who donated to their alma mater has continued to fall from 12% in 2007 to 8% in 2017.[3] Meanwhile, the 2017 Tax Cuts and Jobs Act is expected to further decrease donations since it eliminated the incentive for middle-class households to itemize deductions.

This marks another reason why alumni are important to the success of higher ed institutions. These institutions need to increase alumni giving in order to raise revenue and remain competitive in university rankings, which take alumni contributions into account.[4] Yet 87% of alumni relations professionals feel that they need to improve outreach with their members. Further, 70% report that member engagement is their highest priority goal.[5] If institutions are to reap the financial and other benefits that alumni can provide, they must focus on building deep relationships with students while they are enrolled. Then, they must maintain those connections over time.

A mutually beneficial relationship

Chris Dellarocas notes the meaning of "alumnus" [6]:

The word “alumnus” stems from a combination of the Latin words “foster” and “child.”

In effect, colleges and universities need to view students as lifelong commitments that do not end at graduation. Alumni are resources that can provide meaningful and mutually beneficial relationships over time.

why alumni are important
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For example, alumni are a prime target audience for continuing education opportunities. Unlike undergrad programs, advanced credentials are quite profitable because they rely on very little tuition discounting and financial aid. Therefore, the revenue they produce can be used to offset any deficits that occur at the undergrad level.

Further, the enrollment in master’s and professional degree paths is currently growing,[7] spurred by increased global competition in business and by rapid changes in technology. Jobs and the skills they require are changing much faster than ever before. In 2011, Doug Thomas and John Seely Brown predicted that the half-life of a learned skill was about five years and decreasing. This means that what is a cutting-edge skill today could become outdated in a decade or less.[8]

Not only are jobs themselves changing. Often, employees hop from one job to another, spending around three years in the same role.[9] At the same time, people are living and working longer into their lifespan. All of this means that lifelong learning is critical to career success. As Huntington Lambert, Dean of Continuing Education at Harvard, predicts, higher ed for each adult who enters the workforce will need to occur on and off for about the next 60 years.[10]

Training and retraining

As a result, the for-profit professional training and certification industry has grown to be a $166.8 billion market in the United States.[11] These programs are cheaper than degrees and can be used to quickly update skills as needed, when needed. They are also competency-based, meaning they allow learners to display real-life skills that are used on the job. In turn, this gives graduates a leg-up when they apply for jobs. Many economists and business leaders predict that short-term credential programs that offer professional certifications and badges will eventually replace the master’s degree.

Higher ed institutions are beginning to consider “unbundling” higher education by creating short-term certification programs to better compete with for-profits in this market. Chris Dellarocas argues that a unique feature of colleges and universities that sets them apart from other vendors in the crowded professional education field is their personal relationship with students. He stresses that the education provider “who own[s] the relationship with the customer [will] control the flow of revenues.”[12] In other words, trainees who are looking for professional development will turn to entities with which they have a trusted relationship. What sets apart colleges and universities from private industry competitors are

  1. their previous relationships with students, and
  2. their add-on services beyond educational content. These include mentoring/advising, academic support, campus-based activities, and alumni career networks. In short, a sense of belonging to a supportive community.

Creating meaningful relationships

Because they already have a connection with their alma mater, alumni are a prime market for certificate programs. Colleges must create positive relationships with undergrads so that they want to return to their alma mater. From there, institutions must remain close with alumni over time to let them know they can return (either online or in-person) throughout their careers to refresh knowledge or gain mentoring and networking support. Our next blog will take a look at successful strategies institutions can use to engage graduates in helpful two-way relationships over time in order to increase alumni volunteerism and revenue.

* Special thanks to our guest author, Alice Anne Bailey, PhD, a Higher Education Consultant.


References

[1] Nadworthy, E., and Larkin, Max. (2019, December 16). Fewer Students Are Going to College. Here's Why That Matters. National Public Radio.

[2] Hazelrigg, N. (2019, June 20). Larger Donations, Fewer Donors. Inside Higher Education.

[3] Bryant, J. (2016, February 15). How Does College Student Satisfaction Predict Alumni Giving? Ruffalo Noel Levitz.

[4] Seltzer, R. (2016, June 30). The Elusive Young Donor. Inside Higher Education

[5] Toyn, G.W. (2017). The Alumni Relations Benchmarking Study. Access Development.

[6] Dellarocas, C. (2018, August 1). Higher Education in a World Where Students Never Graduate. Inside Higher Education.

[7] Marcus, J. (2017, September 19). In-Demand Graduate Programs Become a Cash Cow for Colleges in Financial Distress. The Hechinger Report.

[8] Thomas, D., and Brown, J. S. (2011). A new culture of learning: Cultivating the imagination for a world of constant change. Lexington, Ky: CreateSpace?.

[9] https://qz.com/work/1636066/millennial-managers-say-changing-jobs-has-aided-their-success/

[10] Tugend, A. (2019)

[11] U.S. Bureau of Economic Analysis

[12] Dellarocas, C. (2018, August 1). Higher Education in a World Where Students Never Graduate. Inside Higher Education.

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