Engaging Alumni in Philanthropy

Introduction

The Centennial Campaign provided catalytic momentum to Reed’s alumni giving program. Alumni generously contributed over $84 million to the campaign, 41 percent of the $203 million total. Campaign priorities motivated 84 alumni to make six- and seven-figure commitments, demonstrating the depth of alumni commitment to our communal aspirations for Reed and helping the college emerge from the historic economic downturn in a strong fiscal position. Today alumni donate over $2 million to the Annual Fund, a 33 percent increase from the pre- campaign average of $1.5 million. This giving is critical to the college because tuition only makes up 60 percent of Reed’s revenue stream; donations provide the remainder. Three factors invigorated alumni giving over the course of the campaign:

1) Investing in staffing to build personal relationships with a geographically dispersed alumni body 2) Offering alumni expanded opportunities for involvement, in partnership with the development office and with other college departments 3) Using peer-to-peer contact and challenge matches to inspire new and increased giving to the Annual Fund

Increased outreach and innovations in ways of engaging and soliciting alumni have been effective in further motivating those who are already philanthropically committed. However, these efforts haven’t motivated enough sporadic, lapsed, or first-time donors to move the baseline. In the midst of many dramatic campaign successes, and with the total number of alumni increasing (primarily through historically high graduation numbers), the number of alumni donors has remained static.

1 Alumni Support Is Pivotal

Reed has a relatively simple business model, as shown in the pie chart below:

Between the funds that flow into the operating budget from the endowment and the Annual Fund, philanthropy makes up roughly 40 percent of the college’s revenue in any given year. Future budget models project relatively lackluster investment returns and modest tuition increases, so philanthropy will be the primary funding source for new priorities. Although the particular nature of Reed’s strategic priorities remain to be defined, we know that our communal aspirations for the college will be appropriately ambitious and will require a significant increase in fundraising.

The college is exploring a goal of increasing annual contributions to the endowment from approximately $10 million per year to over $20 million per year in the next decade as part of a strategy to double the size of Reed’s endowment to approach $1 billion. This will involve motivating more individuals to make an impact on the college and its students through contributions of $100,000 and more (foundations almost never contribute to endowments).

The college receives generous gifts from constituent groups other than alumni—friends and parents—but other community members don’t typically possess the depth of the relationship; the heartfelt, personal appreciation for Reed’s distinctive brand of education; and the lifelong bond with the college that alumni often demonstrate. Therefore the challenge is clear: in order to

2 realize a visionary future for Reed, more alumni will need to give every year and more alumni will need to make Reed a priority during their lifetime as well as in their estate plans.

Current Status

Reed historically relied on a handful of Portland-based philanthropists for major support, so the college was relatively late compared to its peers in developing broad-based fundraising efforts with any constituency, including alumni, and we are still behind the curve in our donor numbers. However, for many decades Reed has been effective at motivating major gift support, and during the recent Centennial Campaign alumni became a significant source of major gifts. Therefore, our fundraising results with alumni demonstrate a complex mix: both gratifying successes with a generous minority and intractable challenges in motivating a less responsive majority.

Gifts from alumni come through three basic channels: the Annual Fund, major gifts, and planned gifts (such as trusts, annuities, and bequest commitments). The Annual Fund raises many small and some large gifts for the current operating budget, solicited through the Phonathon, mail, email, peer contacts, and staff relationships. Major gifts at Reed are defined as $100,000 or more. They support college priorities where donations promise significant impact in partnership with college resources. Bequest commitments founded Reed and continue to be a strength of our fundraising program. Estate gifts have been particularly essential to the continued growth of the college’s unrestricted endowment.

1) Fundraising Trends

a) Divergent Alumni Giving Patterns The following graph shows patterns in a longer-term history of alumni fundraising and donor numbers (donor-of-record spike in 1999 indicates a data cleanup):

3 b) Low Participation Rates The following graph illustrates one way to look at how Reed alumni giving stacks up against its peer group. It shows that compared to this group of intimate, selective liberal arts colleges, Reed suffers from relatively low levels of alumni participation, which is defined as the number of alumni who make a gift in any given year. Alumni Participation

Davidson College 60% Enrollment: 1,756 Endowment: $511,392,612

Bowdoin College 57% Enrollment: 1,778 Endowment: $902,363,000

Amherst College 53%

Enrollment: 1,824 Endowment: $1,640,666,036

Carleton College 52%

Enrollment: 2,007 Endowment: $645,654,187

Hamilton College 49%

Enrollment: 1,864 Endowment: $635,235,000

46% Swarthmore College Enrollment: 1,545 Endowment: $1,498,775,000

Haverford College 44% Enrollment: 1,198 Endowment: $387,600,000

Whitman College 41% Enrollment: 1,596 Endowment: $400,968,238

Pomona College 38% Enrollment: 1,584 Endowment: $1,679,640,000 Grinnell College 34%

Enrollment: 1,693 Endowment: $1,383,856,000

Occidental College 28% Enrollment: 2,132 Endowment: $328,663,108

Reed College 28% Enrollment: 1,474 Endowment: $426,716,325

Colorado College 17% Enrollment: 2,043 Endowment: $501,272,099 0% 10% 20% 30% 40% 50% 60% 70% 4 c) Donor Trends by Decade Trends in alumni giving vary considerably by decade and strategies to motivate giving need to be tailored to the perspectives and habits of each cohort.

Alumni Donors and Participation by Class Year Annual Fund 2013

900 50% 45% 44% 800 40% 45% 700 40% 33% 35% 600 29% 30% 500 24% 22% AF13 donors 20% 25% 400 18% 20% % participation 300 15% 200 10% 100 5% 8 135 353 693 831 689 519 680 295 0 0% 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s

2) Recent Experiments in Alumni Fundraising We are optimistic that we can motivate more consistent alumni giving. During the six- year duration of Reed’s campaign, the college did attract broad support from alumni, significantly over the 30 percent who give in any one year. Over 9,108 of the 15,434 alumni constituency contributed (including 935 non-graduates). The percentage of alumni who have ever given to Reed is 57 percent. If we are able to motivate sporadic donors to give annually, we will realize significant gains in our participation rates.

As the campaign ended, Reed adopted a new five-year plan for the Annual Fund, which aims to build the Annual Fund to $5 million by 2017 (requiring an average of 7 percent growth in dollars most years) and to increase alumni donors from 4,000 to 5,000.

We have tried a number of new approaches to soliciting alumni, and we can learn from and build upon these.

a) Alumni Fundraising for Reed In 2009, a small group of alumni began planning for a peer-to-peer fundraising effort, jointly sponsored by the development and APR offices, which became known as Alumni

5 Fundraising for Reed (AFR). Today the AFR involves 130 volunteers who make over 1,000 fundraising contacts every year, employing both thank-you and solicitation outreach. AFR efforts currently focus on growing the number of young alumni donors and increasing Reed Leadership Circle ($1,000+) donors to the Annual Fund, and have played a critical role in recent successes on both fronts. b) Young Donors One of the success stories of the Centennial Campaign was the rise in young alumni giving. This trend began with current students. Reed has not had a history of student fundraising, unlike most of our peers. In 2006 a group of students decided to take on this challenge by creating a student group now called Reedies for Reedies. In the year the student group was formed, only 13 students gave to the Annual Fund. In 2012, that number reached 286. This group raises awareness for the importance of supporting the Annual Fund and spearheads a fundraising effort among current students to support a yearly scholarship for an incoming student.

The AFR formed a Young Alumni Working Group to help us drive momentum in fundraising among young alumni (graduates of the last ten years). In 2006, 480 young alumni gave to the Annual Fund. By 2012, that number increased to 889. c) Leadership Annual Fund Giving Another Annual Fund success during the campaign was a concentrated effort to increase gifts at the Reed Leadership Circle level ($1,000+ to the Annual Fund in one year). Reed Leadership Circle gifts steadily increased over the course of the Centennial Campaign from 326 donors giving $0.9 million in 2005 to 545 donors giving $1.7 million in 2012. Challenge matches and peer contacts through the Alumni Fundraising for Reed have been key to our success. d) Reunions Fundraising Reunions fundraising is a cornerstone of development programs at most of our peer institutions. Class-based fundraising efforts around reunions are used to boost participation as well as motivate generous gifts from alumni in honor of a reunion year. Reed is far behind the curve in creating such traditions, and many elements of the alumni culture seem to weigh against the college being able to make it a centerpiece of future fundraising. We have celebrated two notable class-based efforts that benefited from outstanding leadership: the class of ’83 scholarship and the class of ’81 scholarship.

However, broadly speaking we continue to lack momentum in raising gifts around reunions programs—experiments in peer-based reunions solicitations have yielded disappointing results. The college lacks the type of peer-to-peer networks relied upon by schools that build huge reunions fundraising efforts. These networks are often built

6 through shared experiences around competitive sports, fraternities, and sororities, more traditional student leadership groups, on-campus housing, and cohesive, four-year graduation cohorts.

After examining comparative data and analyzing past results, the development office decided to continue to focus staff primarily on supporting the more reliably positive non- class-based solicitations of the AFR. However, we are concurrently looking for ways to build reunions-based fundraising traditions among younger graduates who generally exhibit more class cohesion than those who graduated before 2000.

3) A History of Successful Campaigning Campaigns have been an important tool in Reed’s fundraising momentum and fiscal strength, and the recently concluded $203 million Centennial Campaign not only allowed Reed to realize important academic aspirations in the middle of an economic downturn but also brought the college’s alumni fundraising to a higher level. Our success capitalized on new strengths in major gifts from alumni, as well as realizing historic strengths in bequest commitments.

Comparing the Centennial Campaign to Reed’s most recent previous campaign—the Campaign for Reed College (CFRC)—illustrates important trends in major gift fundraising from alumni:

● More alumni gave major gifts to the Centennial Campaign versus the CFRC, and those alumni contributed more dollars. Overall, alumni accounted for a greater percentage of major-gift donors. The CFRC brought in $41.6 million from 46 alumni major-gift donors, whereas the Centennial Campaign raised $69 million from 86 alumni major-gift donors. ● One of the biggest success stories of the recent campaign was the rise of million-dollar donors, and alumni played a significant role. A total of 42 donors (including bequest donors) made seven-figure commitments to the Centennial Campaign. Of those donors, 23 were alumni. This alumni number alone eclipses the total number of seven-figure donors from the last campaign, which was 16. ● Realized bequests brought $46 million into the college from 90 alumni. While bequests accounted for roughly the same percentage of campaign totals as they did in the CFRC— 30 percent—dollar amounts nearly doubled.

7 Historical and Cultural Factors

The social patterns of alumni and their experiences as students play a significant role in trends of alumni giving at Reed, as in any higher education institution. A 2009 survey of alumni contained some intriguing findings. Almost all (95%) of the alumni respondents reported taking pride in their degree, 87 percent feel that Reed is part of who they are and that Reed values its alumni, and 80 percent felt an emotional connection to Reed. On the other hand, only 58 percent feel they have a stake in Reed’s success and achievements, and only 43 percent feel they are still part of the Reed community.

Some factors that weigh against alumni giving are these: ● Reed has traditionally prided itself on being administratively lean and has historically lacked the staffing infrastructure to carry out effective broad-based fundraising efforts. ● While alumni often have deep friendships arising out of their time as students, they often comment on a lack of class cohesion for reasons noted above. ● Some alumni report that they experienced Reed’s historic “boot camp for the mind” ethos as harsh and nonsupportive, and therefore have felt estranged from the college, or at least lacked a sense of loyalty or gratitude that often motivates giving. ● Traditions of student autonomy may have translated into a strong anti-establishment posture among some alumni, which could morph into skepticism regarding donating. ● The college has not had a strong track record of meaningful engagement of alumni prior to the last decade. ● Reed’s reliance through the ’70s and ’80s on mega-gifts from Portland businessmen may have been a disincentive for the growth of more modest contributions from alumni. ● Many of our peers have strong student fundraising programs that acculturate alumni to making regular gifts to their alma mater; until the last few years Reed didn’t have a student giving effort, and this program is still in its infancy. ● Some alumni speculate that a discomfort with discussion of money that arose from Reed’s egalitarian culture may have contributed to a lack of awareness of the importance of alumni giving. ● Reed has emphasized that more modest contributions be directed as unrestricted gifts to the Annual Fund, which could lose the interest of alumni who want to direct giving to specific areas of the college.

On the other hand, Reed has the following strengths to build on in its fundraising: ● The college has enjoyed a consistent mission and curriculum for the duration of its history, and alumni report a high sense of shared experiences and values across eras. ● The intimacy of campus, small class sizes and the conference method of teaching contributed to strong bonds among many alumni and between them and their professors. ● Most alumni found their years at Reed to be a life-changing experience and many have a high commitment to providing the same opportunity to others.

8 ● Reed has a strong group of regular donors who make the college a philanthropic priority. In the aforementioned 2009 survey, what Reed calls its “core donors” (those who had given each year for three years) found the following reasons to give as the most important: the college’s excellence and core values; supporting financial aid; and donating as a way to give back.

Alumni Involvement

The campaign and linked centennial celebrations also increased engagement of alumni in general in the life of the college. The following initiatives proved helpful in building connections between alumni and Reed:

● Centennial-related events in chapter cities realized record-breaking attendance. Kick-off events for the centennial hosted 793 attendees in nine different cities. ● Centennial Reunions was a high-water mark in bringing alumni to campus for a celebration of the college’s past and future aspirations. More than 2,500 people attended. ● Reed magazine continued to be a very effective communications tool for alumni, recently augmented through social media strategies run by both the public affairs and alumni & parent relations offices. Reed magazine has a circulation of 20,000. From January 1, 2013, to August 11, 2013, the magazine website logged 55,508 visits, more than double the visits from the corresponding period in 2012. In a recent reader survey, 59 percent of respondents rated the magazine as "Very Good" or "Outstanding." Additionally, 41 percent said the magazine makes them proud to be a Reedie and 63 percent said the magazine strengthens their appreciation for the college and its mission. ● In 2006, the Alumni Board and the career services office began a new strategic focus on facilitating ways alumni can help current students plot out successful paths from graduation to careers. In 2012, the collaboration supported a program called Working Weekend, an alumni-generated event that brought 82 alumni to campus from across the US and from other countries to participate in panels and networking sessions with students. Last year, the second year of Working Weekend, parents and friends of Reed joined the alumni mentors, 92 strong, who came to campus. ● The development office organized Reed Campaign Committees (RCCs) in chapter cities to carry out fundraising and advocacy for the campaign. At their height, the RCCs involved 68 alumni, parents, and friends. (As planned, the RCCs were phased out at the campaign’s close.) The SP2 initiative is pioneering a new way for alumni to provide leadership to the college’s fundraising plans; 27 alumni are members of SP2. Combined with AFR volunteers, 156 alumni are active partners with the development office.

9 1) Alumni Engagement Metrics In 2012, Reed conducted an analysis of its alumni population using a newly developed engagement metric. This metric used available data on giving, volunteering, campus visits, event attendance, bequest intentions, and alumni directory access. The results showed that 60 percent of alumni are “interested” or “engaged,” as defined below.

Alumni Engagement Metric1

Engagement Level Count Percent of Total

A Engaged 4,262 24.6%

B Interested 6,393 36.9%

C Somewhat Interested 3,332 19.2% in the Past

D Not Interested Yet 3,346 19.3%

Total 17,333 100%

Since only 30 percent of alumni give in any year, only half of those who are either engaged or interested donate. Motivating the other half to make an annual donation would add significant strength to Reed’s fundraising capacity.

1 Engagement Score A = giving and/or volunteering and/or attending an event/visited/IRIS access (alumni directory)/Eliot Society (bequest intentions) in the past 5 years (5 or more times) B = doing any one of those things in the past 5 years (1 or more times) C = doing any of those things ever in the history of our records (6 or more years ago) D = never doing any of those things

10 Questions for Further Thought

1) Considering your own experience and that of people you know, what are consistent issues that encourage or discourage financial support from alumni for Reed?

2) What are the conditions that made it possible for you or those you know to consider significant giving ($5,000 or more) to Reed?

3) Raising the participation in giving by alumni is staff-intensive because changing donor behavior is difficult. Reed has focused instead on meeting dollar targets. Do you think that increasing the number of alumni donors should be a central focus of development work or remain secondary to meeting financial targets? What might motivate a sporadic donor to make annual gifts?

4) How important are alumni peers in motivating your donations to Reed? How can Reed best capitalize on the successes we have experienced in alumni-led fundraising efforts?

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