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.