2023 continued to be a year of transition out of the COVID-19 pandemic, which for more than two-and-a-half years applied its grip on every part of life for organizations and individuals and laid the foundation for a changing future. The universe of educational institutions and their advancement programs was no exception. This report continues our series of annual updates as higher education advancement organizations evolve their engagement strategies to remain vibrant and relevant at a time of significant change in society and the world. (For a quick review of the past few years, see Trends in Advancement, January 2023).
As advancement organizations transition out of the pandemic years, many have been explicit about the need to think differently. What will their constituencies want and need in the next decade? How should they strategically invest in staff, programs and infrastructure to build toward those outcomes? Along with their institutions adapting to new populations of students and emerging needs of society, engagement and fundraising organizations and activities must also identify and incorporate new ways to broaden their reach to current and future alumni in support of lifelong relevance to them.
In sum, higher education advancement organizations are currently challenged to identify new strategies, expand expertise and talent, work in different environments (e.g., hybrid) necessitating solid collaboration and communication, use the latest tools and obtain sufficient resources to sustain vital, yet dynamic, stakeholder relationships. At a time when confidence in higher education is decreasing and demands for loyalty elsewhere are increasing, this also requires working partnerships with their institutions, as well as with the volunteer leaders who represent their constituencies.
While 2024 likely represents “evolution” not “revolution” in institutional advancement, several realities are clear:
- Confidence in higher educational institutions is declining, and giving by individual alumni is down.
- The “greatest wealth transfer in US history” has arrived, and women are set to be the largest beneficiaries.
- Personalization matters more than ever – and is becoming more sophisticated.
- Constituencies reflect changing demographic, preferences and voices: for example, generations differ in many respects in terms of what they value and how they want to interact; donors want to be more active in the decisions about their giving; and a fully inclusive community is frequently a core value.
- These issues drive the need for strategic talent management and training of both staff and volunteers to ensure that advancement organizations aim at high performance and accountability, are equipped to work together as teams and have the capacity to respond to the evolving interests and styles of their audiences.
- Regional programming facilitates both reach and strategic priority setting, while deepening relationships with alumni volunteers.
- Along with that, new technologies require new skills and strategies – from optimizing data, applying appropriate segmentation and measuring impact to understanding the far-reaching consequences of artificial intelligence.
As one of our client advancement VPs said recently, “Exploring avenues to further develop [staff] skills and enhance their experiences will be pivotal in sustaining our momentum and fostering a culture of innovation.”
A Look at Higher Education Trends as a Context for Advancement
Surveys and behaviors related to public perceptions of and confidence in higher education and the value of a college degree present a mixed picture. A Chronicle of Higher Education survey published in September 2023 (subscription may be required) found continuing ambivalence.
On the upside, in fall 2023 higher education institutions finally saw growth in student enrollment for the first time since the pandemic. Undergraduate head counts grew 1.2% (or 176,000 students); yet there are still more than a million empty seats on campuses compared with five years ago, according to the National Student Clearinghouse Research Center (subscription may be required). As part of that trend, older students over 21 drove the growth and shorter programs are demonstrating increasing popularity (associate and certificate programs).
International student enrollments are rebounding, increasing 12% in 2022-2023, the largest single-year growth in more than four decades and especially at the graduate level.
The Chronicle survey in September also found most people would advise others to pursue a four-year degree, yet many do not believe institutions do a great job educating their students and alternatives (such as trade school or other professional or technical training) have wide support.
On that note, a recent survey found nearly 45% of companies plan to eliminate bachelor’s degree requirements for some positions in 2024. In 2023, 55% of companies removed degree requirements, particularly for entry-level and mid-level roles (especially information services, software, construction and finance and insurance), a report from Intelligent.com shows. The survey of 800 employers also found 80% were “very likely” or “likely” to favor work experience over education when considering a job candidate. Cost is a factor in limiting the college option for people from traditionally marginalized groups and lower socioeconomic backgrounds.
Issues for Advancement in 2024
The influences for thinking innovatively about advancement as higher education changes are both external and internal.
First, the External…
Giving Patterns
Donations to colleges and universities reached the second-highest level on record in 2023, according to the annual Voluntary Support of Education Survey by the Council for Advancement and Support of Education (CASE).
However, that number represented a drop of 5% after inflation and was powered by a slowdown in individual giving. In fact, alumni giving fell 13%. (Notably 2022 was a very good year in giving – when colleges and universities raised $59.5 billion, the biggest jump since 2000.)
CASE president and chief executive Sue Cunningham said the increasing gift size in 2023 demonstrates a vote of confidence in higher ed, according to the Chronicle of Higher Ed article. The data showed 11 donations of $100 million or more, which accounted for 3.9% of total donations and more than double from 2022. “Gifts at this level tend to be the outcome of years of engagement and interaction,” she said. She also said many people are using donor-advised funds or family foundations for individual giving, thus decreasing the individual giving numbers but at the same time allowing them to be more strategic in their giving. Both the stock market and donor activism related to politics (e.g., the Israel-Hamas war) are factors in annual giving trends, as last year some philanthropists withheld funds in protest of institutional policies and practices.
Diving deeper into the data, the Chronicle of Philanthropy said 43% of contributions were gifts of $99 or less; yet these represented less than 1% of total dollars raised by a sample of 236 institutions in 2023.
Increasing Wealth of Women
In the so-called “greatest wealth transfer in U.S. history,” women are set to be the largest beneficiaries of this generational wealth shift from Baby Boomers to millennial and Gen X heirs in the next decade. In a Fast Company analysis quoting McKinsey & Company and New York Times data, by 2030 women are expected to control much of the $30 trillion in wealth that Baby Boomers possess, up from $11 trillion today.
Recent Alumni – Disaffection and Different Habits among Gen Z
In the youngest age group measured, Gen Z is America’s most diverse generation (ages 12-27) but are coping with the present and feel even worse about the future, according to a comprehensive Axios report. They are concerned about unemployment and affordable living and are politically disillusioned (58% aren’t sure if they will vote in November). They keep different hours (5 p.m. dinner reservations are common) and enjoy old-school hobbies like jazz; 75% want hybrid work and are drawn to benefits like tuition repayment, retirement programs, mental health days and gym memberships. College students are flocking to generative AI courses, and 57% of Gen Z and 62% of millennials say AI’s benefits outweigh its risks. Multiple polls have found TikTok to be their preferred news source.
And, the internal…
Personalization & Segmentation Aided by Technology
In politics, they call it “deep listening,” the door-to-door or hot-spot canvassing that finds out what issues people care about the most. More than two decades of customization in the evolution of “engagement” in business, politics, universities and advancement organizations only solidifies the importance of personalization.
A recent McKinsey & Company study showed companies who excel at demonstrating “customer intimacy” generally have faster rates of revenue growth than their peers. In fact, because of personalization, three-quarters of consumers switched to a new store, product or buying method during the pandemic due to the surge in digital activities and 71% expect companies to deliver personalized interactions. “From web to mobile and in-person interactions, consumers now view personalization as the default standard for engagement,” according to the report, The Value of getting personality right – or wrong – is multiplying.
Engagement metrics continue to evolve as technologies become more sophisticated and the norm for advancement organizations is to continue to migrate databases to tools for data-informed decisions. Programs must be mobile-friendly. Staff must be trained to use new tools, skills and competencies for data and measurement and be good messengers about impact. Yet declining levels of institutional support at many colleges and universities may mean advancement offices constantly have to do more with less.
Measuring “value” along with frequency of interactions is important in developing strategies, priorities and resources for alumni and donor programs. With so many competing ways to spend time and money today, what sticks is the quality and benefit of an experience. And, in the post-pandemic world, where people expect options for “blended” interactions, it’s important to meaningfully engage alumni and donors in their preferred settings, thus in-person, virtual and blended activities.
Regional Programming
Over the past decade, advancement programming has trended regional – scaling work to regional approaches that engage more alumni, parents and friends in local areas around what really matters to them and building the number of volunteers involved in advancing the institution. This also allows strategic hyper-focus and priority setting for regions that can deliver the highest yields in engagement and fundraising at a time when financial and human resources are limited.
Within this framework, a central organization can improve its service delivery by optimizing digital outreach customized to regional constituencies; the potential payoffs are increased engagement, relevance and personalization without significantly increased staffing. And, for those institutions with more e-learning and more global alumni, “regional” and “digital” go hand in hand to expand presence, belonging, relevance and growth in distributed markets.
Talent Management and Organizational Effectiveness
It’s more common in alumni offices today to discuss planning in terms of “business practices” – terminology that might have been anathema 20 years ago, but now indicates more purposeful and high-quality deliverables along with strategic planning and performance management.
In the more innovative institutions, there is more strategic collaboration across academic units to advance alumni and donor engagement. Worldwide alumni engagement also is strengthening as the international student populations in U.S. institutions regain their footing and as graduates from the U.S. select careers in global environments.
Strategic talent management – having the right people in the advancement office – is increasingly a component of advancement strategic plans. Such efforts are supported by expectations of accountability, tools of mentoring and partnership and operational values fostering focus and clarity. Teamwork in a hybrid environment has different demands than fully onsite teams and different challenges for communicating, partnering, collaborating and valuing difference. Making the shift is not necessarily intuitive and often requires additional attention to and nuances in team building.
Accountability incorporates the expectation of ROI, or ROE (return on engagement) investments, and messaging that stresses “impact.” As advancement offices grow their programs, portfolios and reach, they are more visible and influential within their institutions, yet must prove they are worthy of strategic investments that will allow them to grow, flourish and diversify as effective partners within their institutions.
Other New Considerations – with Unknowns
To what degree divisive politics in society will affect advancement programs remains unclear. Will polarization and partisan behavior on campuses find their way into the alumni experience and affinity relationships? Political differences already have created disruption in student and donor groups in assorted institutions and in social behavior in society this year. How this will play out is unresolved, although a handful of donors have withdrawn support recently due to institutional policies related to the Hamas War.
In addition, several states, including Massachusetts, have legislation in process to ban legacy admissions – in Massachusetts’ case in both public and private universities. According to Education Reform Now, Massachusetts has the most colleges in the nation using legacy admissions, a practice that can relate to competitiveness in recruitment as well as donors and giving.
And, with generative AI creating a new wave of personalized education, how will it assist with advancement staffing, programs and measurement? AI may help control costs and is already widening analytic capabilities, but it’s also crucial for advancement offices to understand and use it wisely and responsibly. That requires leaders and staff to catch up and provide education and safeguards and be well-informed about privacy considerations, laws and ethics related to their constituents. ChatGPT, for example, is one of the snazzy new tools that necessitate caution – particularly when feeding information into an AI tool that an organization does not own or control.
