According to the Council for Aid to Education, the number of alumni of record from U.S. colleges and universities has increased dramatically over the past several decades. In fact, the average number of alumni per institution has nearly quadrupled, from around 15,000 in 1972 to 60,000 today. At the same time, the average number of alumni donors has remained relatively flat. Although one may think that this suggests a certain level of stability, it actually has a negative effect on alumni participation rates.

As the number of alumni grows, an institution needs to increase the number of alumni donors just to maintain its current alumni-to-donor ratio. Imagine that last year a college had 50,000 living alumni and that 5,000 of them made a contribution; its alumni participation rate would be 10 percent. Then imagine that the number of living alumni increased by 2 percent this year, to 51,000, perhaps due to an increase in enrollment or because fewer alumni died (not implausible as life expectancies are going up). If the college maintained its current alumni donor count of 5,000, its alumni participation rate would decline to 9.8 percent.

This scenario has become an all too familiar reality for many educational institutions and their annual giving programs—so much so that many programs have adopted the slogan “flat is the new up” when it comes to alumni participation rates. Does this mean that declining alumni participation rates should be accepted as a harsh but unavoidable reality, since the increasing size of alumni populations is beyond the direct control of annual giving programs?

Before you answer, ask yourself if you would accept population growth as a good excuse for declining employment rates. Probably not. Instead, you’d think something was broken within the economy. The way you think about alumni participation rates should be no different. The fact that rates have been declining steadily for so long is an indication that something is fundamentally wrong.

Several factors are at play when it comes to the increase in alumni populations. One of them is—good news!—gender equity. More women are going to college today than ever before. In the years following World War II, fewer than 30 percent of those enrolled in degree-granting postsecondary educational institutions were women.¹ By 2011, that number had nearly doubled. Women now represent approximately 57 percent of enrollments in colleges and universities in the United States.

Another reason there are more alumni today is that there is a growing pressure for individuals to have a college degree to be competitive in the workplace. If you want to earn a decent income, your chances increase dramatically with a college degree. According to the Pew Research Center, the median annual earnings for full-time workers aged 25 to 32 with college degrees is $17,500 greater than for those with high school diplomas only. That gap widened steadily for each successive generation in the latter half of the 20th century.

International interest in U.S. higher education has also played a role in the rising number of alumni. Students from other countries are flooding into the U.S. higher education system, reaching record levels last year. They now make up over 4 percent of total enrollments for U.S. colleges and universities, with nearly half of them from China, India, and Korea.² In 2014–2015, the number of international students in the United States increased by 10 percent, to a record high of 974,926 students. Part of what makes international students so appealing is that few of them receive financial aid; therefore, they provide institutions with a good source of revenue.

It should be no surprise that, as demand for college degrees has increased, not only has the U.S. higher education system produced many more alumni, but it’s had to establish more institutions. There are now over 4,500 postsecondary Title IV degree-granting institutions in the United States—a number that has increased by 45 percent since 1980.¹

A larger alumni population may be a significant part of the oft-referenced “declining participation rates” story. While it’s important to recognize this, in order to get to the bottom of the real issue, you need to look at your body of alumni and question why a smaller portion of them are giving back to their alma mater each year.

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¹National Center for Education Statistics
²Institute of International Education

This article has been adapted from the book Ideas for Annual Giving by Dan Allenby. Copyright (c) 2016 Council for Advancement and Support of Education. All rights reserved. Used by permission.