Fund Raising

A Major Barrier to Alumni Giving: Graduates’ Mistrust

November 06, 2015

How much college alumni trust their alma mater with their money appears to be the single biggest factor in determining whether they will donate to it, a new study concludes.

The study, based partly on alumni responses to hypothetical solicitation letters, found that their trust in their undergraduate alma mater heavily influenced their likelihood of donating and how much they planned to give. Their trust levels trumped other factors — such as their income, their race, their gender, their education level, and the worthiness they ascribed to a cause — as a predictor of their willingness to give.

The study also suggests such colleges have failed to maintain many graduates’ confidence. About one in four of the survey’s respondents expressed little or no trust in their alma mater to use a donation from them as directed, and only about two in five characterized their level of trust as high.

'Institutions are not doing a good job teaching their alumni and students how the finances work, how philanthropy works, where does the money go.'
The study’s results "suggest that a coordinated attempt to bolster alumni trust in their alma mater and how it spends donations" may encourage substantially more people to give and "those that already give to give more," says a paper summarizing its findings.

"It boils down to an education issue," said Noah D. Drezner, an associate professor of higher education at Columbia University’s Teachers College, who conducted the study along with Maria Anderson-Long, a doctoral student there.

"Institutions," Mr. Drezner said, "are not doing a good job teaching their alumni and students how the finances work, how philanthropy works, where does the money go."

Information Gaps

Ann E. Kaplan, director of the Council for Aid to Education’s annual survey of college fund raising, expressed surprise at how much mistrust alumni showed in the new study.

"It is illegal for an institution not to use funds for the purposes a donor restricts them to," Ms. Kaplan said. Colleges, she said, "are meticulous about following donor intent," so that "if you make a gift to your alma mater, and you direct that that gift be used for a specific purpose, it will be."

One possible explanation for the low trust levels identified in the study may be the chief population it surveyed — not the major donors who account for a disproportionate share of philanthropic support for higher education, but smaller donors who give primarily in the course of annual fund drives.

'There is a lot of transparency in higher-education finance, but most people who are making a small to midsized gift are not going to do all of that research.'
"There is a lot of transparency in higher-education finance," Ms. Kaplan said, "but most people who are making a small to midsized gift are not going to do all of that research."

The paper on the study’s findings, presented on Friday at the annual conference in Denver of the Association for the Study of Higher Education, said the survey respondents’ answers to open-ended questions suggest that colleges "should emphasize a donor’s ability to specify the use of funds" and tell donors how their funds have had an impact.

Colleges, the paper said, also should consider educating alumni about how donations are tracked and finding concise ways to relay information about institutional expenditures. Such steps, the paper said, "are all likely to have a positive impact on trust, and therefore giving."

Cost Concerns

Mr. Drezner administered the survey that underlies the new study in 2014, recruiting paid participants through Amazon’s Mechanical Turk, a crowdsourcing site used by behavioral scientists. He received about 1,620 responses. The survey was restricted to people who had graduated from one of the nation’s four-year colleges before 2013, to ensure that all participants had been exposed to at least one full fiscal year’s worth of solicitation to an annual fund.

Along with asking respondents about their backgrounds, political ideology, and past giving, the survey put before them two fictitious appeals for scholarship funds for specific students. The letters varied in terms of the backgrounds of the students described and whether the proposed scholarships were based on merit or need.

'How much trust do you have in the institution to spend your donation as you have directed?'
Respondents were asked, "Thinking about your undergraduate college or university, how much trust do you have in the institution to spend your donation as you have directed?" They also were asked to rate how much importance they attributed to the cause described in the letter and whether it was likely to alter how much they gave to their alma mater compared to the year before.

The researchers found that respondents with high levels of trust in their institutions were more likely than others to say they would donate and give at higher levels than before.

In breaking down the survey’s responses for certain populations, the researchers found that alumni who had graduated at least 10 years before the survey was administered expressed higher levels of trust than younger respondents did. Even after the researchers statistically controlled for the effects of education, income, and political ideology, black respondents expressed more trust in their alma mater than did white respondents, and respondents who identified themselves as gay, lesbian, bisexual, or transgender expressed lower levels of trust than other populations did.

In response to open-ended questions posed by the survey, some respondents who mentioned distrusting their alma mater said they had little confidence in its spending or believed it did not care about its students. Others complained about the cost of higher education or expressed a general distrust of the nation’s higher-education system.

Peter Schmidt writes about affirmative action, academic labor, and issues related to academic freedom. Contact him at peter.schmidt@chronicle.com.