Talk to All Athletic Donors: It Pays Off

Even before the COVID-19 pandemic put many tens of millions of dollars in the red, college athletics programs were facing a unique set of financial challenges exacerbated by fan behavior and technological innovation. D1 expenses are up over 80% since 2009, led by coaches’ salaries and buyouts, facility upgrades, and the expansion of student-athlete services. Ticket revenue has grown just 28% in that same time. Premier men’s basketball and football programs are the only consistently profitable sports, while the rest struggle to keep up with steep cost increases (NCAA.org).

Source: NCAA.org

Since 2000, attendance has fallen consistently, even at marquee venues housing the nation’s most successful teams. 2019 SEC football attendance was the lowest since 2001 (SEC FB), as average overall FBS attendance hit a 24-year low (CBS). 60% of D1 men’s basketball programs saw attendance declines since 2009, with some blue blood programs’ attendance down 4% (NCAA.org). Access to an ever-expanding array of entertainment and viewing options keeps fans at home as institutions attempt to satisfy aging fanbases who are happy with the status quo, while younger attendees look for a social event: alcohol, live music, and a digitally connected communal experience rather than a confined seat.

Prior to the pandemic, PwC forecasted North American sports’ overall gate revenue to barely keep pace with inflation through 2023 (PwC). With slim margins and more fans staying home, even after venues reopen, it’s important to lean heavily on donations. Fundraising is on the menu 365 days a year and far too many schools are leaving money on the table.

A handful of wealthy alumni mega-gifts generally drive institutions’ multi-year capital campaigns, but total donor counts are declining (Giving USA Report). Following 2017 tax code changes, schools have struggled to inspire gifts from middle-income donors, and the pool of available young alumni gifts is shrinking with U.S. post-secondary enrollment, which has fallen every year since 2012 (WSJ). COVID certainly hasn’t helped the situation by applying pressure to individuals’ finances and hindering the gameday product. In a nation-wide survey of more than 4,000 college athletics fans, The Aspire Group found that 1 in 10 existing donors would pull their contribution should games be cancelled, while 14% would decrease their gift amount. There is an opportunity to inspire goodwill from non-donors though, with 10% at least “slightly more likely” to donate to athletic departments due to the impact of COVID.

Many institutions lack collaboration between central campus and athletic development to share methods, strategies, and data, forcing athletic departments to lead campaigns without the aid of complete or reliable donor lists. Soliciting donations from a fanbase that attends fewer games presents an even higher hurdle to clear.

While high-level donors receive a white glove approach from professional development officers, most institutions utilize a part-time, often poorly trained, student workforce to manage mid- and low-level athletic donors. These calls invariably lack sophisticated strategy and aim to lock donors into their existing giving level without an upsell, failing to grow the donor base or development revenue attached to seat-related gifts. Proactive outbound sales teams are proven to increase annual athletic ticket and donation revenue in excess of $1M (Popp et. al). Two athletic programs who chose to outsource development efforts exemplify these results:

• A power five school engaged its outsourced partner four years ago to manage ticket sales and service via an on-campus center. In addition to season and group ticket sales, consultants were tasked with increasing donation-related revenue. At the onset of the engagement, the school had 6,500 active athletic donors, representing 2.5% of the living alumni base, with nearly half giving an average of just $266/year. The school’s full-time development staff of five focused on annual meetings and calls to higher-level donors giving $3,000+/year.
  
  Outsourcing provided the human capital necessary to call lower-level donors and build relationships using professionally trained consultants. Donation levels significantly increased, highlighted by ten $50K+ donors, a $400K gift for renovations, and a record-setting gift to the tennis program. Today, this lower tier of athletic donors yields $3.3M+ per year, 300% growth on the pre-outsourced base. Outsourced consultants also drove new gifts by talking to non-donors, establishing greenfield relationships and yielding first-time gifts of $2.5M during the first three quarters of 2019.
• One small west coast school without a football program began outsourcing its development efforts in 2017. Several crucial changes by the outsourced partner have significantly shifted development strategy. To incentivize giving, especially from alumni, consultants remind prospective donors of their time on campus. Relationship building allows consultants to demonstrate how the donors’ dollars will be used, citing specific renovation projects and student-athlete needs. Consultants make a push for donations on every sales call, offer multiple gift payment plans, and lock in multi-year season ticket-related donations, making commitment in the moment as easy as possible. Full-time consultants have driven nearly $1M of new and incremental ticket-related donation revenue to date.

Declining demand for college athletics tickets will likely continue as technological improvements make the at-home experience harder to beat. As part of the lengthy effort to balance checkbooks post-COVID, schools need to act now to modernize donor databases and outreach strategies. By employing an outsourced partner, athletic departments ensure that high quality development teams with years of ticket sales and service experience are building relationships and fans for life. Even when business as usual is interrupted, as in recent months, calls to express appreciation and concern maintain these valuable relationships. Outsourced staffs have proven they can increase active donor counts, upsell existing gifts, and bring more donors to the white glove threshold, making them the most effective and immediately available strategy to sustainably drive development growth and offset rapid expense inflation.

Jack Luce, jack.luce@theaspiregroupinc.com, is the Director of Strategy, Analytics, and Marketing at The Aspire Group. He previously spent six years as a strategy consultant in the telecommunications industry leading industry benchmarking research efforts.