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Minding the Money

January 31st, 2013 | No Comments | Posted in In The Spotlight

One might hope that the economic recession, which formally ended in 2009, is no longer inhibiting students’ educational pursuits — or, perhaps more realistically, not as much.

But an annual survey of freshmen suggests precisely the opposite: more students than ever (66.6 percent) say America’s economic condition significantly affected their choice of college — so the recession’s residual effects, at least, linger on.

And financial considerations are affecting students in more ways than just where they enroll. The survey also found all-time highs in the number of students who said that “to be able to get a better job” (87.9 percent) and “to be able to make more money” (74.6 percent) were “very important” reasons to go to college; that “being very well-off financially” is a personal goal (81 percent); and that “the cost of attending this college” (43.3 percent) and “not offered aid by first choice” (9.5 percent) were important reasons for choosing the college they are attending.

“When we start to see all those items stack up, that stands out to us,” said Laura Palucki Blake, co-author of this year’s “The American Freshman: National Norms,” an annual survey and report published by UCLA’s Cooperative Institutional Research Program. “That says to us, there’s a need for universities to talk about this and to say, ‘Here is the lay of the land with incoming first-years, and this is really an issue for them.’ ”

CIRP surveyed 192,912 first-time, full-time students entering 283 institutions of varying type and selectivity in fall 2012. (This year’s National Survey on Student Engagement, which includes students of all grade levels, also found a strong connection between financial worries and academic activity.)

Despite the considerably grim outlook this year’s freshmen have on money, Palucki Blake said there’s reason to think positively about it.

“I don’t necessarily see it as a negative. I see it as a reality, and I see it as an opportunity for colleges and universities to get out there and to say, ‘This may be why you’re coming to college…. but don’t let that limit you,’ ” she said. “The idea is to help students navigate these four years, and let them see their potential for long-term success.”

Only, judging by another finding of this year’s survey, freshmen might be navigating for longer than they think. Although the vast majority of freshmen (84.3 percent) believe they will graduate in four years, the report notes, federal IPEDS data from the respondents’ institutions suggest that only 40.6 percent will do so. Therein lies an important lesson for students and the colleges that enroll them, Palucki Blake said.

“They may be making their choices based on cost, but not realizing actually in the long term it’s going to cost them more because they’re going to be there an extra year,” she said.

Students should know institutions’ graduation rates before enrolling, Palucki Blake said, which means colleges need to share that information and have counselors open to honest discussions.

Although 76.7 percent of students report being accepted at their first-choice institution, only 59.3 percent enrolled there. As the report notes, that figure is significantly lower than it was three and four decades ago, when 75 percent of students went with their first pick.

Finances might also have something to do with the fact that fewer students live in residence halls this year (76.1 percent in 2012, down from 79.3 percent in 2011), and more live at home (17.2 percent this year and 15 percent in 2011). More than half of these students (57.3 percent) said the cost of their college was a “very important” reason to go there. They are also more likely to plan on working to help pay for college (55.6 percent, compared to 47.8 percent of students living in dorms).

That coupling suggests colleges should consider the availability of services for students who are living at home and working full time, Palucki Blake said, because they’re likely to be on campus far less than their peers.

Last year, the report noted that while students were more likely than the year prior to identify as “middle-of-the-road” politically (and thus less likely to call themselves “liberal” or “conservative”), their collective outlook on social issues leaned to the left. That held mostly true over the course of two presidential elections.

In 2008, 44.2 percent of men and 42.5 percent of women identified as middle-of-the-road. By 2012, those figures had risen slightly to 48 and 47 percent, respectively. Men identifying as liberal or far-left dropped from 30.3 to 26.4 percent; for women that number dropped from 37.4 to 32.3 percent. And for those identifying as conservative or far-right, the percentages actually rose very slightly, 0.1 percentage point for men, to 25.6 percent, and 0.7 percentage points for women, to 20.7 percent.

Students’ positions on hot-button social issues varied. While the number of those who agreed “strongly” or “somewhat” that abortion should be legal rose from 58.2 percent in 2008 to 61.1 percent in 2012, those who said “a national health care plan is needed to cover everybody’s medical costs” dropped from 70.3 to 62.7 percent. Although the number of students saying racial discrimination is “no longer a major problem in America” rose from 20.1 to 23 percent, more of them also agree that “students from disadvantaged social backgrounds should be given preferential treatment in college admissions”: 41.9 percent this fall, compared to 39.5 percent four years ago. Finally, more students say the wealthy should pay more taxes (64.6 percent in 2012, 60.4 percent in 2008).

Perhaps in a note to the former presidential candidate Rick Santorum and his ilk, the report makes an additional observation.

“A number of studies using CIRP data have pointed out that some students become more liberal in their political orientation during college,” it says. “Study after study concludes that any change in the political orientation that occurs among students during college is predominantly influenced by the political orientation of their fellow students, and the overall campus climate perpetuated by their peers, not by the political orientation of the faculty.”

Major Majors

The survey also inquired about students’ majors. Business was again the most popular, with 14.4 percent of students planning to study it. The next-most popular majors were the health professions (14.1 percent), biological sciences (12.6 percent), and engineering (10.4 percent).

Regardless of major, students this year continued an upward trend in academic “habits of mind.” Just over 57 percent ask questions in class, 50.5 percent revise their papers to improve their writing, and 41.8 percent report “frequently evaluating the quality or reliability of information.” The largest increase in the five years since CIRP began using this set of questions was found in the proportion of students looking up scientific research articles and resources – that’s up to 27.4 percent, compared to 22.1 percent in 2008.

And consistent with past years, more students say they were frequently “overwhelmed” by all they had to do their last year in high school; 30.4 percent of freshmen agreed with that statement this year, up from 28.5 percent last year. Women are more than twice as likely than men to agree (40.5 percent – the highest that figure’s been since the question was first asked in 1985 — compared to 18.3 percent).

The students who said they felt overwhelmed were also less likely to report high emotional health (40.2 percent vs. 67.4 percent for the non-overwhelmed).

“The obvious concern is that students who report feeling overwhelmed in high school might continue feeling overwhelmed in college,” Palucki Blake said, adding that the finding speaks to the need for colleges to provide good mental health services and student activities to reduce stress.

In a section on math preparation, the report notes a stark difference between students attending historically black colleges and universities and those at other colleges. A total of 12.6 percent of students at HBCUs completed calculus in high school, lower than the rates of students at private universities (47.3 percent), public four-year colleges (20 percent), public universities (33.8 percent), and private four-year colleges (28.1 percent).

While even more students at private universities came in having completed Advanced Placement courses in probability and statistics and AP calculus (48.9 percent), only 8.6 percent of students at HBCUs did. The group with the next-lowest rates in that category was students at public four-year colleges, 18.7 percent of whom completed the classes.

More HBCU students completed pre-calculus or trigonometry, but still at lower rates than others: 63.5 percent of students at HBCUs did so, compared to 85 percent of public university students and 91.2 percent of private university students.

But the report adds this note: while students at HBCUs are less prepared mathematically, other UCLA research has shown those institutions’ “effectiveness” in graduating students in science, technology, engineering and mathematics.

Allie Grasgreen

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Multinational MOOCs

January 30th, 2013 | No Comments | Posted in In The Spotlight

The rapid expansion of massive open online courses (MOOCs) has left many in international higher education asking how they can compete. With elite American universities dominating the emerging market, will foreign institutions be left behind?

“If you can’t beat ’em, join ’em,” some have decided. The California-based MOOC provider Coursera counts eight foreign institutions among its 33 university partners. Meanwhile, 12 universities in the United Kingdom have launched a new MOOC platform of their own. The Open University, a distance education institution based in London, recently announced the formation of Futurelearn in partnership with Cardiff and Lancaster Universities; the Universities of Birmingham, Bristol, East Anglia, Exeter, Leeds, Southampton, St Andrews and Warwick; and King’s College, University of London.

Initial marketing material for Futurelearn emphasizes its U.K. identity — asserting that the Britain should be at the forefront of advances in educational technology and stressing that, until now, U.K. universities interested in offering MOOCs have only had the opportunity of working with U.S.-based platforms. However, Futurelearn’s CEO, Simon Nelson, said the company is open to eventually working with universities outside the U.K.

“We are well aware that we are operating on a global platform, the Web, and one that doesn’t respect traditional national boundaries,” said Nelson, a veteran of the BBC Online. “If we build the Futurelearn MOOC product in the right way, then it might be applicable to a whole range of partners outside the U.K., as well as in the U.K. But of course you have to start somewhere. We wanted to get started by trying to marshal and organize the U.K. university sector, which has some of the leading global higher education providers within it.”

“MOOCs have been dominated to a good degree by U.S. universities and U.S. providers: whether you like it or not, it is simply a fact,” said Nigel Thrift, vice-chancellor of the University of Warwick. “I think there was a feeling that the British higher education sector is probably second in the world at this point in time and therefore it’s not a massive surprise that it might have a platform that’s based on that success. However, I don’t think there’s a view that this platform is going to be nationalistic.”

Coursera similarly started with only American university partners, but quickly broadened to include foreign institutions: the École Polytechnique Fédérale de Lausanne, the Hebrew University of Jerusalem, the Hong Kong University of Science and Technology, and the Universities of British Columbia, Edinburgh, London International Programmes, Melbourne, and Toronto. While these universities span the globe, they are all established research universities with lots of international connections.

Jeff Haywood, the vice principal of knowledge management at Edinburgh, said the university’s decision to join Coursera evolved naturally out of preexisting relationships between Stanford University (where Coursera’s two co-founders teach) and Edinburgh, particularly in the fields of artificial intelligence and computer science. “In other words, it wasn’t a cold call,” Haywood said.

The École Polytechnique is offering a French-language MOOC (about the computer programming language, Java), Coursera’s first MOOC in a language other than English. Andrew Ng, Coursera’s co-CEO, said one of his long-term goals is to offer all of Coursera’s introductory courses in multiple languages. Already, he said that many of the video lectures feature crowdsourced subtitles.

Ng said he hopes to continue increasing Coursera’s number of international partners, although the growth won’t be extremely fast, as the emphasis right now is on supporting the existing partners well. “It makes sense for us to partner with all of the best universities all around the world, especially given the language issue,” Ng said. “Coursera’s mission is to offer high-quality education to everyone in the world, and to actually make that happen, students will need content in different languages.”

Colleges view MOOCs as one strategy for engaging students from all over the world: Coursera’s enrollments are 34 percent American and 66 percent international. Nelson said that Futurelearn also hopes to attain a global audience: “This is not only targeted at U.K. learners,” he said. “It’s targeted at anyone all over the world, anyone with an Internet connection.”

Hong Kong University of Science and Technology, a Coursera partner, already works with four other Hong Kong universities to offer distance education through a platform called Hong Kong Virtual University. But Ting-Chuen Pong, a professor in computer science and member of HKUST’s task force on e-learning, said that while the Hong Kong Virtual University has been successful at attracting students from within the region, it’s proven difficult to successfully market the courses abroad. He said the reputations of HKUST’s Coursera partners – universities like Columbia, Princeton and Stanford – will help the university reach new global audiences. “The name recognition is very important,” Pong said.

Regarding the two other big U.S.-based MOOC providers, edX at this point does not have any foreign university partners, although on its website it expresses interest in exploring possible partnerships with universities from around the world. Udacity has worked with universities in Austria and Germany to facilitate the awarding of credit for its classes, and this fall signed a memorandum of understanding with the University of Alberta to form a research partnership. Researchers in Alberta’s Centre for Machine Learning and its Faculty of Education will be working with Udacity to conduct research on online learning technologies. Alberta will also be offering up to six MOOCs on Udacity’s platform this fall.

“It is kind of a scary thing to do because the revenue models [for MOOCs] are not well-formed yet,” said Jonathan Schaeffer, the dean of Alberta’s Faculty of Science and a professor of computing science, “It’s easy to build courses that cost lots of money but at the end somehow you’re going to have to recoup those costs either in the short or the long term. It is a gamble, but to me, universities are all about change, and I see MOOCs as being a very important, disruptive technology. I would rather be on the leading edge, understanding and working to establish a reputation for quality now, rather than two or three years from now, when everybody’s in the game and we’re all fighting over market share.”

Schaeffer added that he believes that MOOCs are a mechanism through which university reputations can be more quickly earned. “This is a brand-new, wide-open space,” he said. “With MOOCs all the sudden reputations can be won and lost.”

Elizabeth Redden

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Millions of US grads have jobs that don’t require college degree

January 29th, 2013 | No Comments | Posted in In The Spotlight

Students who graduated into the Great Recession have struggled to find work that fits their learning. But according to research released on Monday, millions of college graduates over all—not just recent ones—suffer a mismatch between education and employment, holding jobs that don’t require a costly college degree.

The study, from the Center for College Affordability and Productivity, says that nearly half of all American college graduates in 2010—some three years after the recession began—were underemployed, holding relatively low-paying and low-skilled jobs.

According to a report on the study, “Why Are Recent College Graduates Underemployed? University Enrollments and Labor Market Realities,” out of 41.7 million working college graduates in 2010, 48 percent—more than 20 million people—held jobs that required less than a bachelor’s degree. Thirty-seven percent held jobs that required no more than a high-school diploma.

The report’s authors—Richard Vedder, Jonathan Robe, and Christopher Denhart—used employment data from the U.S. Bureau of Labor Statistics to calculate that the number of college graduates is growing at a rate disproportionate to the number of jobs requiring a college degree. They question whether America spends too much on higher education, and ask whether society can afford to subsidize higher education for graduates who end up in jobs they could have landed without going to college.

“Student-loan programs and federal assistance programs are based on some sort of implicit assumption that we’re training people for the jobs of the future,” Mr. Vedder, director of the center and a professor emeritus at Ohio University, said in an interview. “In reality, a lot of them are not.”

The Bartender With a B.A.

While most of the analysis centers on broad categories, such as college graduates compared with high-school graduates, the authors also studied differences in graduates’ success rates by university and major, using salary data from Payscale.com.

The report notes variations in earnings depend on the type of college graduates attended and the type of degree they obtained. Those who graduated from elite private institutions fared better than those from state flagship universities and other public universities, on average, and those who majored in engineering and economics earned more than those in the humanities.

One way the authors tracked the growth of what they call underemployment was by comparing statistics from the 1970 Census to the 2010 figures from the Bureau of Labor Statistics. The authors selected six occupations in which, they say, the skills required have not drastically changed over the last 40 years—taxi drivers, shipping and receiving clerks, salesmen and retailers, firefighters, carpenters, and bank tellers. In 1970 less than 5 percent of firefighters held a college degree, but by 2010 the share had jumped to 18 percent. Similarly, only 1 percent of taxi drivers in 1970 were college graduates, but by 2010 more than 15 percent were.

The report also cites other research to generalize the trend of underemployment among college graduates. For example, one study based on data from the Current Population Survey calculated that the percentage of underemployed college graduates rose from 10.8 percent in 1967 to 17.5 percent in 1990.

“We have noted for several years a disconnect between the number of graduates and the realities of the labor market,” Mr. Vedder said. “It isn’t like underemployment was growing slowly and shot up in the last five years. It has been a steady rise.”

Mr. Vedder said the number of college-level jobs is growing at a slower pace than the number of college graduates, and it will continue to grow more slowly if government data prove to be true.

Mr. Robe, a research fellow at the center, said that the “bartender with a bachelor’s degree” is a classic example of the lack of jobs that require a college education. Many college graduates who take jobs as bartenders or taxicab drivers have better options, he said. But vacancies in those occupations tend to be filled by other college graduates, a trend that slowly crowds out high-school graduates and dropouts.

“Maybe we should incentivize colleges to more accurately counsel students,” Mr. Vedder said. “If you get a degree in business administration, you may not necessarily walk into a middle-class life. There’s a good chance you may end up being a bartender.”

Allie Bidwell

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Spotlight on Microsoft: A Leader in Corporate Giving

January 28th, 2013 | No Comments | Posted in In The Spotlight

Microsoft Logo

Many people know about the philanthropy of Microsoft founder Bill Gates. The innovative genius behind the tech giant has given billions of dollars to alleviate poverty worldwide and created the Bill & Melinda Gates Foundation with his wife. Founded in 1994, the organization has taken the lead on a number of initiatives that range from increasing accessibility to internet in the United States to improving health in the developing world.

The Evolution of Microsoft’s Corporate Giving Programs:

Bill Gates’ philanthropic spirit remains engrained in Microsoft despite the fact that he has stepped away from a direct role in the company. Microsoft’s corporate giving program has existed since 1983, when 200 employees raised $17,000 for nonprofits. Today, Microsoft’s workforce has ballooned from 200 to 35,000 employees.

The $17,000 originally raised by Microsoft employees gave way to an employee giving program that has raised over $1 billion dollars in 20 years. Microsoft hosts over 300 events to encourage fundraising from its employees including a 5k race and an online auction.

The Bill and Melinda Gates Foundation’s Employee Giving Programs:

Bil and Melinda Gates Foundation Text

Bill Gates took the success of Microsoft’s corporate giving program with him when he started the Bill & Melinda Gates Foundation. Incredibly, Bill and Melinda GatesFoundation will match employee donations at a 3:1 ration on top of the millions the organization already donates.

Any employee who makes a donation to a nonprofit of as little as $25 or as much as $30,000 is eligible to have their donation quadrupled by the foundation.

Matching Gift Programs Across the Tech Industry

Microsoft’s corporate giving program has been highlighted by our blog before.Microsoft’s generous volunteer grant program offers $17 for every hour a Microsoft employee volunteers with a nonprofit.  Since its inception in 2005, Microsoft employees have donation over 2 million hours of their time corresponding to millions of dollars in grants to nonprofits.

Microsoft also has a robust matching program that will match up to a $12,000 donation from an employee to most nonprofits. These amazing benefits don’t just apply for current full time employees. Part-time or retired employees who donate time or money to a nonprofit of their choice can also see a matching donation made by Microsoft on their behalf.

 

Microsoft is just one example of many corporate giants that are combining smart business with smart philanthropy. Companies everywhere in and outside of the tech industry are willing to match employee donations to nonprofits. For example, here are a few other tech companies which match donations from employees:

Unfortunately, this information can easily be lost in a maze of corporate handbooks and regulations. At Double the Donation, we work with nonprofits to help them maximize fundraising from employee giving programs.

Other Leaders in the Corporate Giving Space

Over the past few months, we’ve highlighted a few other companies with similarly strong corporate giving programs. If you’re interested, explore a few other companies which invest funds into community organizations which employees support:

  • Expedia is continuously enhancing their employee giving programs by allowing employees across the globe to participate.
  • BP enables every American employee to provide a $300 no-strings-attached grant to a nonprofit of his or her choosing.
  • Apple is one of the newest entrants in the employee giving space.

Double the Donation

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How Often to Email in 2013

January 24th, 2013 | No Comments | Posted in Email, Marketing

I get this question a lot: How often should we email? What’s too much, what’s not enough?

It’s a complicated question with lots of variables. For example, the more relevant and valuable your content is to those on the receiving end, the more you can email them. You can make your content more valuable and relevant in a few different ways, one of which is by sending the right stuff to the right people. That requires you to track information about people so that you can segment your mailing list.

To give this question a little context, let’s look at what we found in the 2013 Nonprofit Communications Trends Report.

How Often Nonprofits Will Email in 2013

Monthly emailing to a typical person on an email list is the most popular frequency expected by nonprofits in 2013 at 42%, followed by every other week at 17%, quarterly at 15%, and weekly at 14%. This changed only slightly from 2011 and 2012. More than three-quarters of nonprofits (76%) plan to email their typical supporters at least monthly, which is down slightly from 78% in 2012 and up from 75% in 2011.

Not surprisingly, the more important a nonprofit believes email to be as a communications tool, the more frequently they will email. The more likely they are to say they will spend most of their time on email fundraising or advocacy appeals or email newsletters, the more frequently they expect to email supporters.

Of the nonprofits that ranked email as a “very important” tool for 2013, 84% will email at least monthly, with 39% emailing every other week or more. On the other hand, of those ranking email as only “somewhat important,” 70% will email at least monthly (up from 66% in 2012) and 29% will email every other week or more (up from 22% in 2012).

Of the nonprofits that said they would spend most of their time on email newsletters, 83% said they would email at least monthly. Of the nonprofits that said they would spend most of their time on email fundraising or advocacy appeals, 77% will email at least monthly.

 How does what you are doing compare to these numbers?

KIVI LEROUX MILLER

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The Permanent Disruption of Social Media

January 23rd, 2013 | No Comments | Posted in How Not For Profits, Social Media

Social media has chipped away at the foundation of traditional donor-engagement models. A new study highlights the realities of donor behavior and how organizations can redesign their outreach strategies to be more effective.

social_media_disruption 

(Illustration by Andrew Bannecker)

Spending an entire workday on Facebook isn’t part of a typical nonprofit employee’s job description. There are programs to run, decisions to make, funds to raise—all higher priorities than the online world of status updates, tweets, pins, and check-ins.

But for one day last fall, all of the people who work at For Love of Children (FLOC) spent all of their time on Facebook. At the end of the day, the organization was nearly $114,000 wealthier. As a participant in Give to the Max Day: Greater Washington, FLOC rallied its supporters to donate $87,000 during the one-day competition, earning it additional prize money from contest organizers for having raised the most donations. For FLOC, Give to the Max Day provided more than just much needed funds. It brought an influx of new donors—many of whom were first introduced to the organization by their friends using social media.

FLOC isn’t the only nonprofit taking advantage of social media to raise money, garner new supporters, and increase visibility. One of the most popular—and controversial—nonprofit campaigns of 2012, Invisible Children’s KONY 2012 video, was also fueled by social media. The video has been shared more than 2 billion times on Facebook and Twitter since it went live in March. The vast majority of the people watching the video had never heard of Joseph Kony before the campaign, and it’s unlikely that they will ever have contact with the organization again. But the impact the campaign had on public awareness of the issue was incalculable.

Until recently the models that nonprofits used to find, engage, and cultivate donors, volunteers, and other supporters were reasonably straightforward. The first step was to use direct mail, phone calls, or other techniques to bring in large numbers of potential supporters at a low level of engagement. These supporters were sorted into neat groups, and the most promising people were continually moved up the pyramid or ladder and cultivated for larger and larger donations. It was an orderly and linear process. Today, the Internet and social media have permanently disrupted the traditional donor-engagement process. Online competitions, viral video campaigns, mobile giving—with each new way for organizations and donors to interact come increasingly complex entry points into the traditional models of donor engagement, greater variation in movement along the pathway to deeper engagement, and more opportunities for a person to be influenced by forces outside an organization’s control.

To better understand the impact that social media is having on donor engagement, we conducted a nationwide research project. We learned that donor behavior and communications preferences have changed because of social media. And as a result, the traditional donor engagement models are no longer sufficient. In their place we need to create a new model of donor engagement, one that is more fluid and continuous, and that better reflects the growing importance that a person’s influence (and how she uses it) plays in the process.

The Traditional Donor-Engagement Model

Pyramids, ladders, funnels—all have long been used as organizing devices and models in the donor-engagement process. Their beauty is in their simplicity; donors exist at a single level at a given point in time and progress predictably up the rungs or levels through carefully calculated outreach and engagement by the organization.

At each level, increasing efforts to engage a person result in increasing commitments (and a drop-off of people who will attain that next level). Those at the bottom are thought to be less engaged than those nearer to the top. People at different levels take different actions and donate in differing amounts; therefore, different communications tools are associated with the levels or rungs. Low-touch or automated tools like direct marketing are at the bottom, and more time- and labor-intensive tools like personal outreach are reserved for only the upper echelon.

The assumption of the traditional donor-engagement models is that the great majority of people enter at the bottom. There is an initial period of time during which the person gets to know the organization and the organization gets to know the person. The organization may ask the person to get involved in some small way, like volunteering for or participating in an event, forwarding an e-mail to friends, or signing a petition. Then—and only then—will they make the “ask” for a small financial gift. This is followed by stewardship and deeper engagement, further research into the person’s capacity to give, and eventually, an ask for a larger monetary gift.

In theory, the cycle continues until the person reaches the top of the pyramid or ladder.1 With each subsequent cycle, forward (or upward) progress is made. A person can neither drop down to a lower level of engagement nor be in more than one level of engagement simultaneously. The culmination of this cultivation? Presenting a person with the perfect ask at the perfect time—with meticulous research informing just how much money to ask for and when.

Social Media’s Impact

The traditional pyramid and ladder models of donor engagement have persisted into the age of social media, as organizations try to make sense of how to use the new tools and what advantages—if any—they hold for fundraising. The consensus among development professionals is that the various types of social media have yet to be proven as effective, stand-alone fundraising tools; few direct asks are being made via these channels today. Yet these social media channels are the very ones that increasing numbers of people use to gather and process information today—young people in particular.

“Social media has created a dilemma around how we reach people,” says Shaun Keister, vice chancellor of development and alumni relations at the University of California, Davis. “We can’t solicit directly on social media—yet that’s where people are doing their business, it’s where they’re networking, it’s where they’re getting their information and making a lot of decisions in their lives.”

The approach many organizations have taken is to integrate social media into the traditional pyramid and ladder models—occupying the bottom rungs—and use it to build awareness and foster the beginnings of a relationship with the organization. Social media is not used as a way to engender or demonstrate real depth of commitment. “Liking” a cause on Facebook, blogging or tweeting about it, or adding an organization’s logo to a social profile are all thought to be gateway actions.

The goal is still to move the casual Twitter user up the ladder to become a legacy donor—but there is little understanding of the pathway this person will take and the best way to navigate the pathway using the new mix of online, offline, mobile, and social media tools. An even bigger question is whether social media is even the best use of a person’s or organization’s time and resources.

Despite the efforts to meld the old and the new, there is an inherent disconnect between the static pyramid and ladder models—even those updated with social media—and the dynamic ways in which people interact with causes today. That is why we need to create a new model of donor engagement. But first, it’s important to better understand the changes in how people engage with organizations and causes today.

New Types of Donor Behavior

To better understand the new world of donor engagement, Georgetown University’s Center for Social Impact Communication and Ogilvy Public Relations Worldwide partnered to conduct a quantitative study of Americans to learn how social media has changed the ways people interact with and support the causes and social issues they care about. The survey was conducted in late 2010 with a nationally representative sample of 2,000 people age 18 and older.

Although the results certainly don’t imply that organizations should abandon all traditional means of donor outreach and engagement in favor of Facebook, Twitter, and the like, they did reveal important insights into how the traditional models are falling short, both in their discrete categorization of donors and behaviors and in the ways that organizations communicate with their stakeholders.

Survey respondents reported an average of nearly five ways in which they first become involved with supporting causes. The top five ways are donating money (40 percent), talking to others about the cause (40 percent), learning more about the cause and its impact (37 percent), donating clothing or other items (30 percent), and signing a petition (27 percent). Entry points for engagement weren’t confined to a particular level or rung on a ladder, but rather reinforced our hypothesis that people enter at various levels—or even multiple levels—of engagement.

Interestingly, when asked in our survey about the ways in which they most often get involved with causes or social issues, the respondents’ answers look strikingly similar to how they first get involved. This alignment could be an indicator that people aren’t necessarily progressing up a ladder but instead tend to remain at the level(s) at which they are first engaged.

Social media-driven actions are conspicuously absent from the ways in which Americans first get involved with causes. This goes against the updated models that often classify these actions as the gateways at the bottom of the ladder. For example, only 9 percent of Americans first get involved by joining a cause group on an online social networking site like Facebook; other social media actions, like posting a cause’s logo on a social profile (6 percent of respondents), and blogging about a cause (4 percent) ranked even lower. These types of activities (and the people who perform them) are commonly lumped together under the heading of “slacktivists,” and the assumption is that they replace more traditional (and, from an organizational perspective, more valuable) forms of engagement like volunteering or donating.

Although this might be true if these were the only types of activities these people undertook, we found in our study that these slacktivists actually supplement—not replace—donating and volunteering with promoting the cause on social media. Moreover, they apparently perform these actions after already having been engaged with an organization. So for this group of people, it’s very likely that they first donated or volunteered, and then progressed down the ladder, so to speak to engage with the organization on social media.

There is very little room in the traditional models for this type of backward motion. In fact, organizations looking to the traditional models may actually think of this downward movement as a bad thing—as if these people are somehow less engaged because they are using social media now.

In practice, it turns out, a person’s engagement with an organization is generally more continuous—and messy. It doesn’t stop and start with discrete levels, and with the broad range of activities available to potential supporters today, it’s actually preferable for people to be engaged on multiple levels.

Communication Changes Too

In the same way that the traditional models don’t fully represent donor behavior today, they also promulgate a somewhat limited and outdated view of how organizations should communicate with donors. The models encourage the segmentation of communications tactics—social media, e-newsletters, and other automated channels at the bottom, and personal outreach, face-to-face meetings, and other labor-intensive, high-touch channels at the top. In practice, segmented communications strategies are quickly losing ground in a world in which the boundaries between offline and online, traditional and nontraditional media are blurring.

Our survey results showed that traditional media (such as television, newspapers, and magazines) are still the way that most Americans learn about causes and social issues (70 percent of respondents agreed that they learn about causes from these sources). But social media and online channels have sizable audiences as well (47 percent of respondents agreed that they learn about causes from these sources).

The most successful organizations are those that embrace communications strategies that integrate online and offline channels. It’s about creating what Jennifer Wayman, executive vice president and director of social marketing at Ogilvy Washington, calls a “surround sound” experience—one that uses various channels in people’s everyday lives and increases opportunities to both introduce and reinforce messages.

It is also important that organizations use new forms of media to communicate continuously. Direct mail or even e-newsletters can be valuable conduits of information for organizations, but the power of social media is its ability to provide continuous and timely communications.

The traditional models also fall short because they are inherently one way—from the organization to the person. A person’s commitment to an organization can depend on many factors that are outside the control of the organization. A donor’s peers can greatly influence her actions and deepen her commitment. Likewise, a donor can have great influence on her peers. Our survey results highlighted the role of influence in driving involvement in causes; 39 percent of Americans responded that they’re motivated to get involved with causes that have affected someone they know, and 36 percent said they’re motivated by it being an important cause to family and friends. Both were among the top five responses, and both outweighed factors like having the time or money to get involved or feeling an urgency to help those in need.

“Organizations need to recognize that they are not their best messengers anymore,” says Katya Andresen, chief strategy officer at Network for Good. “When you rank the potential forces on a donor’s decision to give, family, friends, and peers rank higher than anything.” Fundraising professionals and organizations accustomed to operating according to one-dimensional models that do not account for the variable nature of peer-to-peer influence are at a significant disadvantage.

Creating a New Model

Given what we know about the shortcomings of the traditional donor-engagement models, it is possible to begin to construct the outlines of a new model that takes into account the changes in donor behavior, communications, and influence. The new model should incorporate the following characteristics of donor engagement:

  • Allows for a donor to be engaged at different entry points and to move easily between them during the life cycle of his engagement
  • Has no fixed end point for a donor’s engagement
  • Allows for the donor-engagement footprint to expand or contract in ways that are unique to and driven by the individual donor
  • Places the donor’s needs—not the organization’s—at the center of the engagement
  • Accounts for the influence of other people on the strength of the donor-organization relationship

The best visual representation of this new model is a vortex, rather than a pyramid, ladder, or funnel, which are used to represent the traditional models. (See “Donor Engagement Models,” below.) At the center of the vortex is the individual. Her depth of commitment to the organization (formerly how high up she is on the ladder) is represented by the size of the continuous field around the center. As the person’s commitment deepens, the vortex expands outward. The vortex can be strengthened—and expanded—by the influence of others, but as it grows it also becomes a greater source of influence on others.

donor_engagement_models 

In a vortex there are no discrete steps upward or downward or levels to progress, but rather a continuous flow of communication and engagement that begets further communication and engagement. And there is a noteworthy absence of a fixed goal (the equivalent of the pinnacle of the pyramid), recognizing that there is more than one route to maximizing a person’s support of a cause or issue.

Adopting a model such as this requires organizations to change the way they think about their donors and potential donors, and how they both assign value to and ask for contributions from these groups. It also requires organizations to change the ways in which they train and empower all their employees to engage with their stakeholders.

Redefining Contributions

The first change that an organization needs to make is in how it defines a person’s contribution to the organization. Although the pyramid and ladder models tend to emphasize a singular call to action (donate money), a vortex model allows other types of contributions from supporters to be valued.

“I think increasingly philanthropists—whether individual, corporate, or private—are looking at a cause and asking the question: what is the best way to get a result?” says Susan Raymond, executive vice president for research, evaluation, and strategic planning at Changing Our World. “And it may not be writing a check, and it may not be volunteering. It may be other forms of resource mobilization.”

Survey respondents were asked what makes them feel like “cause champions”—defined as being very involved in a cause or social issue. Donating was the top response (33 percent), followed by talking to others about the cause (26 percent) and volunteering (22 percent). A majority of respondents (57 percent) chose offline activities, with only a small minority choosing online activities (19 percent) or social networking (10 percent).

Among the 10 percent of Americans who said that a social media activity made them feel like a cause champion, the list of top responses looks quite different from the majority of Americans.’ Talking to others about the organization or cause tops the list (49 percent), followed by joining a cause group on Facebook (43 percent), donating (39 percent), asking someone else to add a cause logo to a social profile (37 percent), and signing a petition (35 percent).

As you can see from the survey data, when organizations emphasize financial donations as the primary means of support, they may be doing so at the risk of discouraging other types of supportive activities—many of which have the ability to expand significantly the influence of the person at the center of the vortex, and therefore increase the contributions of others.

There is a parallel shift occurring in the for-profit sector, as more and more consumers turn to social media and online channels to talk about and share their experiences with products and services. As Paul Smith and Ze Zook wrote in their book Marketing Communications, “the ideal customer, or most valuable customer, does not have to be someone who buys a lot. The ideal customer could be an influencer who is a small irregular buyer but who posts ratings and reviews, as the reviews could influence another 100 buyers.”2

For a nonprofit, this valued supporter could be the small donor—with the big network or degree of social platform savvy—who is able to influence others to give well beyond her own capacity. Where the traditional models might write this person off as having a low lifetime value and not worth an organization’s time and investment, a model that takes influence into account will value that person more highly.

The whole concept of lifetime value would be reimagined in a vortex model. Where lifetime value has traditionally been a combination of average donations, future capacity to give, and attrition rates, now lifetime value could incorporate factors like the size of the person’s network, her propensity to share and influence that network, and her skill in doing so.

Diversifying Calls to Action

Once an organization begins to define and value contributions differently, it can begin to diversify the types of calls to action it asks of its supporters. As our research shows, organizations basically get what they ask for. Ask only for financial donations, and that is what people will think is their deepest level of involvement. But ask for more—sharing on social media, forwarding e-mails to friends, advocating for the organization, organizing and leading fundraising events—and a person’s contributions, as well as her sense of having an impact, can grow exponentially.

It’s no coincidence that the two most successful organizations on Give to the Max Day: Greater Washington, FLOC and Little Lights Urban Ministries (which raised $79,000 in donations and prize money that day) used nearly identical calls to action in their donor communications. In addition to donating, each organization asked supporters to share the e-mail appeals with their personal networks and to post information about the organizations’ efforts in the contest on social media. Both are relatively easy tasks that require minimal effort, but can reap tremendous benefits for an organization.

In our research we found that Americans do recognize the value of social media tools in facilitating increased cause engagement; more than half of those surveyed agreed that online social networking sites allow people to support causes more easily. And as we saw in the earlier data, slacktivists who are willing to use digital tools to promote an organization or cause are a desirable group to have. They are just as likely to donate as non-social media promoters, are twice as likely to volunteer or participate in an event or walk, and are more than three times as likely to solicit donations on behalf of a cause. They also participate in, on average, nearly twice as many different kinds of support activities as the average American.

Because there are so many different activities that people can be involved with, organizations need to be strategic about what they ask supporters to participate in. To better understand the relative importance of different types of activities, we categorized them in two dimensions: level of involvement (how much of a personal investment in time, resources, and reputation a person makes), and level of influence (how likely it is that completing that activity alone will sway someone else to get involved).

Donating money, for example, has a relatively high level of involvement (assuming a reasonably substantial contribution), but a low level of influence (if a person donates, but tells no one, it doesn’t compel anyone else to take action). Forwarding an e-mail to friends about a cause has the potential to influence other people to get involved, giving it a high influence value, but a lower value for involvement because it’s a relatively easy task. (See “Valuing Support Activities,” below.)

valuing_support_activities 

There is a noticeable lack of activities that fall into the low involvement, high influence quadrant, because for an activity to be influential, it needs to be grounded in authenticity and personal commitment. A person can be involved but not influential, but can never be influential without being involved.

The goal for an organization using the vortex model is to offer its supporters a tailored portfolio of involvement that speaks to their strengths and ability to have an impact. This in turn will maximize the person’s commitment and lifetime value, and strengthen the core of the vortex and its ability to influence others. What was a model designed to prepare each individual donor for the annual ask now becomes a continuous conversation in which varied engagement opportunities can be presented throughout the life cycle of the donor.

Sustaining Continuous Communication

Being in continuous communication with donors can seem quite daunting because of the amount of time required. The way to do this is to encourage everyone in the organization to be a communicator. Most organizations equip board members with basic elevator speeches. Some may hold trainings for board and staff to provide guidelines on messaging. But very few embrace the “everyone is a communicator” idea fully—and those that do have a tremendous advantage.

“Give to the Max really highlighted the importance of everyone in-house being an ambassador for your organization,” says Andrea Messina, director of development at FLOC. “We have communications trainings for staff—everyone learns what messages are and what our elevator speech is.” FLOC provides all staff with guidelines on how to tell the FLOC story to different audiences, in one sentence and in one page. Each staff meeting ends with a specific call to action so that people are aware of what’s going on at the entire organization, not just within the confines of their job.

Communications can also be carried on by an organization’s supporters. An organization that does this well is charity:water, which has had tremendous success in mobilizing its online supporters to raise funds to provide safe drinking water to people in the developing world. “The reason it comes to them very naturally is that the organization is founded on the very principle of being a network of networks,” says Andresen. “It is set up to turn the role of fundraiser from an internal function of the organization to a role that’s shared by everyone in their community.”

For organizations that don’t come by this networked mentality easily, online supporters can be identified, trained, and managed like any group of volunteers. FLOC monitors social media to find potential ambassadors. “I can spend a few minutes on Facebook every day and see people who are posting and liking every time,” Messina says. These are the people whom FLOC recruits to be online ambassadors.

What causes most organizations to hesitate in empowering these external ambassadors is the loss of control. “There’s a certain amount of the ‘they’re not going to say it the way we’re going to say it’ mentality, but the cost-benefit ratio is still going to be positive,” says Mark Rovner, founder and principal at Sea Change Strategies. And perhaps with the loss of some control comes an increase in authenticity and transparency, both qualities that can greatly enhance an organization’s overall communications.

Looking Ahead

Our hypothesis going into the study was that social media has revolutionized the ways in which people get involved with causes. In short, it hasn’t. But it has certainly changed the ways in which people can influence others and increased the range of meaningful calls to action available to nonprofits. Continuous communication is now an expectation—if not a demand.

The full impact of these changes on the traditional donor engagement models is not yet known. It’s clear, however, that new ways of thinking about donor behavior should incorporate measures of influence and better account for the fluid and dynamic ways in which people support causes. Even as our understanding of true influence continues to evolve, organizations can begin to respond to these shifts by rethinking their definition of a traditional contribution and diversifying their calls to action.

“People are going to take very different approaches to solving problems as this whole area of social engagement evolves,” says Raymond. “There will be people who will never be on anybody’s pyramid or ladder … and they’re equally valuable in the sector, equally valuable as leaders—they just come with entirely different sets of optics.”

The challenge for organizations is finding ways to maximize the contributions of different groups of people with unique desires and resources. One thing is for certain. The pathway into the digital future is not going to be a linear journey up a ladder or pyramid.

Julie Dixon & Denise Keyes

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Three Simple Ways to Improve Your Online Fundraising

January 22nd, 2013 | No Comments | Posted in How Not For Profits

It’s 2013.  As a nonprofit focused on fundraising, you’ve likely started making resolutions to improve, diversify or broaden your fundraising.  As you plan or refine your strategy, I challenge you to consider these three simple changes to improve the results of your online giving!

And don’t fret.  These tips are easy and completely doable without a ton of time or website expertise.  Sure, you could expand on each of these and really revolutionize your online efforts, but let’s start small.  You likely have enough on your plate as you move into a new year with new goals, commitments, resolutions and expectations.

First off, let’s set a deadline.  By March 31st, make these three changes and report back with your findings.  We’d love to hear how things went!

1.  Add a CLEAR, DIRECTIVE ASK on your homepageCharityWaterAsk 365x221 Three Simple Ways to Improve Your Online Fundraising

As a nonprofit, your number one reason for professional (and sometimes personal) existence is to serve your mission.  You work toward it every day, in everything you do, and in every form of communication you make. You educate, you inform, you advocate, you serve,  you share.  And you ASK for help.

At the risk of sounding like Captain Obvious, getting the help you need starts with something very simple.  The ASK.  But, are you doing it with as much purpose and clarity online as you are in person?

First off, your website is used to engage…to draw people in.  Nonprofits often use rich, engaging imagery that pulls on the heartstrings and connects with your users.  If fundraising is a top priority for you, make SURE you’re capitalizing on their attention by putting an ASK in the imagery they’re drawn to!

A simple “Donate now”, “Give to a Child in need” or “Support us” call to action placed within an engaging image on your homepage will not only draw someone in, but will make them much more likely to take the action  you want them to take.

2.  Remove obstacles to action

47% of people who visit a website intending to make an online donation give up before completing the process (source)

With this in mind, it’s important to understand that people are busy! Even if they’ve already decided to donate to your organization, they may not actually complete the transaction before being called away by a work interruption, meeting, phone call or worse yet, frustration.

RemoveObstaclesImage 365x229 Three Simple Ways to Improve Your Online FundraisingSo make it EASY on them.  Include as FEW fields in the online giving form as humanly possible. Would you like to know their full biographical history, demographics and life story with their first gift?  Sure.  But leave those questions for the follow up.

Make sure their full transaction is one click away.  When they click “donate,” they should be able to make their full transaction on the very next page.

Just last week I clicked to donate to a nonprofit and first was taken to a page that described all of the giving options I had (planned giving, online gift, check, download PDF form, etc.).  Three clicks (and lots of reading) later I was being asked what credit card I wanted to use and I just gave up. Don’t let this happen to you!  Keep it quick and simple and you’ll lose less donors.

3.  Perform a simple A/B test.

ABtesting 297x234 Three Simple Ways to Improve Your Online Fundraising

A/B testing is comparing two (or more) variations of the same content determine which one performs better.  Check out this article from Smashing Magazine (they get credit for the image too) to learn more details about A/B testing.

Google has made it easy for nonprofits to test and analyze their own website content through content experiments, which allows you to make small changes to content on your website, see which one performs better, then make the more successful option permanent.  It’s that simple.  Here are some ideas to get you started:

  1. Giving terms:  Try testing donate, give and support to see which performs best?  Or even better, assign a tangible to the gift and test “Donate now” against “provide a meal to a family today” to see if the tangible element inspires more action
  2. Colors:  Try two different colors for your donation button on your homepage.    You’ll be surprised at how much it may affect click rates.
  3. Add the Why:  Try adding a quick blurb about how donations are spent or your current funding priorities above the same donation button to see if it’s inspires more clicks!

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Nonprofit Fundraising: Don’t Worry, Be Happy

January 21st, 2013 | No Comments | Posted in How Not For Profits, In The Spotlight

Even though Congress is still considering a tax overhaul that might include cuts in tax deductions for charitable giving, if you support or work for a nonprofit, you can stop worrying.

No matter what Congress does, there will always be a desire in human beings to make a difference. As long as you don’t become hopeless, you can help people respond to the high and good within themselves. People will always want to be remembered. There will always be individuals who are willing to step up when there’s a need, because it is in giving that we receive. (Thank you, St. Francis of Assisi.)

One of the best nonprofit leadership tips I have received came from 8th century BC China: “The joyous mood is infectious and brings success.” This was written long ago in the I Ching and it is true today. According to the I Ching, intimidation will work sometimes but not for long. On the other hand, when hearts are won by friendliness, people will take on all hardships, even death itself, so great is the power of joy over people.

If it is true that people will take on all hardships through joy, then the harder your work is the more you need to lighten up. The greater the threat, the more you need to drop the dread. During World War II, President Roosevelt hosted a cocktail hour every afternoon in the White House. The discussion was not about war. People told jokes.

If you think this advice is too small when you have big fundraising ideas, consider this: One seed contains the potential of 10,000 forests. Small things can make a huge difference. A church in upstate New York that I worked with on fundraising went from deep in debt to solvent within three months, simply by becoming more welcoming. Among many of the things that we did to be welcoming was to offer interesting programs and invite the public. The first was a course called “Learn to Sing.”

I was helping the minister post information about the course on the church sign and was not finished when my mobile phone rang. Because the reception was weak, I walked behind the church to take the call. When I returned, a group of teenagers were standing on the sidewalk in front of the church pointing at the sign and laughing. The big white and black letters on the church sign read: Learn to Sin.

Small things make a big difference. On a subtle level, we relate subconsciously to others. At a time of crisis, be careful not to subconsciously communicate your hopelessness. The moment you begin to worry is the moment you begin to lose control of the leadership of a nonprofit organization.

You know whining or complaining that “Nothing works!” leaves you disappointed. At the same time, you can’t force happiness. Joyousness comes from being free of desire. People can smell ‘desire’ a mile away. When you are full of desire, you’ll find yourself in a weak position. The people you are trying to influence won’t pay attention; they’ll ignore you, or not notice you at all. Of course you want people to volunteer and donate, but if you are needy, people will withdraw from you.

How to Ask for Donations: 3 NonProfit Fundraising Tips

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1. Develop your Detachment: If you act needy, people will run away from you. Establish good relations before you ask for a donation or you’ll be denied.

2. Offer an Opportunity: You are not “hitting people up for money.” You are giving them a chance to be of service, to be part of a greater good. Ask previous donors what they received from giving, and then offer that.

3. Request and Retreat: They don’t give if you don’t ask. It is usually a brief period when you can influence people. When that moment wanes, withdraw and wait. If you ask (but don’t push) people will be more willing to say YES to you.

Whatever Congress decides to do about tax deductions for charitable giving, if you are raising money for charity and you follow these simple nonprofit fundraising tips, you’ll be happy. You won’t have to worry.

Shar McBee, Motivational Speaker and author

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Use of Wills and Trusts Down Sharply. Cause for Alarm?

January 18th, 2013 | No Comments | Posted in Fundraising, Planned Giving

The percentage of older Americans with a will or trust has plummeted in just a dozen years. If people do not have a will, they cannot include a charitable bequest commitment in it. So, should the latest findings from Texas Tech researcher Russell James, JD, PhD set off alarm bells for planned gift fundraisers?

In his newest book, American Charitable Bequest Demographics (1992-2012), James observes that 61.2 percent of those age 55 and over had a will or trust in 1998. By 2010, that figure had fallen to just 40.8 percent. For 2012, the projection is 40.0 percent.

Decline of Will & Trust Use - Russell James copy

There are two possible reasons for the sharp decline.

In many jurisdictions, individuals can use non-probate transfers such as transfer-on-death or pay-on-death designations. While traditionally used for financial accounts, such designations are increasingly available for automobiles and real estate. Designations can, in many cases, allow for the complete transfer of an estate without the use of either a trust or probate process.

Another factor might be the substantial increase of the estate tax credit over the period examined. In 1998, the estate tax credit exempted $625,000 of assets while by 2010 the (at that point optional) exemption equivalent had risen to $5,000,000. James points out, “In addition to the direct impact on planning for those no longer subject to estate taxation, there may have been a spillover impact as estate tax planning issues gradually became less discussed in popular press venues.”

James explored how the sharp decline in the use of wills and trusts has affected charitable estate giving. While significantly fewer people had a will or trust during the period examined, those that did were more charitable. In 1998, 8.28 percent of wills or trusts, among those 55 and older, had a charitable provision. By 2010, that had increased to 10.12 percent. James believes the increase could be due to “growing levels of education and childlessness among this age group as both have been associated with increased likelihood of charitable estate planning.”

Fortunately, for the nation’s nonprofit organizations, these two different trends have offset each other. The percentage of all Americans age 55 and over who have made a charitable estate commitment has remained consistently between five and six percent since 1998.

There might also be another positive dimension that has not been examined. The study did not include an analysis of the charitable component of transfer-on-death designations. It could be that this represents a significant source of charitable giving. At the very least, it’s certainly a great source of potential giving.

While there is no cause for panic, the nonprofit sector should be concerned and must re-examine how it markets planned giving. Talking with a prospective donor about including the charity in her will might not be appropriate. She might not have a will or want a will. Therefore, focusing on a gift in a will would result in no gift.

Instead, here is what we need to do:

1. Recognize that wills and trusts are being used significantly less than they were;

2. Understand that individuals are using designations more often;

3. Educate our constituents about the value, for their loved ones, of using a will, trust, or beneficiary designation. Designations are a particularly attractive option for people since they can handle it themselves without the need for a lawyer and at no cost;

4. Encourage our prospects to include a charitable provision in their wills, trusts, or beneficiary designations. An organization is not likely to secure more estate gifts without educating and cultivating folks and then asking for the commitment.

Michael J. Rosen, CFRE

October 18, 2013

 

Spoiled Children

January 17th, 2013 | No Comments | Posted in Education

Much discussion about higher education assumes that the children of wealthy parents have all the advantages, and they certainly have many. But a new study reveals an area where they may be at a disadvantage. The study found that the more money (in total and as a share of total college costs) that parents provide for higher education, the lower the grades their children earn.

The findings — particularly grouped with other work by the researcher who made them — suggest that the students least likely to excel are those who receive essentially blank checks for college expenses.

The study — “More Is More or More Is Less?” — is by Laura Hamilton, an assistant professor in the School of Social Sciences, Humanities and Arts at the University of California at Merced, and was just published by the American Sociological Review (abstract available here), the flagship journal of the American Sociological Association.

Hamilton used data from three longitudinal federal databases — the Baccalaureate and Beyond Study, the Beginning Postsecondary Students Study, and the National Postsecondary Student Aid Study. And she compared parental contributions and grades. Significantly, she also controlled for factors such as parental socioeconomic status. She argues in the paper that high wealth levels are associated with higher parental financial contributions, but also with other factors that contribute to academic performance (such as better high school educations, high aspirations for higher education, and so forth). Without controlling for socioeconomic status, those other factors may mask differences in patterns based solely on parental financial contributions.

And here she found — across all types of four-year institutions — the greater parental contributions were, the lower the student grades were.

This finding backs the idea that parental financial support can act as a “moral hazard” in that students make decisions about how seriously to take their studies without having personally made the investment of cash in their educations.

The impact of parental contributions on grades was lower (but still present) at highly competitive institutions. Generally the grades were lowest for students with high levels of support from their parents at private, out-of-state and more expensive colleges.

Before parents reading this article cancel those spring semester tuition checks and Facebook message their college-age kids to get jobs, there are two important caveats to the study.

One is that the study found a positive association (even controlling for other factors) between increased parental contributions and graduation over five years. In an interview, Hamilton said that she explained this finding (even if apparently contradictory with the results on grades) because those with minimal levels of parental support have a much more difficult job paying for college, and those who can’t pay, can’t graduate. “Kids who don’t have funds, they don’t stay,” she said.

The second caution Hamilton offered about parental spending on higher education comes out of the qualitative research project that prompted the quantitative work just published. Hamilton explored the impact of parental financial support on a women’s floor of a dormitory of a Midwestern public university, tracking student grades and interviewing parents. She found the pattern confirmed by her national data: many parents provided high levels of support only to be shocked (and, she said, angry) that their daughters weren’t earning good grades.

A second pattern Hamilton discovered in that study of one dormitory (and that she believes is the case nationally) is that the lowest grades were earned by children whose parents essentially supported them without much discussion of student responsibilities. The negative impact of high levels of parental financial support was mitigated or eliminated by parents who set clear expectations for their children about grades, graduating on time or other issues, she said. This extends to all levels of parental support for students.

The problem is that most parents who give a lot of money are apparently less than demanding about expectations. Then, Hamilton said, the students find college to be a great experience, and not one they are going to endanger by failing. “They say ‘I want to stay there, but I’m not going to work too hard while I’m here.’ They stay in college but dial down their academic effort.”

Hamilton stressed that she wasn’t arguing that parents who can afford to pay for college stop doing so. Rather, she said, they need to focus on what they are paying for, and to link their financial support to goals. What parents need to do, Hamilton said, is “to make smart investments.” That means evaluating the expense, and not just assuming that all spending during the college years has equal value. In other words, she said, a parent of means is wise to offer support so a child can take a meaningful but unpaid internship, but the parent isn’t going to see any payoff from providing cash for spring break vacations.

‘Paying for the Party’

Hamilton may be prompting a lot of uncomfortable discussions between parents and college-age children this year. In April, Harvard University Press will be publishing a book, Paying for the Party: How College Maintains Inequality that she wrote with Elizabeth A. Armstrong, associate professor of sociology at the University of Michigan. That book argues that affluent students — very much encouraged by their colleges and universities — waste time and opportunities in college on “a party pathway” organized by the Greek system. The work argues that students who bypass the system may suffer social costs, but are likely to emerge with a much better education.

Further Armstrong argues that the party system present at institutions with the affluent students to afford it ends up hurting the educational experience of all students.

Hamilton said that while it is easy to just blame students for these trends, colleges and universities “play an important role” that needs more examination.

When she has presented about her research to faculty members, many have seemed uncomfortable about the implications for their own children. Hamilton has two young children (too young, she said, for them to be worried about her research). She said that she does “plan fund a considerable portion of my kids’ college experience,” but she added, “not without a conversation about the job of the student.”

Scott Jaschik

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