Which B-schools have the most satisfied alumni?
) — One of the most valuable assets of a top-ranked business school is its alumni network. It’s a major consideration for applicants when choosing an MBA program, and it’s a significant indicator of a school’s brand strength in the marketplace.
But it’s very hard to measure the strength of a school’s alumni network. There is no available metric that will let you know how often alumni help current students land internships or jobs. There is no measurement to find out how often an alum returns a student’s call for advice, mentorship, or networking.
There is, however, one very telling number to judge the strength of a school’s alumni network: the percentage of alumni who give money to a school every year. As Paul Danos, dean of Dartmouth’s Tuck School of Business, puts it, a school’s annual alumni giving rate is “a long-term satisfaction index.”
Alumni wouldn’t likely hand over money to a school if they felt no affinity toward the institution or were unsatisfied with their MBA experience. So, high alumni giving rates might well be the best proxy to assess both the satisfaction of MBAs with an institution and the ultimate value of the network a graduate inherits at commencement.
Which business schools do exceptionally well on this index? Year in and year out, the Tuck School beats every other institution in the world when it comes to annual alumni giving. Last year, for example, some 67% of Tuck’s 8,976 living MBAs wrote checks to the school. At a time when the average giving rate for a top-20 business school is roughly 20%, that is an extraordinary level of support.
“That is like the four-minute mile,” boasts Danos. “The appreciation for Tuck grows as our graduates go out and speak to others about their experiences. I do think it’s a long-term endorsement of the general way we educate.”
This year, Tuck will reach a new milestone, eclipsing the highest participation rate in its history. Today is the deadline for the school’s annual giving campaign, and more than 68% of its alumni have already sent in checks, beating the 67.5% peak the school achieved in 2008. Danos is hopeful that the school might very well hit 70% this year.
And after Tuck? It’s Yale University’s School of Management, which last year saw 46% of its MBA alums reach into their pockets to donate money to the school; the University of Virginia’s Darden School, the beneficiary of a 43% alumni giving rate last year; and the Stanford Graduate School of Business, which reported a 41% participation rate by MBA alums.
Among the top-ranked schools, which ones come out on the low end? The University of Minnesota’s Carlson School has an annual giving rate of just 5%. Two well-known Texas’ schools come next: Texas’ McCombs School of Business at 8%, while Southern Methodist University’s Cox School of Business reports a participation rate of 10%.
Several schools, including Chicago Booth and Wharton, refuse to disclose these numbers, most likely because they are less than flattering to the institution. (In the table below we’ve estimated the annual alumni giving for schools that do not report this data).
What separates the generous from the not-so-generous alumni?
Joseph Thomas, dean of Cornell University’s Johnson School, calls Tuck’s 67% rate “mind boggling. That means they’ve been doing things right for quite a number of years,” he says. “A higher percent must indicate a higher level of happiness.”
“The annual participation rate is the best measure of the strength of the alumni network,” insists Dave Celone, who heads up the annual giving effort at Tuck. “It’s really the only true metric that can measure the strength of the network. This measurement looks at 100% of the alumni at a school on an annual basis and all the schools track it.”
Alumni donations, of course, are little more than a proxy for the strength of the network. It’s not the payoff that students and alums get. “Anecdotally, whenever students call a Tuck alum, they get a call back or an email within that day, if not within the hour,” says Celone. “Alumni respond at close to a 100% rate whenever someone from Tuck calls. But you can’t compare that to other schools because it’s impossible to track.”
There are other extraneous factors that affect annual giving. At the Johnson School, for example, the alumni giving rate generally hovers in the low-to-mid 20% range. “It’s because the fundraising focus is on reunion years, which are every five years,” adds Cornell’s Thomas. “We try to talk people into a big gift then, and we’re not thinking that’s a mistake because we want to keep people engaged.”
Most public universities also suffer from the assumption that state educational funding is enough. “A lot of people presume that we are supported by the state, and as taxpayers, most of our alumni have already paid for us,” says Judy Olian, dean of UCLA’s Anderson School of Business. “Seventy-five percent to 80% of our alumni live here. They are taxpayers here, and they think that as taxpayers they are funding this institution already.”
Last year, the Anderson School reported an annual alumni giving rate of 20%, the second highest of any public business school, but still 23 percentage points below Darden.
Tuck’s alumni army
That’s certainly not a problem for Tuck, which is a private school. But it still doesn’t explain the extraordinarily giving rate at the school. Besides the obvious affinity MBA alums have for Tuck, there’s an enormous amount of effort and organization behind the school’s fundraising campaign. The school has a student advisory board for annual giving with 25 to 30 current MBA students. More importantly, Tuck enlists 600 alumni volunteers to actively encourage alumni to give back to the school.
“If you are in an office building in New York with 40 to 50 Tuck alums, they are all going to be talking about this right now,” says Celone. “They are very motivated. They love the school, and they get lots of support.”
Last year, for the first time, Tuck’s international alums gave at a slightly higher percentage than those in the U.S. That is virtually unheard of because charitable giving has long been a uniquely American habit.
Tuck’s youngest alumni, moreover, tend to participate at the highest rates, with annual giving north of 90% for classes graduating within the past four years and with participation percentages in the high 80s for classes who graduated between four and ten years ago.
“It’s the exact opposite of what I see at other peer schools,” says Celone. “They tend to struggle with their youngest alumni and those classes tend to be the largest. So they really impact the overall giving rates at other schools.”
Most alums attribute their gifts to both the fond memories of earning an MBA in Hanover, N.H., in a relatively small and isolated environment. “The size of Tuck makes the numbers manageable,” says Don M. Wilson III, a 1973 Tuck alumnus, who is chairman of the school’s annual giving campaign. “The size of the class, the intimacy between faculty and students, and the fact that Hanover is a pretty tightly knit community increases the probability of cohesiveness.”
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