The Division I collegiate sports ecosystem is facing several strong headwinds, including an ever-growing gap between the haves and have nots, declining season ticket sales and attendance figures, mounting legal and anti-trust challenges, and loads of long-term debt. But former UC-Davis athletic director Kevin Blue (he recently accepted the role of chief sport officer at Golf Canada) says the “most underappreciated challenge to the long-term health of college athletics is aging fan and donor demographics.”
Our Take: Historically speaking, athletic departments have relied heavily on fundraising revenue to cover the costs of their various sports programs (including scholarship aid for student athletes). But as alumni of the 1960s, ’70s and ’80s begin to age out, concerns are beginning to mount about the shortfall they will leave in budgets and whether it can be replaced. “The fact that most donors are in an older age bracket is very scary,” said Jay Judge (Senior Associate Athletics Director, Development and External Affairs, Seton Hall University).
It wouldn’t be so scary if there were another generation of boosters ready to assume the responsibility. The problem is graduates of the ’90s and ’00s are significantly underrepresented among current donors, and it very much remains a question whether they will ever give back to athletic programs in the same way their predecessors did. “The characteristics of people going to college and their preferences with respect to athletics have changed over the last several decades,” Blue explained.
One reason ’90s and ’00s graduates are not donating at the same clip as generations before them is the competition for philanthropic dollars has increased significantly over the last 25 years. Globalization and the birth of the internet led to the increased awareness of—and access to—countless charitable causes both local and globally. “Growing up [in the late ’80s and ’90s], my dad always said you give back to your church, you give back to your grammar or high school, and you give back to your college or university,” Judge said. “It was almost mandated.”
That was a common mindset in households nationwide for a long time. But as the Seton Hall executive said, “There are a lot more worthy causes to donate to now a days and college athletics sometimes is not as much of a priority for a younger generations disposable income.” It is worth noting Judge founded Coaches Cure CF, a charity aimed at raising awareness of and funding for Cystic Fibrosis research in 2013 (they have been fundraising with coaches and schools since ’10).
Schools would do a better job cultivating young donors if they spent more time thinking about the long-term. But Blue explained, the challenge athletic departments face is they have a sort of ‘innovators dilemma’ on their hands. “The most important donors [to an athletic department] right now are the ones with the ability to make the biggest difference financially, and generally those people tend to be further along in age. So, as [athletic departments] focus on urgent current priorities, their attention understandably gravitates towards those people with high [donation] capacities rather than the younger ones who don’t have the capacity yet.” Remember, it’s going to take years for the young donor behavior seeded now to pay off.
The traditional fundraising model has rewarded donors with access to tickets and parking in exchange for their donations. But as evidenced by the declining attendance figures, young fans are far less inclined to be wooed by premium seats to a game. The University of Maryland has seemingly figured this out. To appeal to the next generation of donors and increase Terrapin Club membership (which funds scholarships for the school’s student-athletes), the B1G school has moved towards a strategy that prioritizes “different types of benefits; unique content and experiences that [members] can’t get anywhere else.” They’ve introduced an online streaming platform (Terrapin Club Plus), a quarterly magazine and a program called Backstage Pass that gives Club members the chance to take peek behind the curtain of the school’s athletic department (think: open gym at the Xfinity Center, locker room tours or access to a post-game press conference). The hope is the new benefits will drive membership sales. “We really want participation and eventually, down the line, hopefully [those joining at base levels] will be able to donate more money,” Monroe said. It’s the long-term play that athletic departments have traditionally failed to make.
It’s too early to tell if Maryland’s creativity is paying dividends. Terrapin Club Plus just launched within the last month, and COVID-19 has prevented members from having the chance to take advantage of the benefits offered by Backstage Pass.
Demographics aside, athletic departments have come to realize there are inherent problems with tying the bulk of donations to tickets and parking. Those numbers will “ebb and flow” with on-field/court performance, Monroe said. That may help explain why Maryland, which hasn’t been to the Final Four since ’02, has seen Club membership drop from upwards of 10,000 members to just over 5,000 within the last 10 to 15 years (note: Maryland is among the schools who brings in more in donations from basketball than football). University of Oklahoma AD Joe Castiglione said his school has begun to “offer unique membership options that are not tied to any ticketing” to avoid dramatic fluctuations in fundraising dollars. He indicated the Netflix-style memberships, “where donors can pay a low monthly cost,” have been successful.
Tying the majority of the school’s giving program to seat licenses also “naturally influences an annual giving program in a way that makes it geographically biased,” Blue said. Which helps to explain the logic behind Maryland’s new approach. As Sportico’s Eben Novy-Williams recently reported, the Terrapin Club intends to use TicketIQ’s FanIQ to cast as wide a net as possible. Monroe explained part of the appeal of the media-driven approach: The school “could have an alum that doesn’t live in the area and is still be able to take advantage of [the membership’s new] assets.”