Reprinted from PoetsandQuants.com
One of the most valuable assets of a top-ranked business school is its alumni network. It's a major consideration by applicants in choosing an MBA program, and it's a significant sign of a school's true brand strength in the marketplace.
But it's also something that is hard to measure. There is no available metric that will let you know how often the alumni network at a school gets current students internships or jobs. There is no measurement to find out how often an alum returns the call of a student for advice, mentorship, or networking.
The Most Telling Metric
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 be handing over money to a school especially if they felt no affinity toward the institution or were unsatisfied with the MBA experience they received. So high alumni giving rates might well be the single best proxy to assess both the satisfaction of MBAs with an institution as well as the ultimate value of the network a graduate inherits at commencement.
The Schools with Most Generous Alums
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. That is an extraordinary level of support at a time when the average rate of giving for a top-20 business school is roughly 20%.
"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. That long-term satisfaction has to be high given the unheard of rate of giving. 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. Days before the May 31st deadline for its annual giving campaign, more than 68% of its alums had already send in their checks, beating the 67.5% peak reached in 2008. Danos is hopeful that the school might very well hit 70% this year when the final number comes in.
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.
Top Schools with Weak Networks
Among the top-ranked schools, who comes out on a 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 on the last page of this story, we've estimated the annual alumni giving for schools, which do not report this data).
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. In a capital campaign, there may be half a dozen donors who make the difference. This measurement looks at 100% of the alumni at a school on an annual basis and all the schools track it."
The money giving, of course, is little more than a proxy for the strength of a network. It's not the payoff 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 some from Tuck calls. But you can't compare that to other schools because it's impossible to track." Tuck's career services office does track the percentage of jobs MBAs ultimately get via an alumni contact. Last year, roughly 70% of the Class of 2010 landed full-time jobs thanks to alumni connections, says Celone.
Of course, there are also 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. 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. Part of the explanation, says Olian, is that the vast majority of Anderson School alumni live and work in California and pay taxes to the state government.
What makes these B-school leaders truly standout is that alumni tend to be far more generous with their undergraduate alma maters. The top ten undergraduate schools in annual alumni giving, for example, tend to range between 50% and 60% participation. Among the top ten business schools, the range is from Dartmouth's high of 67% to a low of 16% at Columbia Business School. James Ellis, dean of the University of Southern California's Marshall School, says that alums almost always are more emotionally connected with their undergraduate institutions. "It's where you first live when you leave home for the first time, it's where you might meet your first serious girlfriend or boyfriend, and where you make many of your most important friends," he says.
So what's the story behind the extraordinarily high rate of giving at the Tuck School? Besides the obvious affinity MBA alums have for the school, there's an extraordinary amount of effort and organization behind each year's well-managed 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 alumi 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. "This is a thing of beauty to watch. Volunteers send emails, make phone calls, have annual dinners and cocktail parties and encourage everyone to make a gift. They are very motivated. They love the school, and they get lots of support."
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. Adds Don M. Wilson III, a 1973 Tuck alum, who is chairman of the school's annual giving campaign: "If you don't have a great school and a good living and educational experience, it becomes progressively more difficult to generate loyalty.
"The size of Tuck makes the numbers manageable," believes Wilson. "For larger MBA programs, it would be difficult to say you knew everyone in your class. You can most definitely say that after spending two years in Hanover. 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."
And, it goes without saying, the likelihood that grads will reach into their pockets and give back to their alma maters.
ALUMNI NETWORKS AT THE TOP 25 BUSINESS SCHOOLS IN THE U.S.
|School||Percentage of Alumni Giving||Median Gift||No. of Living MBA Alums||Active Alumni Clubs||Countries with Clubs|
|Notre Dame (Mendoza)||35%||$200||5,456||274||42|
|Harvard Business School||27%||$250||43,585||98||37|
|Carnegie Mellon (Tepper)||19%||$100||8,304||35||13|
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