Battle between athletic departments, NIL collectives over donor dollars real

On3 imageby:Eric Prisbell04/17/23



A narrative has formed during this nascent NIL era depicting universities as increasingly concerned about large sums of donor dollars going to collectives rather than to athletic departments as traditional contributions. 

But are these concerns justified?

Consider the vantage point of Steve Hank, the executive vice president of collegiate athletics at Affinaquest, the leading data management company in college sports.

Formerly known as SSB, the company works with nearly 50 Power 5 schools. It uses data to identify a school’s supporters and best target them with personalized messaging to maximize ticketing, merchandise and donor potential.

From Hank’s perspective, “their concerns are well-founded,” he said. “The next 12 to 15 months in the major gift arena are going to really highlight the impact, and there will be hard numbers to back it up. But it doesn’t take a rocket scientist to figure out that both of those groups are drawing from the same donor pool, and those donors only have so much money to contribute into different areas … It is a concern for all the schools in Division I.”

On3 spoke with Hank, an industry veteran who has also worked at Arizona State and Texas, about the state of the industry and, specially, about existing pain points for schools trying to build relationships with a new generation of supporters.

Athletic departments need to find ‘hidden donors’

The perceived burgeoning issue related to donor-driven collectives is only one of the reasons, Hank said, it has become critical for athletic departments to expand the breadth and depth of their donor base. They need to unearth “hidden donors,” he said, supporters who have fallen through the digital cracks in a school’s multitude of databases. 

Universities for decades have relied on the same groups of deep-pocketed donors, going back to them time and again. Walk across any college campus and you’ll see several buildings bearing names of those usually within the same family.

It’s high time to expand that donor base.

“It’s more important than ever because they [hidden donors] are there,” Hank said. “How many times have you said you’ll do something and all it took is for someone to ask you? One of the other challenges that institutions have is they have limited resources, and understanding where to apply those resources most efficiently to generate the greatest impact is the best thing somebody can do because they are being stretched more than ever having to do more with less.”

Administrators leaving the industry in ‘droves’

Hank said that statistics on philanthropy indicate that people in their 20s and 30s have a markedly lower giving level to organizations than those in their late 40s or older. But once a school can get someone to give dollars – or purchase tickets or merchandise – the odds of them continuing to remain engaged and contribute rise “exponentially,” he said. Personalized messaging is key.

Hank can cite examples from his tenure at Arizona State, where he worked for 12 years until 2014 as associate athletic director. Hank wanted ASU, the first school in college sports to create a data warehouse, to build data profiles for their top 1,500 donors. In doing so, they pinpointed a man with a curious profile. He had never purchased a ticket for an ASU game. But he had opened emails with unfailing frequency and had a consistent habit of buying lots of merchandise. He also spent a lot of time on the team website, signing up for programs and buying the school magazine.

Turned out, he lived in a different state and had a weekend job that made attending games impossible. When the outbound sales team reached out for a small solicitation, he was flattered by the call, expressed deep support for the Sun Devils – and wound up making one of the leading donations for the renovation of Sun Devil Stadium.

While that approach falls under best practices, there is another factor at play that is creating new hurdles for athletic departments. 

When asked to pinpoint his number one top-of-mind issue when he works with schools, Hank didn’t hesitate: Distraction.

In the past, the annual turnover rate within athletic departments hovered around 10-12%, he said, with many administrators leaving one school to go to another. But over each of the last two years, the turnover rate has been 43-49%, with an increasing number of administrators moving from institutions into the private sector. It created a significant knowledge awareness gap within departments. Hank said the departures are most pronounced at the assistant athletic director to associate athletic director level. 

“What we are seeing now is people leaving the industry, and in droves,” Hank said. “What you’re seeing is a high level of burnout. The pandemic was hard on everybody. But when you look at the industries that were impacted the most, you’re looking at the travel industry and any industry where you had to put butts in seats and fill stadiums, theatres and venues. It was an incredibly challenging time. When you experience that, and then on top of that have the revolutionary change that is constantly occurring, I think it burned people out at a pace that the numbers show is significantly higher.”

AQ Advantage addresses pain points

Burnout can be attributed to the pandemic and also to the seismic changes the college space is undergoing. Everything from NIL to the transfer portal to conference realignment and the potential for student-athletes to be designated as employees of their universities have shifted the ground beneath our feet. 

“Collegiate athletics right now is not undergoing an evolution,” Hank said. “It is a revolution. Everything is just rapidly changing. So it creates a distraction for people, and when you combine that with the brain drain, it makes it hard. I don’t know if you’ve ever seen the Disney movie ‘Up.’ You know the dog? It’s like everything happens right now and everything is, ‘Squirrel! Squirrel! Squirrel!’ Distraction is at its height.”

As a result, Affinaquest saw this year as an opportunity to step in and help schools adapt.

It created an entirely new service and product line on behalf of its clients: AQ Advantage. It not only provides the company’s product in terms of the analytics software but also the staff to actually execute it on behalf of the school. That is a necessity now because of the staffing transitions within many athletic departments.

“It addresses both knowledge and manpower issues. Industry veterans who understand the strategic elements can come in and say, ‘You need to do your football renewals. Here’s the campaign and here’s how you can execute those items utilizing the data,'” Hank said. The offerings can be everything from setting the strategy all the way down to the tactical execution and everything in between.

Digital ticketing opens up fundraising options

One of the few benefits from the pandemic was the acceleration of the movement toward digital ticketing. Hank said he can now count the schools that don’t rely on it on one or two hands. Digital ticketing enables athletic departments to possess a treasure trove of data not just on who is purchasing the game tickets but also on who is actually using them via their mobile phone. But possessing someone’s ticketing data is only half the battle. It’s critical to sync it with their data from other buckets within the athletic department’s ecosystem. 

For years, long-entrenched silos within the walls of universities were cited for creating friction and a less-than-efficient data management system. Hank likes to tell the story of his company helping one SEC athletic department – he declined to name it – identifying several hundred thousand supporters whose names and information were previously hidden in a merchandising database in a forgotten digital silo.

Staff accessed the data, filtered it, structured it and created profiles for each customer. They then delivered customized campaigns to those fans. They found that each previously unidentified name was worth $1.91 to the athletic department. The average transaction was $530.94.

Over time, that adds up. 

Breaking down silos still an issue

These days, Hank said, silos still exist but not because officials are still mired in an old-school, stuck-in-my-ways mentality. Administrators now understand the need for and value of cross-department collaboration. The issue is turnover and having so many employees new to their roles.

“When you have people that are just trying to figure out where to park their cars, change [occurring] when you are tearing down silos is largely built on relationships,” Hank said. “And those relationships take time. Before it was, I can’t think of a better term than bureaucratic resistance – that is going away. And so they’re having to figure out how to collaborate, how to work together. And sometimes that new blood does help with that. But then they don’t necessarily have that institutional knowledge or that institutional experience to know how to facilitate it.”

Hank pinpointed Notre Dame as one school that has been exemplary in “knocking down walls and being incredibly progressive,” working collaboratively across campus. He added that “then there are others who I won’t name where they don’t want to be in the same room. The walls are still there but for a different reason [now.]”

When asked what separates a forward-thinking athletic department from a not-so-forward-thinking one, Hank pinpointed two important factors. The first is possessing a cultural focus on the fan, those that are data-focused and really intent on wanting to understand and engage with their supporters on a personal level. The engagement with supporters for these schools is relationship based, instead of merely transactional. Data helps foster a relationship, he said. 

Secondly, he said schools that have been most successful in reaching and engaging with supporters have a senior administrator – not necessarily the athletic director – who is actively involved in and championing that strategy. 

While the college landscape is now akin to the “Wild, Wild West,” Hank said, regulation is coming, and when it does, those in the industry who are prepared will thrive. 

“When you have engagement by senior administration who understands that the foundation of this entire business is built upon the student-athlete and the fans and the donors; that realignment will eventually calm down; that NIL, there will be some rules and some regulations that will come into play – those items are going to calm down,” Hank said, “The ones who find the time to not be 100% distracted by them are those that are going to have a stronger foundation moving forward.”