Virginia Tech Overhauls Hokie Club to Boost Donations, Meet Growing Scholarship Expenses

The head of Tech's fundraising program details why the Hokies are re-tooling their donor requirements.

[Mark Umansky]

Between the advent of cost of attendance stipends and the growing financial dominance of ACC powerhouses like Clemson and Florida State, Whit Babcock saw an immediate need to overhaul the athletic department's fundraising apparatus.

Now, the department is rolling out the results of more than a year's worth of work, unveiling a series of changes to the "Hokie Club" Monday designed to simultaneously raise revenue and put a greater emphasis on fan loyalty as the department allocates seats in both Lane Stadium and Cassell Coliseum. The biggest alteration is the institution of minimum donation requirements attached to each season ticket, a move away from the department's previous policy that used a donor's annual gift to determine their standing in securing tickets, parking spaces and other benefits.

In an interview with The Key Play ahead of the announcement, Bill Lansden, the Hokie Club's executive director, cast the new model as a necessary shift for the department as it tries to adjust to the rapidly changing college football landscape.

"The current model we're in helped us with all these great facilities, it got us into the ACC, it helped our coaches recruit really good players," Lansden said. "It was the right decision at the right time, but we're at a point where we're not covering our costs."

Indeed, Lansden noted that as recently as the 2010-11 fiscal year, the department managed to raise enough money from donors to cover the costs of its scholarships without dipping into its operating budget. But for the last three years, he said the department's failed to meet that standard.

In fact, he points out that the department fell $1.6 million short of that goal in the 2014-15 year, and the 2015-16 year will likely produce a $2 million gap once they crunch all the numbers. Without a change in annual revenue, Lansden's projections suggest that the discrepancy would reach $3 million or more by next year.

"Since 2010-11, scholarship costs have gone up and we've leveled out in donations," Lansden said. "If we didn't make a change, then Whit Babcock would need to take more and more money from the budget to pay the difference."

The explosion in revenue for other Power 5 programs makes this sort of position especially untenable for Tech, Lansden said. Not only is Babcock enviously eyeing the coffers of playoff programs like Alabama and Oklahoma β€” both of which boasted department revenues topping $100 million in the latest USA Today study, Lansden notes β€” but schools closer to home are also raking in cash at rates that dwarf Tech's fundraising program.

In particular, Lansden points to the fact that the Hokies ranked 11th in their own conference in donations a year ago. Louisville and Florida State led the way, and Clemson's $22 million in gifts certainly stands out compared to the $9 million Tech collected.

"Where do you think they're putting that extra $13 million? That's why they have coordinators making 1.3 (million), right?" Lansden said. "Just because you have a budget over $100 million doesn't mean you'll make the playoffs, but you can make the case that if we really want to compete at that level, we have to generate that revenue, and this is just one part of it."

Lansden's also worried that the Hokies lag behind the rest of the ACC in the sheer number of donors. He estimated that the Hokie Club currently boasts 10,000 members, but with Florida State, Clemson and even N.C. State all doubling that figure with their own donor groups, he sees cause for concern.

"Our peers are beating us substantially," Lansden said. "Across the board, they're beating us, and we as Hokies, we always want to win. We want to be vying for the top three in the ACC in everything we do, and well, we're not."

So the Hokies are overhauling their fundraising program with an eye on closing that gap. Lansden notes that the change to gift requirements per seat now puts Tech in line with the model that every other team in the Power 5 is currently using (with the lone exception of Notre Dame, who he notes will move to such a system in two years).

Before these changes, Lansden said the Hokie Club let donors pick their seats and parking passes in accordance with their annual gifts, dividing people into tiers by the size of their yearly contributions. He believes that created two problems: one financial and one of fairness.

From the department's perspective, they felt they were losing out on revenue due to the caps on giving that exist for the most committed donors.

"Under the current model, if you're a donor and you reach $100,000 of lifetime giving, you're no longer required to make an annual gift for parking or tickets," Lansden said. "We have a large number that met that threshold, and they did what we told them to do, and they're not giving us an annual gift."

But Lansden said the department was also concerned that the old system made it possible for a new donor to cut a sizable check and automatically leap ahead of someone who's been steadily giving at a smaller amount over a period of years.

He's hoping that the new model resolves both those issues. The department examined how much money season ticketholders tended to give each year based on where they sit (in both Cassell and Lane) in an effort to come up with minimum gift requirements that felt right, Lansden said.

In Lane, he said the highest gift stipulation is for people sitting around the 50-yard line at $800 per ticket, then "it fans out, so as it goes around the curve, it goes 800, 600, 350, 200, 150." In Cassell, there's a similar arrangement: seats in between the baselines come with a $500 requirement, then it changes around the bowl.

"There's a wide variety for people," Lansden said. "If you're on a fixed income, and you know you can't afford 800 for six seats, then you can take eight in the 100 dollar section."

Similarly, he said the department's developed options for younger alums.

"In both Cassell and in Lane, we've set aside quite a few seats that do not require a donation, so if they're a young alum who's 25, got a job in Northern Virginia, but they want to start their points and buy season tickets, they can buy some at the 50 dollar donation or you can buy them where you don't have to give anything," Lansden said.

But when it comes to rewarding the program's most consistent supporters, Lansden thinks the new system still excels. The minimum gifts per seat will replace annual gifts for donors, Lansden stressed, while accounting for the length of time they've been giving.

"Under this new model, we've changed up the points system so the vast majority of points will be accumulated based on your lifetime giving to athletics," Lansden said. "You're going to get two points per one hundred dollars you've ever given to athletics. We're rewarding loyalty, so for those donors who have been giving us $500, $1,000, $2,000 a year for all those years, they're gonna come out way ahead. The emphasis is on lifetime giving to athletics."

In all, Lansden believes these changes will generate a "minimum" of an additional $3 million to $3.5 million more for the department annually.

"But I tend to be an optimist, I think we'll do better than that," Lansden said. "We told Justin, 'Just beat Tennessee and Notre Dame and we'll take care of it.'"

Yet even with the extra cash stuffing Tech's coffers, Lansden acknowledges that the change may rub some donors the wrong way. He said he previewed the changes to about 200 club members already, and feedback has been supportive, if hesitant.

"In theory it sounds great, but people say, 'You know what, you're right, we've got to raise more money, but how does this affect me?" Lansden said.

To help assuage those concerns, Lansden and the rest of the Hokie Club leadership will be hitting the road in the coming weeks for a series of 26 town halls starting Tuesday in Roanoke, and covering all of Virginia, Charlotte, Raleigh and Atlanta.

"We're doing everything we can to communicate," Lansden said. "We're confident in why we're doing it, we're confident in the system, it's gonna work."

Indeed, Lansden hopes that the more people hear about the changes, the more they understand just how transformative they could prove to be for all of Tech's teams.

"We know it's change, we know there are going to be some people who are required to pay more money," Lansden said. "We understand that, but we feel like the reasoning behind why we're doing this is solid. We've got to start covering our scholarship costs so we can invest money into our programs."

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