Bill Lansden on Hokie Club Donations: “The Number Exceeded What We Anticipated”

Almost two years ago, Virginia Tech Athletic Director Whit Babcock hired Bill Lansden out the University of Alabama-Birmingham to run the Hokie Club.  Before that, he was in the same role at Memphis. Lu Merritt, the longtime head of the Hokie Club, had retired, and Lansden was Merritt’s replacement.

Lansden had a tough road ahead: transforming an entity that had been doing business a certain way for decades into an organization set up to succeed in the modern era of college athletics.

For years, as Virginia Tech football rose to national prominence and the Hokies shifted from membership in the Big East/Atlantic 10 to the ACC, Hokie Club donations and membership levels increased organically. The Hokie Club grew from an organization that took in $6.3 million in 1997-98 into one that brought in $18.6 million just six years later, in 2003-04. This isn’t meant to trivialize the work of the Hokie Club staff during that time, but they did have a significant tailwind pushing them along.

Entry into the ACC, perennial top five, ten-win football teams, and Lane Stadium’s West Side expansion pushed Hokie Club donations well over $20 million shortly after that. But beneath the growing dollar figures, another story was being told: Hokie Club membership peaked at just over 12,000 members in 2004, then started to stagnate, then — even worse — decline.

By December 31, 2010, Hokie Club membership had fallen to 11,162 members (per my own personal Hokie Club account statement). The drop continued in the coming years, as the Hokie football team fell from 10-win seasons and conference championships to 7-win and 8-win seasons in 2012-2015, and the basketball team fell on hard times, averaging 12 wins a year and finishing last in the ACC every season from 2011-12 to 2014-15.

Director of Athletics Whit Babcock was hired in January of 2014, and among his many tasks was to revive and grow the Hokie Club. In April of 2015, the Hokie Club announced a “110% Hokie” campaign to increase giving, but that campaign was geared more towards existing members giving more money in response to the advent of Cost of Attendance, not towards recruiting new members.

Bill Lansden was hired in June of 2015 as the new Executive Director of the Hokie Club, with a difficult mandate: increase Hokie Club donations and membership not just through better marketing and awareness, but by changing the very culture of Hokie Club giving. Hokie Club donations had become transactional in nature over the years: donate money, and get season tickets and parking benefits. The new culture shift had to be towards donating to support the programs and the athletes.

At the center of the effort was the need to increase donations specifically for scholarships. Virginia Tech’s scholarship costs were fast approaching $15 million per year, with rising educational costs and almost $1 million in Cost of Attendance payments tacked on. Meanwhile, unrestricted Hokie Club donations that could be used for scholarships were headed in the other direction, declining towards $10 million and creating a shortfall that was growing and affecting all of Virginia Tech athletics.

Lansden’s approach was two-pronged: (1) create a new Hokie Scholarship Fund program, announced in May of 2016, that requires per-seat minimum donations to sit in certain areas of Lane Stadium and Cassell Coliseum, with those per-seat minimum donations being directed towards the Hokie Scholarship Fund; and (2) encourage those who don’t already belong to the Hokie Club to join up, via a Drive for 25 initiative announced in December of 2016 that is designed to raise Hokie Club membership to 25,000 members — over twice its one-time peak membership of 12,000.

By the time the Drive for 25 was announced, Hokie Club membership had fallen to 10,609 members, and scholarship fundraising stood at $9.8 million, with scholarship costs of around $14 million, per multiple press releases and reports at the time.

With the Hokie Scholarship Fund (and its associated per-seat minimums) in place and the Drive for 25 underway, Virginia Tech waited to see what would happen. Check Safeway Ad and Save a Lot Ad. They changed the annual giving deadline from December 31 to March 31, meaning that both programs were kicked off in an extended 15-month donation cycle: January 1, 2016 to March 31, 2017. (Future donation years now run April 1 to March 31.)

March 31 arrived, and the numbers were encouraging, to say the least: the Hokie Club announced record donation levels “approaching” $33 million, with $16.2 million earmarked for scholarships. On April 5, the progress tracker on the DriveFor25.com web site listed 13,170 donors, an increase of 2,731 donors since December, when the Hokie Club stood at just 10,609 members.

 

Hokie Club Donations Exceed Expectations, Even With Some Donors Bowing Out

It was against this backdrop that I recently sat and interviewed Lansden for almost 45 minutes. We started with his thoughts on the success of the 2017 giving cycle.

“Candidly,” he said, “the number $16.2 (million) exceeded what we anticipated. Realistically, if we had hit $14 (million) I would have been ecstatic.”

The per-seat minimums were a bone of contention among many donors, because in addition to being new, it also meant that many benefactors, who were donating just $500 for each group of four tickets they were buying, suddenly had to pony up more; in some cases, a lot more.

While many Virginia Tech fans adjusted easily, Lansden and his fellow Hokie Club employees also took a lot of heat from donors who weren’t happy with the program. Fortunately, despite the heat, many of those who were unhappy eventually stayed on board.

“When we first rolled it out, there was consternation among certain donors, due to the perceived minimum, who in years past hadn’t had to make an annual gift, and now we’re asking them to,” Lansden said. “We all understood their frustration, but I was surprised at the ones who went ahead and renewed when they initially told us, ‘Hey, I’m not renewing, no matter what you do.’ I think that helped. At the end of the day, winning 10 games and going to the ACC Championship Game helps with the optimism around the football program.”

What makes the increase in membership even more impressive is that the Hokie Scholarship Fund, and its per-seat minimums, did indeed drive some donors away.

“We probably lost, in non-renewals, 700, 800, 900, people that didn’t renew their football season tickets and therefore didn’t make their annual donation,” Lansden admitted, and he specifically spoke of the major donors who had reached certain lifetime giving thresholds and were only required to maintain a minimum annual gift to keep their seats. With the per-seat minimums introduced, that went out the window. (I have told the story on the message boards of a friend of mine, a major donor who only had to donate $2,000 a year to maintain his 16 seats in a very good location. Each of those 16 seats now commands $800, or $12,800 total.)

Change, particularly cultural change, is hard, and there is collateral damage. The numbers bear out, at least for now, that the per-seat minimums tied to the Hokie Scholarship Fund, was the right move en masse … but it wasn’t right for every individual affected.

“That’s probably where we lost most of them, beyond the normal non-renewals,” Lansden said, “I think the vast majority of people who didn’t renew were between the 35s and were asked to make a donation, and they just decided based on their current living standard, they just didn’t see how it would fit in their budget. I could also give you names of people who did it on principle, and I admire them for it. I told them, when they said, ‘Hey, I’m out,’ I said, ‘Hey, we all have to make decisions on what’s best for us. ’ ”

Scholarship Donations in the Black … for Now

With $16.2 million raised for scholarships, Virginia Tech has fully funded their scholarship bill from Hokie Club donations for the first time in years. Lansden anticipates that Virginia Tech’s scholarship bill, including Cost of Attendance payments, will hit nearly $15 million this year.

“I think it was $14.4 million the year before [in 2015-16]. We anticipated it being $14.9 million this year, but the reality is things pop up and the cost goes up. I don’t know exactly what it is. I think it’s safe to say it’s around $15 million.”

There’s no rest for the weary, though. “This is going to continue up,” he says, “and look, there isn’t any doubt that at some point in the next number of years, that cost is going to exceed what we’re taking in. It probably will, and that’s just the way it is. At that point, we’ll have to make adjustments and look at it.”

Ultimately, increasing Virginia Tech’s athletic endowment, and thus the yearly interest earned on that endowment, will also help fund scholarships. While bluebloods like North Carolina enjoy athletic endowments of over $200 million (that’s admittedly rare), the Hokies’ endowment is $57 million.

“I’d guess we’re in the middle of the pack [in the ACC],” Lansden says. “It hasn’t been finalized, but whenever the university does announce the next campaign, we, athletics, are going to put a big emphasis on the endowment.”

About Those Per-Seat Minimums:  What If …?

With all donors in and football season tickets reserved, Lane Stadium seat selection is underway. That leads to some sticky questions: with hard donation levels set for seating, what if the numbers don’t match up?

Here’s the map.

Lansden is confident that they did a good job portioning off the sections.

“Staff members of the ticket office analyzed who was sitting where and how much they were donating. That’s how they came up with these numbers. In theory, if we designate your section $600, the average donor is giving us $600 per seat, so that was all done that way. It was analyzed, that’s how we came up with the numbers that we did.”

If a section winds up with empty seats after all eligible donors for that section have selected their seats, one of two things will happen.

1.) Season ticket holders who haven’t donated enough to buy in a certain section can immediately upgrade by donating extra money.

“If [a donor] has four seats in the $600 section and he sees four seats in the $800 section, and he picks those four, great he can do it, but he immediately is sent to a webpage where he puts in his credit card information and he makes an $800 payment. Optimistically, we’re going to have another bump [in donations] during that seating period. How much? It’s just a guess, but we feel like we will.”

2.) After all donors select seats, the general public can buy season tickets, but they’ll have to make the necessary donation.

“After all 10,400 people select their seats,” Lansden explains, “the general public can come in and pick season tickets, and if there are two seats open at the 48, and Joe Blow wants to buy them, he can buy them, but he’s got to make the $1,600 donation.”

(Note: While the Hokie Club has over 13,000 members, only about 10,400 are season ticket buyers who have donated to the Hokie Scholarship Fund.)

Beyond that, if there are any available seats, “we’ll sell them to our donors on an individual basis.”

There are thousands of tickets available that don’t require any minimum donation to purchase, and during the season, those seats, if unsold, will be available on a per-game basis.

If a section sells out with eligible donors for that section remaining — for example, if the $800 section sells out, with donors remaining who gave enough to be in that section, that’s the way the cookie crumbles.

“We were very clear with this from the beginning,” Lansden explains. What happens is, well Pete came in and gave us $3,200 and he wants four in the $800 section, but there aren’t any available so he gets four in the $600, that’s an $800 difference. We do not refund that. That is an extra $800 that we were fortunate to take in.”

Can the Hokie Club Keep Momentum? And Can it Reach 25,000 Members?

Lansden knows that while the early numbers are encouraging, he and his staff have a lot of work ahead of them to stay ahead of scholarship costs and reach their ultimate goal of 25,000 members.

“I think the initial announcement for the Drive for 25 was done very efficiently. They did a great job, and we had an initial bump. I think there’s no doubt the Drive for 25 campaign helped significantly.

“The other thing is that with this new perceived donation [for seating], it kind of created a buzz. People were going, ‘What is this and why are we doing it?’ I believe that there’s an overall perception among some people that it’s hard to get good Virginia Tech football season tickets, because people don’t move, and under the old system, once you were kind of established, you were there. I think my staff did a great job of getting out the word that part of this new system is that some seats are probably going to open and some areas are going to open, so there is an opportunity now for some of you who might have been sitting on the sideline.”

Virginia Tech is also in an unusual position: Frank Beamer, their former coach, a legend and fan favorite, is spearheading the drive.

Beamer’s retirement from coaching includes eight years of employment with the athletic department, making $250,000 per year, and at the time Beamer signed that deal, it’s fair to say it was perceived as bit of a golden parachute that wouldn’t require much effort from Beamer. Not so. He’s working for his $250k per year.

“He has been making individual calls,” Lansden says of Beamer. “He was down in Charlotte last week at a golf tournament, and he spoke to the alumni association. We’re actually planning a couple of trips this summer to some large, urban areas throughout the United States, taking him and Whit and pushing the Drive for 25. We’re going to advertise to all alumni in that general area, ‘Hey, come meet Coach Beamer,’ because there aren’t too many people who can say they’ve met Coach Beamer outside this area. He’s more than willing to do that. He’s been great… I think just having Coach Beamer associated with this drive, there’s a sense among people that this needs to be successful.

“We’ve met with him, and he’s just about willing to do anything we ask.”

Still, that number …. 25,000.

“I am the ultimate optimist,” Lansden says, “but I’ll be candid: that’s a tall order. That is a tall order. I think the reality is, it’s what we have to do. We have to tap into that Hokie spirit, and it’s kind of that blue collar, underdog feeling that we do deserve to be the best, because we’re Virginia Tech. We have to tap into that, and we have to tap into the affinity that all alumni have for this university.

“It’s up to us find ways to keep it fresh, which is hard. When you announce it on December 12 I think it was, then the last two months have all been about Hokie Scholarship Fund donations. So how do we get it back fresh?”

Not only that, but is the remote donor, who doesn’t get any benefits for his or her money, going to keep donating for the good of the program? In that scenario, Lansden knows, “It’s just a gift. It’s just, ‘Here, here’s $150 and I love Virginia Tech, and I live in Columbia, Missouri.’ [But] are they going to renew the next year?

“We can continue to bombard our alumni living outside of a six-hour drive, but the reality is, how do you create that sense of urgency? What can you do so when they see it, they’re like, ‘You know what, I’m going to join today.’ You have to make it easy for them, that’s something you have to do, which I feel like we are. But we’re going to have to be aggressive, extremely aggressive.”

The Drive for 25 is off to a good start, but now the hard work begins. An encouraging note? In the month of April, even after the March rush, another 170 members joined, and the Hokie Club expanded from 13,170 to 13,340.

At that rate — 170 new members per month — they’ll reach their goal of 25,000 members about 69 months from now, in February of 2024.

“I joke with my staff that once we do that,” Lansden says, “we can be consultants.”

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Note: The Hokie Club’s Drive for 25 campaign is a paid sponsor of TechSideline.com. As part of that sponsorship, we’ll be bringing you monthly updates and articles about the Hokie Club and the Drive for 25. This article is the first of many pieces that will track the progress of the program and raise awareness for the need for Hokie Club donations. To learn more about the Drive for 25, click below.