Universities rely heavily on alumni for funding, and maintaining relationships with them has become a core skill. Like generous alma mater-loving university graduates, the alumni of nonprofit organizations are a valuable resource, particularly when funds are tight. In addition to donating money, these former volunteers, employees, and program participants might share their time, professional expertise, and contacts—and even perform staff work.

Some organizations are already reaping the rewards. Coro Northern California offers leadership-development programs that include job placements in government offices, businesses, nonprofits, and other organizations. Onetime participants in the program provide these placement opportunities for fellows, teach courses, and recruit and select new fellows, all for free. At the Asian Women’s Shelter, in San Francisco, former residents very effectively demonstrate the results of the shelter’s work to current clients, prospective donors, and the general public. Princeton Project 55 places its graduates in social-sector internships and relies on alumni volunteers to perform a good deal of staff work—to such an extent that the value of their unpaid activity exceeds the group’s annual budget (Exhibit 1).

Not all nonprofits, however, are equally predisposed to capture value from their alumni. In a survey of 30 nonprofit organizations,^1...