An educational institution's alumni are often its most important constituency. Schools rely on relationships with various groups of people to raise money and promote the school's interests. They track alumni because it is harder to develop the interest of an unassociated person than it is to simply continue a relationship that has already been established with a prior student. College alumni have invested time and money in the school and have experiences and relationships that make them particularly receptive to appeals by their alma mater.
Although colleges charge tuition, they also rely heavily on fundraising to support operations and provide resources for program development and expansion. Colleges have access to many different types of donated funds, but the single most important type of donation is made by individuals. Individual donations can typically make up two-thirds or more of an institution's operating budget.
With academic institutions, individual donations not only drive the yearly fundraising for operations but also play a pivotal role in endowment funding. Endowments are legacy gifts that are often made by individuals to support an institution into the future. The way a college ensures that its annual and endowment fundraising remains robust is by developing relationships with people who are interested in the success of the institution. The biggest group of people with the most vested in the success of their institution is college alumni.
Colleges track their graduates because they need them to continue to show interest. Not only are college alumni a pool of potential individual donors, they are also a testament to the value of a continued association with the school. When students apply to college, they often evaluate alumni participation and accessibility. The alumni network is considered a valuable component of a school's total educational offering that can justify a higher tuition and a better ranking as compared to other schools.
Alumni relationships have not always been a priority for colleges. Historically, it was not easy to keep track of students once they graduated. Schools often had to rely on graduates getting in touch with them when they wanted to engage. With the development of the Internet and social networking, it became a simple matter for students to maintain relationships with their classmates, even as they dispersed across the globe. Alumni relationship offices were able to capitalize on this trend, until alumni tracking became an industry of its own.
The bottom line is that colleges track graduates now because they can. It is the single most important thing they can do to preserve the future of the institution, because it is hard to find a constituency more interested in the reputation and prospects of an institution than the college alumni who may have spent a whole lot of money and the best years of their lives engaged with the school.