Giving to higher ed will slow in 2019, Moody's predicts
- Public universities are "gaining momentum" in giving, with donations rising a median 8.8% during the fiscal year ending June 30, 2018, according to a recent Moody's investor report. That increase has outpaced voluntary contributions to private universities, which were up 6.7% for the year. Overall, giving is expected to continue but will slow in 2019.
- Moody's reported that intentional efforts to boost public university fundraising paid off, raising the increase in giving from a growth 2.3% rate in 2015. Private and public institutions with more than $5 billion in cash and investments collected 61% and 49% of all voluntary gifts, respectively.
- Meanwhile, some private colleges that aim to become "philanthropically centered" by using annual gifts and larger endowments to cover more operating expenses may struggle, Moody's reported.
The Moody's report touches on several data points and themes that run through discussions about higher education finance, including demographic enrollment challenges, decreased public funding and competition for donors.
On the one hand, the analysis supports research released last week by the Council for Advancement and Support of Education (CASE) indicating that donations to colleges and universities rose by an inflation-adjusted 4.6% during the 2017-18 academic year to a record $46.7 billion. A strong stock market drove the gains, along with changes in tax law that spurred more giving, which Moody's also noted.
Top-ranked private universities Harvard ($1.4 billion), Stanford ($1.1 billion) and Columbia ($1 billion) led CASE's list, followed by the University of California Los Angeles ($787 million) and UC San Francisco ($730 million). Johns Hopkins University ($724 million), which just nabbed a $1.8 billion donation from alumnus Michael Bloomberg, was also near the top of the list.
Fundraising has gone up at public and private colleges as state support has gone down — though public universities vary in their reliance on such funds, Moody's analysts noted in a separate report.
While large, elite institutions tend to receive an outsized share of private gifts, small institutions are after them, too. Their need is especially pertinent at a time when many struggle with declining enrollment, a competitive fundraising market and prospective students who are averse to tuition hikes.
In a white paper last year for the Association of Governing Boards of Universities and Colleges, Mary Marcy, president of the Dominican University of California, spelled out five long-term approaches to help small private colleges weather difficult times. They include drawing more students with professional and graduate offerings; focusing resources on a signature educational experience or program; and capturing additional students online or through branch campuses.
A separate report out this past fall from Deloitte and Georgia Tech offered similar guidance to public institutions to keep their footing amid changing demographics, growing competition and shifting funding sources. They include sharing resources among campuses, partnering with the private sector and offering more lifelong learning opportunities.