Strong stock market lifts higher education giving to record $46.7B
- Donations to colleges and universities increased by an inflation-adjusted 4.6% for the 2017-18 academic year to reach a record-breaking $46.7 billion, marking nearly a decade of growth in charitable giving to higher education, according to an annual report by the Council for Advancement and Support of Education (CASE).
- Harvard University led the pack with $1.4 billion in donations, followed by Stanford University at $1.1 billion and Columbia University at $1 billion, Bloomberg reported. The University of California, Los Angeles and UC San Francisco rounded out the top five.
- A bull market likely lifted contributions, but CASE warns charitable giving to higher ed may slow or even decline in 2019 if the economy falters. A significant uptick in donor-advised funds, which are tax-deductible, was attributed to the robust stock market as well as to changes in tax law.
Although donors reached deeper into their pockets last year to support higher ed, their gifts were concentrated among a relatively small group of elite institutions.
In 2017-18, for instance, 28% of all donations went to just 20 colleges, reflecting a similar pattern from the year before, The Chronicle of Higher Education notes.
Additionally, mega-donors don't typically give to colleges that aren't regularly featured in the top spots. For example, only one in seven donations of $100 million or more in the 2017-18 academic year went to an institution not in the top 20, CASE notes.
As large gifts have become more frequent, their donors have caught flak for helping institutions that are already elite.
Take Michael Bloomberg's recent $1.8 billion pledge to his alma mater, Johns Hopkins University. While the record-setting amount is meant to make its admissions process "forever need-blind," critics point out the university's selectivity is a barrier to attendance for many low-income students who didn't benefit from SAT tutors or a good high school. Further, many low-income students may not even apply to elite schools because they don't think they can afford to attend.
These large donations can also further widen divisions between elite institutions and smaller colleges, Robert Kelchen, a higher education professor at Seton Hall University, told The Chronicle. In fiscal 2018, donors gave nearly $10 billion in new gifts to endowments, which ranged from less than $400,000 for smaller colleges to more than $50 million for institutions with endowments of $1 billion or greater.
Without the benefit of a large endowment or multimillion-dollar donations, it can be hard for some colleges to compensate for declining enrollment and lower levels of public funding. Indeed, dozens of colleges have closed or consolidated in recent years from those pressures.
Amid these challenges, large and small colleges alike are looking to strengthen their fundraising efforts. Kestrel Linder, the CEO and co-founder of GiveCampus, said colleges can do so by reaching out to younger alumni for smaller donations. (Alumni contributed 26% of gifts to higher ed in 2018, according to CASE data.)
"Those people are the folks who 10, 20, 30, 40, 50 years down the line will have the capacity to make much larger gifts that will lead to some of these eye-popping headlines," Linder said.
Colleges can better reach these potential donors by shifting to online giving, making fundraising pages mobile-friendly and focusing on recurring giving options, according to a report from GiveCampus.
- Council for Advancement and Support of Education Voluntary Support of Education
- Bloomberg Harvard Tops Fundraising as Colleges Reap a Record $43.6 Billion
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