Giving to Colleges Rises 5%, With Harvard and Stanford Raising the Most

iStock

Giving to colleges and universities grew 4.6 percent in the academic year that ended in June, with donor-advised funds showing significant growth as a source of gifts, according to a report released on Monday.

As in the past, most of the billions given to colleges went to a small group of elite colleges.

The top 20 institutions raised roughly 28 percent of the $47 billion contributed to all colleges in the 2017-18 academic year, the same as in last year’s survey. Fund raising from individuals was fueled by seven gifts of $100 million or more, all of which went to different institutions. Some were payments on pledges from previous years.

Big comprehensive campaigns helped increase support at the biggest institutions. Both the top private and the top public institutions in the following lists — Harvard and the University of California at Los Angeles, respectively — were in the midst of multibillion-dollar campaigns in the 2018 fiscal year. Harvard, which topped the fund-raising list in 2018, set a new high bar with a $9.6-billion haul from the campaign it completed last year.

Support from donors who didn’t attend the institution they supported rose just over 6 percent in the 2017-18 fiscal year, adjusted for inflation, compared with a more-than-4-percent gain in gifts by individuals who gave to their alma maters.

However, it’s possible that giving is stronger among alumni than it may seem. The numbers don’t include gifts people made to their alma maters from family foundations or donor-advised funds, which are counted separately by the researchers.

“Alumni giving is still a greater slice of the pie,” said Ann Kaplan, senior director of the Voluntary Support of Education program at the Council for Advancement and Support of Education, which now conducts the survey and compiles the report formerly run by Kaplan at the Council for Aid to Education.

Giving from people who aren’t alumni, Kaplan said, is likely to be a bigger factor at research universities that have a hospital or facilities with broader appeal, like an arts center. “Nonalumni tend to give to medical research,” she said.

Among other results in the report:

• “Other” organizations, including religious orders, fund-raising entities like United Ways, and donor-advised funds, increased their support of colleges by nearly 11 percent.
• Giving by foundations rose just over 4 percent. About 40 percent of that money came from family foundations.
• Support by corporations declined by 0.5 percent.

Results from the latest Voluntary Support of Education survey marked the ninth consecutive year of gains for higher-education giving. From 2009 to 2018, total support for American higher-education institutions rose nearly 44 percent, according to the study’s data, when adjusted for inflation.

A total of 929 colleges and universities participated in the survey. Those institutions, representing roughly one-third of all colleges and universities in the United States, accounted for just under 80 percent of all private support to higher education in 2017-18.

Donor-Advised Funds

Academic institutions raised a total of $46.73 billion in 2017-18. Here’s how it broke down:

The explosive growth of donor-advised funds — in which people can start a charitable account, receive a tax benefit, and later decide which causes get the money — fueled a significant portion of the support.

Among the survey participants, 404 answered a question about donor-advised funds, often called DAF. Those institutions reported that the dollar value of DAF grants grew nearly 66 percent in the 2018 fiscal year. Both the number of grants and the average value per grant increased as well, by just under 19 percent and 40 percent, respectively.

The growth in giving from donor-advised funds reflects their accessibility for midlevel donors. “You don’t have to be as wealthy as you would have to start a foundation,” Kaplan said.

After the federal tax law passed, in December 2017, some donors made a big gift in one year intended to cover multiple years of philanthropy, to maximize their tax benefits, a practice known as “bundling.” Kaplan’s program does not yet have data on that practice, she said.

Because of the growing popularity of donor-advised funds, many colleges and other nonprofit institutions are starting their own. Others are figuring out how to persuade donors who have accounts at Fidelity Charitable and elsewhere to give more.

The stock market’s recent volatility and the likelihood that the long economic expansion will curve into a downturn are matters of concern for all fund raisers in the 2019 fiscal year, Kaplan said. But she encouraged them to tackle any challenges that arise.

“Look at your own institution’s results in the context of national trends,” she cautioned.

“But remember that the work you’re doing to create the relationship between it and your supporters transcends all of that.”

Heather Joslyn is a senior editor at The Chronicle of Philanthropy. Contact her by email or on Twitter.