Sixth Consecutive Giving Record For Higher Ed
February 11, 2019 1test 2test
Giving to higher education in the United States set another new record for the sixth consecutive year. The estimated $46.74 billion in contributions increased 7.2 percent (4.6 adjusted for inflation) when compared to the previous record, $43.6 billion, set in 2017.
Three schools topped $1 billion in giving.
The estimate is based on responses from 871 institutions that completed both the 2017 and 2018 Voluntary Support of Education (VSE) Survey. The survey covers the academic fiscal year from July 2017 to June 2018, so it doesn’t include the latter half of 2018 when volatility hit the stock markets and possibly impacted year-end giving.
The Washington, D.C.-based Council for the Advancement and Support of Education (CASE) acquired the VSE in July 2018 as part of its larger mission to “build its research capacity and benchmarking services for advancement professionals.” The survey previously was conducted by the Council for Aid to Education (CAE).
It’s the ninth consecutive year that giving to higher education has increased and the latest estimate is the largest percentage increase since 2015 when giving was up 7.6 percent. The last time giving declined was 2009 when it plummeted almost 12 percent to $27.85 billion. Total estimated support of U.S. higher education institutions has grown almost 68 percent between 2009 and 2018. The only other time giving to higher education dropped within the past 30 years was 2002 (1.2 percent).
Foundations and alumni comprised more than half of the total giving:
- Foundations, $14.01 billion, 30 percent;
- Alumni, $12.15 billion, 26 percent;
- Non-alumni individuals, $8.57 billion, 18.3 percent;
- Corporations, $6.73 billion, 14.4 percent; and,
- Other organizations, $5.27 billion, 11.3 percent.
Since 2007, foundation support has exceeded alumni giving. More than 40 percent of reported foundation support is from family foundations, some of which is influenced by alumni, according to the survey.
All five major sources of giving increased, ranging from 2 to 13.5 percent:
- Other organizations, 13.5 percent, 10.7 percent inflation adjusted;
- Non-alumni individuals, 9 percent, 6.3 percent inflation adjusted;
- Alumni, 6.9 percent, 4.3 percent inflation adjusted;
- Foundations, 6.7 percent, 4.1 percent inflation adjusted; and,
- Corporations, 2 percent, -0.5 percent inflation adjusted.
“Other organizations” includes payments from donor-advised funds (DAFs), which spiked considerably more than the 3.1 percent increase in 2017. Of the 871 respondents to the survey, 46.4 percent replied optional questions about DAFs. Among those 404 schools, contributions from DAFs increased almost 66 percent in dollar terms (from $974 million to $1.615 billion) and the number of DAF contributions increased almost 19 percent (from 36,144 to 42,942). The average value of each DAF contribution jumped almost 40 percent ($26,960 to $37,615).
Tax reform, which was approved in late 2017 and took effect in 2018, might have driven the increase in contributions from DAFs. “Donors may have increased gifts to DAFs to take advantage of the fact that they would be itemizing their tax returns for the 2017 calendar year but not necessarily the 2018 calendar year,” according to the research brief.
Giving increased for both current operations (6.2 percent, 3.6 inflation adjusted) and capital purposes (8.6 percent, 5.9 percent, inflation adjusted). Gifts for current operations usually are smaller and greater in number, influenced by the overall economy, and track with Gross Domestic Product (GDP). Growth in the stock market and GDP usually affects gifts for capital purposes, including endowments and buildings, typically in the form of donated securities.
Harvard University again raised the most, $1.418 billion, up almost 11 percent from $1.28 billion in the previous year. Three universities eclipsed $1 billion in gifts among the top 10 schools:
- Harvard University, $1.418 billion;
- Stanford University, $1.097 billion;
- Columbia University, $1.009 billion;
- University of California-Los Angeles (UCLA), $786.65 million;
- University of California-San Francisco, $730.27 million;
- Johns Hopkins University, $723.6 million;
- University of Pennsylvania, $717.53 million;
- University of Washington, $711.06 million;
- University of Southern California (USC), $649.97 million; and,
- Yale University, $585.95 million.
Seven institutions received single gifts of $100 million or more — more than any other year. In 2015, there were eight $100-million-plus gifts that went to four institutions. The University of Arkansas in Fayetteville, Ark., was the only university not within the top 10 to receive one of the nine-figure gifts: A $120 million contribution from the Walton Family Charitable Support Foundation to establish the School of Art.
“There are signs that charitable contributions to U.S. college and universities will soften or decline in the next year reported,” according to the survey. Given that the overall economy, as measured by GDP, has been expanding for 10 years, there’s speculation that it’s bound to contract. Even if a recession is not officially declared, “contributions for current operations could slow or decline.”