Older Schools, Stable Administration Boost $1 Million Gifts

December 11, 2013       Patrick Sullivan      

Fewer than one in three U.S. colleges and universities received a publicly-announced million-dollar donation between 2000 and 2012. The institutions that did shared some characteristics, such as long presidential tenure, national ranking and institutional age.

These were some findings from a study “Million Dollar Ready,” released by the Indiana University Lilly Family School of Philanthropy and consultants Johnson Grossnickle and Associates. The report studied 1,449 colleges and universities that received gifts of more than $1 million. There were 10,501 such gifts made between 2000 and 2012, for a total value of more than $90 billion.

Higher education institutions with presidents in office since 2000 had the highest number of million-dollar donations, about 18 percent more than institutions with shorter presidential tenure. “Case studies suggest that a president’s ability to articulate a powerful vision and connect it to donors’ motivations will have a profound effect on million-dollar-gift success,” wrote the report’s authors. Board giving is also indicative of million-dollar gifts. The study found that “a board that doubles its average giving can drive a 5 percent increase in the number of million-dollar gifts received by the institution.”

Institutions ranked by U.S. News & World Report in 2000 received 61 percent more large gifts and a 156 percent increase in their value between 2000 and 2012, according to the study. About 9 percent of the 1,449 institutions included in the study were ranked in 2000.

The older the university, the more likely it would receive large gifts. Organizations founded before 1900 (51 percent of the institutions) received 13 percent more than those launched between 1900 and 1950 (26 percent of the institutions), and 12 percent more than those founded after 1950 (23 percent of the institutions. The total value of gifts was 16 percent higher than the medium-aged institutions, though there was no difference between the oldest and youngest universities.

Colleges and universities that value their faculty and staff receive more large gifts. The amount spent on employees (salary, benefits, etc.) is directly correlated to the number of million-dollar gifts received, and institutions with a large percentage of its faculty tenured receive more and higher million-dollar-plus gifts. A 10 percent increase in tenured faculty translates to a 0.4 percent increase in the number of large gifts and a 1 percent increase in their value.

Dollars attract dollars, the study found. A 10 percent increase in endowment size correlated to a slight increase in the number of large gifts and their value, 0.15 percent and 0.35 percent respectively. For every $100 million increase in assets, the value of large gifts increased by 1 percent. Government funding also played a role: a 10 percent increase in government funding equaled a 0.2 percent increase in the number of million-dollar gifts and a 0.5 percent increase in their value.

Doctoral and research universities, 19 percent of the sample, garnered 76 percent more million-dollar gifts than other types of schools, and the gifts were 214 percent higher than other types. Liberal arts schools (12 percent of the institutions studied) also saw higher levels than the aggregate, at 30 percent more gifts and 37 percent higher. Historically black colleges and universities (3 percent of the sample) received 20 percent fewer gifts, and those gifts were worth 45 percent less.

Finally, location matters. Rural schools received 11 percent fewer large gifts, and their value was 26 percent lower than others. But institutions in the Western region of the United States saw 27 percent more gifts than the total sample, with a 70 percent increase in value, and schools in the south saw 24 percent more gifts with a 43 percent higher value.