Giving: Up, but Going Down
One by one the annual studies of higher education finance -- state college budgets, endowments levels, etc. -- have come out, finding that last year was a good one -- and that change (for the worse) is a-comin'. Add to the list today's Voluntary Support of Education report from the Council for Aid to Education, which documents charitable giving to higher education.
The annual study is designed to be a snapshot of what has happened in a given year, and looking at the council's 2008 study in that way, it doesn't offer much in the way of surprises. Amid the generally upbeat news, which includes a record breaking total of $31.6 billion donated to colleges and universities, it mainly reinforces trends that have been developing for more than a decade: solid growth from year to year (up 6.2 percent in 2008, compared to an average of 5.7 percent over a decade), continued gaps between wealthy and other institutions, just under half of all contributions coming from individuals (alumni and others), and donations split pretty much between operating support and building and infrastructure needs.
But as is true of so many examinations of the tumultuous economy these days, the results of the fund raising study -- given that the fiscal year they focus on ended seven months ago, before the most serious deterioration in the world and U.S. markets -- are likely to be instructive mostly as a baseline from which to mark what is certain to be a year or two or even more of significant drops in charitable giving and other economic measures.
Officials at the Council for Aid to Education do not make any formal attempt to predict or project the extent to which charitable giving to higher education institutions is likely to decline in the current fiscal year, 2009, and beyond. But through interviews with fund raisers and presidents at six of the 20 institutions that raised the most money in 2008, and conversations with leaders at some other colleges, said Ann E. Kaplan, who directs the Voluntary Support of Education survey, it became clear that most of them predict an end to what has been a very strong run of giving.
"Even at institutions that reported healthy gains in fiscal 2008," Kaplan said, "advancement professionals told us they had 'hit a wall' in January 2009 and that the decline was substantial." In addition, many of the colleges and universities that reported double-digit gains in giving in fiscal 2008 were finishing capital campaigns in 2007 and 2008, the report says, so a lot of their donations for the year came in the first half of the fiscal year.
CAE opted not to try to forecast how bad things might get in 2009 and 2010, Kaplan said, because "if you're going to forecast, you're supposed to stick to the data. Based purely on reviewing the available data, Kaplan said in an interview, "you wouldn't anticipate things to plummet in 2009. But the data show something milder than what we intuit is going to happen. If your intuition tells you the data might not be predictive, but you don't have more to go on, it's silly to try to speculate."
Among selected other findings of the council's 2008 report:
- The top 20 institutions (see table below) accounted for more than a quarter of all contributions to higher education. They raised $8.41 billion of the $31.6 billion total.
- Continuing a trend that has concerned some fund raising experts, the proportion of alumni who gave money to their alma maters dropped again, to 11 percent from 11.7 percent. But a subgroup of the institutions that reported their data from alumni of their undergraduate programs only found that their participation rate grew slightly, to 13.9 percent from 13.4 percent.
- The number of gifts made in the form of stock dropped by 11.5 percent among the 534 colleges that responded to the survey's questions about stock donations for the last two years.