Higher ed receives record $37.5 billion in donations

'Mega-gifts' increase, donor participation decreases

See EAB's take on this story.

Last year, American colleges and universities received a record $37.5 billion in gifts, making 2014 the second consecutive year donations to higher education reached a historic high.

The total marks a 10.8% increase from 2013—the largest jump since 2000, according to the annual "Voluntary Support of Education" survey, which tracked gifts that 1,018 institutions received from foundations, individuals, and companies.

However, a significant portion of that industry-wide yield was concentrated at just 20 schools that together brought in about $10 billion. In other words, nearly one-third of the total funds was given to less than 2% of all schools.

The fundraising success is being driven by "a huge explosion of wealth," according to Bruce Flessner, a Bentz Whaley Flessner fundraising consultant, rather than average graduates who earned a raise and then donate. A strong fiscal year in which the four major stock indexes increased significantly helped bolster donation sizes as well.

Last year, five institutions received a gift of at least $100 million, up from three in 2013. The University of Texas at Austin, for example, boosted its standing to seventh overall due to a $217 million art donation that made up approximately 40% of the institution's fundraising total.

Also in EAB Daily Briefing: The biggest donations to higher education in 2014

Colby College and the University of Pacific both received "mega-gifts" of art as well, valued at $102.6 million and $115.6 million respectively. But while art donations may be becoming more common, it cannot yet be called a trend, says survey director Ann Kaplan.

Although alumni donated 9.4% more than in 2013, a smaller percentage did so. Participation rates have been falling for 20 years, something the report attributes to the ease of tracking down contact information (Mulhere, Inside Higher Ed, 1/28; Will, Chronicle of Higher Education, 1/28). 

The takeaway: In 2014, colleges and universities received a historical high of $37.45 billion from donors, but less than 2% of the institutions received almost one-third of that money.

EAB's take

Katie Stratton Turcotte, Advancement Forum

As the economy continues to improve, it's unsurprising that donors at the top of the giving pyramid are increasing their contributions to higher education. However, it's important to remember that these mega-gifts are often the culmination of many years of giving. For instance, Michael Bloomberg, who made a $350M gift to Johns Hopkins in 2013, gave his first gift of $5 in 1965, a year after he received his bachelor's degree—Bloomberg made his first $1 million commitment to the university in 1984, 20 years after his graduation.

Often, the attention to the top of the donor pyramid is done at the detriment to the rest of the pipeline. As Mr. Bloomberg's giving history exemplifies, giving history stretches back to the first years after graduation.

Young alumni who donate consistently after graduation go on to give larger gifts and provide long-term institutional support. Their average gifts are three times larger than those from infrequent donors, and they ultimately contribute over five times more to their alma maters across their lifetimes. Since the early 2000s, annual fund effectiveness has declined precipitously. With this decline, advancement leaders are increasingly concerned about where the major donors of the future will come from.

EAB has extensively focused on how advancement leaders can make principled investments in the growth of the major gifts pipeline. Learn more about donor acquisition by downloading our studies and related resources focused on Creating a Culture of Giving Among Current Students, and Disruptive Innovations in University Fundraising.  Or, register for the first of three upcoming webconferences focused on mid-level giving, Accelerating Donors up the Giving Pyramid.

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