College fundraising revenue is on the rise, but the number of alumni donors continues to decline, Donald Hasseltine writes for University Business.
College donations jumped from $23 billion in 2006 to $34 billion in 2015, he notes. But the bulk of gifts now come from a small number of major donors, reports Hasseltine, formerly the vice president for development at Brown University.
In 2006, 87% of donation dollars came from the top 10% of donors, and this rose to 94% in 2013, Hasseltine notes. Similarly, the top 1% of donors now contribute almost 80% of total gift revenue, a 16–percentage-point-jump from ten years ago, he adds.
College leaders may be tempted to focus solely on attracting mega-donors for efficiency's sake, but neglecting the middle and lower end of the giving pyramid may have long-term repercussions, Hasseltine warns.
About 40% of major donors start their charitable ties with their alma mater with gifts of less than $100 shortly after graduation, and 80% of major donors give consistently during the subsequent five years, writes Julie Solomon, a practice manager of EAB's Advancement Marketing Services.
In fact, 94% of $1 million-level alumni donors gave to their college within the first 10 years of graduation and donated consistently for at least a decade before giving a major gift, finds a recent study by Brown.
It's important to remember that megagifts are often the culmination of up to 30 years of giving, Hasseltine writes. The smaller donations of young alumni can, in fact, be steps up the ladder to major gifts, Solomon notes.
Neglecting the middle and lower end of the giving pyramid could jeopardize the long-term sustainability of an institution's fundraising program, Hasseltine warns. As the giving pyramid narrows, institutions should double down on cultivating the next generation of large donors, he argues.
Megagift culture also threatens to deepen the financial inequality between universities, he argues. Elite colleges serve less than 5% of students enrolled in a four-year institutions, but have received nearly all of the $50 million–plus donations over the last four years, Hasseltine writes. To maintain the excellence of American education for all students, higher ed leaders must find a way to direct donations to a more socioeconomically diverse range of institutions, he argues (Hasseltine, University Business, 11/30).
Also see: Guide your donors from modest gifts to major contributions
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