Another Bountiful Year of Big (and Small) Donations

Higher education institutions in the U.S. took in $58 billion in philanthropic support during fiscal year 2023, according to the latest Voluntary Support of Education survey by the Council for Advancement and Support of Education, or CASE. This is the second-highest level of donations made in a single year, falling only 2.6 percent behind the record-shattering $59.5 billion raised in fiscal year 2022.

CASE officials say the survey’s results show “a pretty remarkable and astonishing level of philanthropic giving,” which demonstrates continued philanthropic support to the postsecondary sector despite a growing debate in the U.S. over the value of higher education.

Sue Cunningham, president and CEO of CASE, said that the level of support “should be a source of celebration and pride.” She added, “Recent headlines too frequently cast a negative light on the value of institutions of higher education. However, the trust demonstrated by this level of philanthropy tells a different story.”

Cunningham said that some decline in donations was expected this fiscal year after charitable contributions skyrocketed 12.5 percent last year—the largest year-over-year growth on record since 2000. And most of the decline was in gifts dedicated for capital expenses, which support the physical and economic infrastructure of institutions, as opposed to current operations.

“I think one needs to look at this kind of data in three- to five-year trends,” Cunningham said. “A slight decline for one year, and particularly since it’s the second highest in history, is not unduly concerning.”

Bruce Flessner, senior vice president of Grenzebach Glier + Associates, a fundraising and philanthropic management consulting group, voiced similar thoughts.

“While a great deal is made each year of the annual numbers, it is the trend lines that probably matter the most—rising foundation assets, alumni participation, big gifts, and major donor attitudes,” he wrote in an emailed statement about higher education philanthropy in general.

The brief also notes that the donation dip can be attributed predominantly to a stock market sag in December 2022 and explains that many donors time their charitable gifts to coincide with stock market growth periods. Despite the market fluctuation, almost half (45.7 percent) of the survey’s respondents reported increased donations to their individual institutions.

The survey included 757 higher education institutions, which represent about 24 percent of the nation’s colleges and universities but 79 percent of total voluntary support for higher education.

The survey results showed that the amount of donations from organizations (nearly 65 percent) rose approximately four percentage points. Other donations came from individual alumni (20 percent) and nonalumni (15 percent), which were each down slightly from last fiscal year.

Ann E. Kaplan, senior director of the CASE survey, said in a press release about the brief that the stock market fluctuations are also likely to explain why the trend in source of donations shifted.

“Some organizational donors base gift and grant levels on the previous year’s economy, making commitments a year or more in advance,” she said. “This partly explains why the level of support from organizations rose when personal giving declined.”

Amir Pasic, dean of the Indiana University Lilly Family School of Philanthropy, said he was encouraged by the growth in mega donors, or those who contributed gifts totaling $100 million or more. There were 11 such gifts in 2023, which accounted for 3.9 percent of total support. That’s more than double the 1.8 percent of funds collected through seven mega donations in 2022.

“Related to this is the finding that gifts of over $1 million accounted for over half the giving totals for the surveyed institutions,” he said in an emailed statement. “Given the commentary on the role of growing wealth in society, it is of great value to have this data on how philanthropy flows to our colleges and universities.”

Although the brief does not clarify what colleges received the mega donations, it does note that one was a bequest, one came from a corporation and two came from living individuals, three from donor-advised funds and four from foundations. Mega donations were made to Stony Brook University and Columbia University in New York, as well as the University of Chicago and the University of Kentucky during the time span of the survey.

“When people give or foundations give or corporations give at that level, we describe these as transformational gifts because of the huge impact they have on the work of universities and colleges,” Cunningham said.

Still, she believes a gift of any size is incredibly important to advancing higher education.

The large gifts predominantly, although not exclusively, fund endowments and tend to be used to support student financial aid programs, specific academic divisions and faculty and staff compensation. Smaller gifts tend to go toward current operations and are more often earmarked for research.

“Focusing on the many of what one might describe as more modest gifts is just as important as focusing on the more significant gifts in terms of scale financially,” she said.

But Cunningham also said she wasn’t oblivious to the real challenges colleges and universities are facing as public opinion of higher ed continues to decline and more people question the value of a college degree.

She pointed to the grilling of three university presidents by lawmakers on Capitol Hill in December as a recent example. She said while the controversy over the presidents’ comments about addressing antisemitism on their campuses did not affect the most recent report, it could influence donations in the fiscal year to come.

“The turbulence that has occurred over recent months is disturbing and worrying,” she said. “But I think at the end of the day … broadly speaking, those who have deep commitment to the advancement of higher education will not be swayed by a few negative outcomes of the interactions in recent months.”