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Private Giving to Colleges Is Up, but Fewer Alumni Make Donations.Navigation: Main page Author: Strout, Erin Section: MONEY & MANAGEMENT
U. of Wisconsin at Madison gets Blue Cross windfall, increasing national total Survey Finds Increase in Private Giving The country's colleges raised a collective $25.6-billion in private donations during the 2005 fiscal year, a 4.9-percent increase from 2004. While it was the second consecutive year that private giving grew, following a drop in 2002 and a weak performance in 2003, the wealth was far from evenly distributed. The increase in giving to just the top 10 institutions accounted for half of the total growth in higher-education donations in 2005, which was 1.6 percent when adjusted for inflation, according to the Council for Aid to Education's annual "Voluntary Support of Education" report, released last week. With almost $603.6-million, Stanford University raised the most of 1,005 respondents to the survey. But it was the University of Wisconsin at Madison that gave the numbers a major boost when it received a $296-million foundation donation from Blue Cross Blue Shield of Wisconsin â€" a result of the company's conversion from nonprofit to for-profit status. When the insurance company made the switch, the state government required it to distribute a percentage of its holdings to charities, half of which went to medical programs on the Madison campus, and the other half to the Medical College of Wisconsin. "If you took out that particular gift, the overall increase would have been smaller," says Ann E. Kaplan, director of the survey. She said that unless a gift of similar size is made next year, total giving should be expected to drop. Fund-raising success typically mirrors the strength of the economy and the stock market, both of which were relatively strong in the 2005 fiscal year, which ended June 30 for most institutions. Alumni gifts accounted for 27.7 percent of the total raised, and alumni donated 6 percent more than they did in 2004. Nonalumni individuals contributed 19.5 percent of the total, giving 3.8 percent less than they did in 2004. Corporate giving was level from 2004, accounting for 17.2 percent of the $25.6-billion. Gifts from foundations jumped by 12.9 percent, and they gave 27.3 percent of the total. The growth in donations from foundations follows several years of decreases, as those organizations continued recovering from market declines. The smaller proportional share coming from corporations in 2005 was puzzling, perhaps the result of an increase in other types of partnerships with colleges that would not be counted as private donations. "It's still an important part of giving, and I don't know that the survey results represent a major shift," says John Lippincott, president of the Council for Advancement and Support of Education. "Corporations do contribute to universities in other ways, such as clinical trials, grants, and contracts." Fewer People, Bigger GiftsThe University of Wisconsin raised a total of $595.2-million, placing it second to Stanford and ahead of Harvard University, which raised $589.9-million. The University of Pennsylvania was fourth, with $394.2-million, and Cornell University was fifth, raising $353.9-million. While the total value of alumni gifts increased, the proportion of alumni who made gifts declined for the fourth consecutive year, to 12.4 percent in 2005. According to the survey, even when two-year institutions, which have lower participation rates than four-year colleges, are eliminated from the calculations, there is still a decline in the number of alumni contributions. There are a few possible explanations for the findings in the report that show decreasing giving rates to colleges from alumni. For one, as institutions invest in better software and technology to maintain more-accurate alumni contact information, the number of alumni on record increases, but the number of donors does not necessarily go up, which affects the percentage rates for alumni giving that colleges report. Also, among survey respondents, a third of foundation giving is from family foundations, so some gifts that could otherwise be counted as alumni donations are instead tallied as foundation gifts. "It is also possible," the report says, "that fewer alumni were inclined to make contributions." Martin Shell, vice president for development at Stanford University, which completed a $1-billion campaign for undergraduate-education programs in 2005, says the institution's annual fund has remained flat in the last year, as has the percentage of individuals who give. He says the university is looking for new ways to engage alumni by marketing appropriate ways to give to different segments of the alumni base. Stanford has also tried to encourage alumni to give to fund-raising drives that offer matching incentives. Mr. Shell says that such donations, which typically double the value of a gift, are appealing to alumni. In the end, however, many fund raisers must choose between securing large gifts or increasing the number of gifts. With limited resources, they can't do both. "There's always a trade-off between focusing on participation and dollars," Mr. Shell says. At the University of Wisconsin at Madison, which is wrapping up a campaign in 2007, having already raised $1.65-billion, the number of individual donors has increased since 2004. John Feldt, senior vice president for finance, says that even if the Blue Cross gift is subtracted, the institution has still raised record amounts of money. "We are very encouraged," he says. "Because as state support continues to be less, we're becoming a private public institution. Our staffing in development operates like a private college." According to the survey, gifts for capital purposes, such as endowments, buildings, and equipment, increased 5.6 percent. Giving for current operations increased by 4.4 percent in the 2005 fiscal year. Over all, private funds accounted for less than 10 percent of a college's expenditures for the past three years and have never represented much more than that. "Results suggest that voluntary support could never grow sufficiently to become the primary solution to budgeting challenges," Ms. Kaplan says. The results of the survey can be ordered at the Council for Aid to Education's Web site (http://www.cae.org). GIVING BY TYPE OF INSTITUTION, 2004-5
Number Total Average per
Type of institution amount institution
of institution surveyed (in thousands) (in thousands)
Research 210 $15,522,803 $73,918
Private 68 $6,999,422 $102,933
Public 142 $8,523,381 $60,024
Master's 305 $2,039,175 $6,686
Private 151 $1,226,285 $8,121
Public 154 $812,890 $5,279
Liberal arts 294 $2,509,859 $8,537
Private 276 $2,482,184 $8,993
Public 18 $27,675 $1,538
Specialized 70 $692,609 $9,894
Private 45 $299,269 $6,650
Public 25 $393,340 $15,734
2-year 126 $175,600 $1,394
Private 4 $5,665 $1,416
Public 122 $169,935 $1,393
Total 1,005 $20,940,046 $20,836
SOURCE: Council for Aid to Education
Where the Money Came FromFoundation 27.3% Corporations 17.2% Religious organizations 1.4% Other organizations 6.8% Nonalumni 19.5% Alumni 27.7% Estimated national total, 2004-5: $25.6-billion NOTE: Figures may not equal 100 percent because of rounding. How It Was SpentProperty, buildings, and equipment 14.2% Endowment (unrestricted) 2.1% Endowment (restricted) 25.4% Loan funds 0.1% Current operations (unrestricted) 8.8% Current operations (restricted) 46.3% Deferred gifts[*] 3.2% Total for 1,005 institutions, 2004-5:$20.9-billion * Deferred gifts counted at present value SOURCE: COUNCIL FOR AID TO EDUCATION TOP FUND RAISERS, 2004-51. Stanford U. $603,585,914 2. U. of Wisconsin at Madison $595,215,891 3. Harvard U. $589,861,000 4. U. of Pennsylvania $394,249,685 5. Cornell U. $353,931,403 6. Columbia U. $341,140,986 7. U. of Southern California $331,754,481 8. Johns Hopkins U. $323,100,408 9. Indiana U. $301,060,946 10. U. of California at San Francisco $292,932,382 11. Yale U. $285,706,955 12. U. of California at Los Angeles $281,552,472 13. Duke U. $275,815,542 14. U. of Minnesota $265,498,507 15. U. of Washington $259,118,639 16. U. of Michigan $251,353,272 17. New York U. $247,126,717 18. Massachusetts Institute of Technology $206,007,428 19. Ohio State U. $204,598,172 20. U. of California at Berkeley $198,863,654 SOURCE: Council for Aid to Education GRAPH: Trends in Giving to Higher Education ~~~~~~~~ By Erin Strout in the Fair Use guidelines of the 1976 U.S. Copyright Act. info [at] singlearticles.com Powered by CommonSense |
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