Donor support for US higher education remains strong

Philanthropic gifts to colleges and universities reach near record levels, just as wealthy benefactors wield growing power over institutions

February 21, 2024
gift illustrating endowments to US universities
Source: iStock

US colleges and universities are enjoying historically high levels of philanthropy, an annual tally has found, just as the nation’s higher education system grows increasingly concerned about the influence of private donors.

US higher education institutions collected $58 billion (£46 billion) of donations in the fiscal year that ended this past June, second only to the record level of nearly $60 billion set the previous year, according to the annual survey results from the Council for Advancement and Support of Education (Case).

Case issued its report shortly after a separate annual report – by the National Association of College and University Business Officers, or NACUBO, and the investments advisory service Commonfund Institute – showed US colleges and universities reporting an average gain of 7.7 per cent in their endowments over the same fiscal year.

That’s a major turnaround from an 8 per cent loss suffered by those endowments, at 688 participating institutions and their foundations, over the previous fiscal year, NACUBO and Commonfund said.

The two analyses attributed much of the shift in both donations and endowment portfolio sizes to trends in overall stock-market values, which largely rebounded in the 2023 fiscal year after falling substantially in the early years of the Covid pandemic.

The gains also come as big-dollar donors are being seen as – or even feared to be – using their financial clout to unduly influence the leadership and mission of US higher education. Major examples include the successful campaigns led by donors at two Ivy League institutions, Harvard University and the University of Pennsylvania, to force out their presidents over matters of global politics and academic freedom.

Case largely represents university officials involved in the work of soliciting donations, and its president and chief executive officer, Sue Cunningham, said in an interview that she understood the rising concern about such cases.

“What’s happened in recent months has been jarring,” Ms Cunningham said of the turmoil, in which wealthy donors and the politicians they support have found ways to force numerous US institutions – big and small, public and private, open-access and elite – to oust leaders, overhaul governing boards and revise curricula and missions.

Yet Ms Cunningham, representing some 90,000 higher education professionals mostly working in fundraising, said her group had long-standing policies for donor assessments and ethics that she saw as largely succeeding in helping its members and their institutions guard against philanthropists seeking political influence.

“I think some of the headline-grabbing stories of recent months are by far the outliers,” she said. “By and large, the reality with the vast majority of donors is they are making gifts because they care deeply about investing in the institutions, without any expectation of undue influence.”

Ms Cunningham said it was clear that private donors were accounting for a growing share of revenue across US higher education, as governments were pushed to spend less on such public services, but said she had no “perspective” on whether that was a beneficial trend. She said that universities knew to turn down donors who appeared problematic in that regard, though she said she did not know of major examples of that happening.

Ms Cunningham also acknowledged that a growing share of donations to higher education worldwide was coming from foundations rather than individual gifts, and she said that Case was in the middle of an analysis aimed at learning the degree to which that was being driven by donor-advised funds – organisations that compile gifts from multiple donors for reasons that include both tax advantages and the collective impact on chosen recipients.

The use of donor-advised funds in higher education “has seen significant growth in recent years”, she said, though it was not yet clear whether or to what extent that was being done with the intent of increasing the effect of philanthropy on institutional decision-making.

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