Donations to Colleges Post First Rise in 3 Years

Giving to colleges and universities grew by 0.7 percent, after adjusting for inflation, in the 2004 fiscal year, the first increase since 2001, a new report has found.

Higher-education institutions collectively

raised $24.4-billion in 2004, according to the Council for Aid to Education. The total is up from the $23.9-billion collected in 2002 and again in 2003, and surpasses the $24.2-billion raised in 2001.

“Historically, when the economy is strong, giving goes up,” said Ann E. Kaplan, director of the survey, which collected data on fund raising at 971 institutions.

Harvard University once again brought in more than any other institiution, raising $540.3-million in the 2004 fiscal year, which for most colleges and universities ended on June 30. The University of Arkansas at Fayetteville, the University of Wisconsin at Madison, the University of Virginia, and Princeton University fell off the top-20 list, replaced by the Massachusetts Institute of Technology, Ohio State University, the University of Michigan system, and the University of North Carolina at Chapel Hill.

Alumni Giving

The largest portion of contributions came from alumni, who gave 27.5 percent of the total, followed by foundations, which accounted for 25.4 percent. The proportion of gifts from individual donors who are not alumni increased to 21.3 percent, from 18.1 percent in 2003.

While the total amount of alumni giving increased, the percentage of alumni making donations declined for the third consecutive year, to 12.8 percent, according to the survey. In 2001, 13.8 percent of alumni gave to their colleges.

That decrease could be attributed to the improved databases and technology that colleges are using to track alumni contact information. The percentage of alumni who donate is based on the number of living alumni for which a college has good addresses.

“There is evidence that institutions are working hard to update databases,” said John Lippincott, president of the Council for Advancement and Support of Education. “When you do that, you increase the denominator in the calculation.”

Foundation grants to higher education dropped for the second year, down 8.5 percent in 2004, to $6.2-billion.

Ms. Kaplan said the downturn in foundation giving was not of great concern, especially since about a third of the foundations that give to colleges are family foundations, whose officials often opt to make personal gifts instead of grants. “Foundations continue to be a reliable, stable source of support,” she said.

Giving by corporations rose less than a percentage point after adjusting for inflation, or 0.8 percent. Donations from religious organizations dropped by 5.3 percent.

One surprise in the survey was the increase in gifts from individuals who did not attend the institutions they supported.

“Nonalumni support higher education for different reasons than alumni — usually they support particular programs,” Ms. Kaplan said. “The market was up, so it was an opportune time.”

The University of Virginia’s Curry School of Education last year received one of its largest gifts, $17-million, from Daniel M. Meyers, a Boston businessman who did not attend the university. Mr. Meyers befriended the school’s dean, David W. Breneman, while starting his marketing business.

Other universities reported increased success in raising money from parents of students and alumni. At Washington University, in St. Louis, giving by parents rose 200 percent in the last year, to $10.9-million. Jana Byington-Smith, director of parent programs at the university, says the increase is partly due to the university’s hiring of fund raisers specifically to work with parents.

Thirty-eight percent of the $2.7-billion the University of California at Los Angeles has raised in its capital campaign came from people who are not alumni, compared with 18 percent from the university’s graduates.

Money from private donations has accounted for less than 8 percent of institutions’ expenditures over each of the past three years, according to the survey.

Mr. Lippincott predicts another modest increase in private giving in the 2005 fiscal year, but recommends caution in reacting to the first increase in giving in three years. “I’m concerned that when we applaud the results,” he said, “there is a tendency on the part of some that it means that the state or federal governments can reduce their support.”

A summary of the survey results is available online at http://www.cae.org. A full report will be available in May. Copies cost $65 for institutions that participated in the survey and $100 for others, and may be found on the organization’s Web site or obtained through the Council for Aid to Education, 215 Lexington Avenue, 21st Floor, New York, N.Y. 10016; (212) 217-0878, vse@cae.org.

Erin Strout is a reporter for The Chronicle of Higher Education. Nicole Lewis contributed to this article.