Charitable Giving to Higher Education Was Up in 2015
Posted By Eliana Osborn on February 15, 2016 at 10:41 am
High-profile donations to education have become more prevalent in the news recently. However, big names like Gates and Zuckerberg aren’t the only private citizens giving piles of money to schools. And $400 million gift to Harvard in June 2015 may seem like overkill when you realize the size of the school’s overall endowment fund ($37.6 billion, if you’re curious).
The 2015 Voluntary Support for Education report from the Council for Aid to Education found that last year was a record year for higher education donations, with $40.3 billion in giving. That’s up 7.5% from the previous year. Topping the list is Stanford University with $1.63 billion, far surpassing number two Harvard’s $1 billion.
VSE notes that the top 20 fundraising schools make up less than one percent of American colleges and universities, yet they took in more 28.7% of giving. Alumni giving is the largest source of money, and that category increased year-over-year by more than 10%. Nonalumni giving was up even more, rising 23%. The percentage of alumni who donate is down, though the total dollar amount of gifts is up. Family foundations are another substantial source of revenue, and their gifts grew slightly by 3.6%. Corporate giving did not increase, and other organizational giving decreased.
Inside Higher Education reports on what these financial gifts to schools are earmarked for. “The amount of money dedicated for financial aid is large — accounting for about 39 percent of all restricted endowment funds raised and 9.5 percent of donations received for current operations in 2015. But the proportion of raised funds that are committed for financial aid has held relatively steady for the last two decades.” This is a source of some controversy; a group of Harvard alumni have a plan to make the school entirely free for most students, using endowment dollars, and a new bill proposed recently would force the wealthiest schools to spend more of their endowment money on financial aid.
Another report about charitable giving, The Philanthropy Outlook, is produced by Indiana University, and it looks at at year-to-year changes in charitable giving generally. In a press release about the report, Una Osili, director of research for the Lilly Family School of Philanthropy, said, “We project stronger growth in giving to education in 2016 and 2017 than in overall giving or in any of the sources of giving.” Osili added, “This may be due in part to the increasing interest of donors — and especially wealthy donors, foundations and even corporations — in funding higher education, as well as a growing role for philanthropy in K-12 education.”
Overall giving in American is expected to increase more than 4% in 2016 and another 4% the next year, according to Philanthropy Outlook. Education giving numbers are often rolled together for all levels, with the category accounting for about 18% of total giving dollars. Where funds come from is slightly different when you look at all philanthropy compared to just education giving. According to the report, “In 2015, about 70.2% of total giving is expected to derive from individuals/ households, followed by 15.3% from foundations, 9.1% from estates, and 5.3% from corporations. The distribution is similar in 2016, with foundations, estates, and corporations receiving a slightly greater share compared with 2015 and individuals/households receiving a slightly smaller share.”