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US: Universities break fundraising records

American universities and colleges raised a record-breaking amount in gifted contributions last year - $31.6 billion - but giving to higher education institutions could decline this year and in 2010, according to a new report from the Council for Aid to Education. Stanford heads the Top 20 list of fund-raising universities, receiving $785 million, followed by Harvard, Columbia and Yale.

Overall charitable contributions to universities and colleges grew by 6.2% in 2008, according to the annualVoluntary Support of Education (VSE) survey published on Wednesday. This was higher than the average annual increase in contributions over the past decade of 5.7%.

Giving to the Top 20 universities was up by 11.5% last year. These institutions represent 1.9% of 1,052 VSE survey respondents, the report states, but contributions to them account for 26.6% of all 2008 charitable contributions to higher education institutions.

Also, gifts to the Top 20 institutions account for half of the national increase. In fact, says the VSE survey, contributions to other institutions was down by 4.2% in 2008. "Among the individual institutions remaining, experiences varied. About half posted increases in support, and half reported declines."

Institutions raised just under half of the total of $31.6 billion from individuals, with alumni contributing 27.5% and non-alumni individuals 19.4%. "Alumni giving increased by 5.2% and contributions from non-alumni individuals increased by 8.3%," says the report.

Foundations gave 28.8% of the total - an increase of 7.1% over the previous year - while corporations gifted 15.5%. Other organisations contributed 7.6% and religious organisations 1.2%.

Among the Top 20 institutions, Stanford's $785 million raised was substantially higher than Harvard ($651 million), Columbia ($495) and Yale ($487). More than 11 universities raised more than $400 million in gifts during 2008 and the lowest amount contributed in the Top 20 was $285 million to the University of California, Berkeley.

Institutions that achieved major increases in contributions were Indiana University, with a 47% increase over 2007, the University of California, San Francisco, with 45% growth in gifts and New York University (35%). Stanford saw a nearly 6% decline in giving last year over 2007, as did the Massachusetts Institute of Technology (5%) and the University of Southern California (13%).

Historically, says the Council for Aid to Education, three factors play a major role in annual VSE survey results. First, the strength of the stock market has "a powerful effect on capital purpose gifts to higher education".

The second factor is the overall health of the economy, which strongly effects contributions for current operations. "During recessions, we expect gifts, especially gifts for current operations, to decline or grow more slowly than usual. The third factor is tax law.

"When the country is in a recession while the stock market is also declining, the scene is set for a decline in overall support," the report says.

"A compounding problem facing universities is that of sharply declining endowments. The value of endowments dropped because of the performance of the stock market and, in certain cases, questionable investments. Endowments are often a cushion for lean years, even if they decline somewhat during market downturns. In today's environment, endowments are not able to play as protective a role."

The Council believes contributions to higher education institutions will decline this year. Ann E Kaplan, director of the VSE survey, said: "Even at institutions that reported healthy gains in fiscal 2008, advancement professionals told us they had 'hit a wall' in January 2009 and that the decline was substantial. Both the number and value of contributions dropped early in the calendar year."

There is speculation, the report adds, "that 2010 will be another down year".

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