Saturday, February 5, 2011

Numbers and Trends

The Council for Aid to Education has released its annual Voluntary Support of Education survey of giving in 2010. Let me share some of the key findings before focusing on the ones that concern me most.

Charitable contributions to American colleges and universities totaled $28 billion in 2010, an increase of 0.5 percent over the previous year. However, when adjusted for inflation, giving declined 0.6 percent.

The total for 2010 is the same as it was in 2006 -- $28 billion. When adjusted for inflation, however, support is actually 8 percent lower in 2010 than it was in 2006.

The top 20 institutions account for $7.15 billion of the $28 billion —$0.13 billion less than the top 20 institutions raised in 2009. The top 20 institutions in 2010 are not the same as they were last year. As a group, the 2010 top 20 raised $0.11 billion less than they raised in 2009. They represent 2 percent of the 996 survey respondents but account for 25.5 percent of all 2010 gifts to higher education institutions. Thirteen of the top 20 reported declines in giving in the past year.

Now, here’s what concerns me most:

The amount of alumni giving and the average alumni gift both decreased 0.4 percent. Alumni participation declined again for the 16th straight year, from 10 percent in 2009 and 9.8 percent in 2010.

In 2006, alumni giving constituted $8.4 billion of the $28 billion total; in 2010 it was $7.1 billion of the same amount. In that same period, alumni participation declined from 11.9 percent to 9.8 percent, and the average gift per alumnus declined from $1,195 to $1,080.

In the past two years, alumni support, for the first time, no longer constitutes the largest source of giving to higher education, having been eclipsed by foundations.

I am concerned because alumni have been the most loyal annual donors to higher education. And those who give year after year, constitute the largest source of seven figure gifts in campaigns, of mega-gifts and of significant estate gifts. The decline is annual participation is predictive of a for more consequential long-term decline in the volume and size of gifts. I am also concerned because alumni participation is a reflection of satisfied consumers and well-functioning community of interests. That’s why U.S. News and World Report factors it in to their ratings.

This worrisome trend of decreased alumni giving was evident well before the recession but attracted too little attention from higher education leaders and associations. As long as the total amount given to higher education increased, we seemed care little for its composition. And, since the field of fund raising attracts, or perhaps requires, optimistic personalities, our tendency to want to believe the numbers are coming back may blind us to the growing weakness of our pipeline or our most important source of support.

For instance, this past July the CASE fund-raising index, based on survey of practitioners, predicted “an increase in donations of 5.7 percent in 2010-11 over the previous academic year. Fundraisers estimate an increase of 4.3 percent from 2008-09 to 2009-10 when they close the books on the year just ended.” That projection was based on an academic years not a calendar year but, as I wrote in an August 8 blog post, it was “overly optimistic.” I made that call not by heeding what the fund raisers were hoping but by listening to what donors were actually saying in multiple surveys.

Hope is a great human quality but it won’t reverse the decline in alumni support. If we don’t find and fix what’s behind it, the numbers of many institutions will continue to fall short of their short-term hopes and, more importantly, of their long-term potential. I feel compelled to ask:

If 90 percent of what is given in name of philanthropy each year comes from individuals, should we not be concerning ourselves with that enormously large bloc of individuals that know us best and, if properly attended to, will constitute our largest and most loyal source of support?

Have not the consequences of being too dependent on the large gifts of the relatively few become evident to us in the past few years?

What are the implications of securing more funding from foundations and corporations as alumni participation declines? If institutions increasingly rely on other institutions for the majority of their support, does it not dull their responsiveness to the needs and interests of the individual stakeholders? And has not the breadth, depth and majesty or American higher education arisen from an democratic impetus to serve the interests of many?

Shouldn’t those that are losing the most alumni support seek to understand and emulate those that are securing the most?

You see, there is a tale of two institutions playing out across the American philanthropic landscape. For some it is the best of times, for others the worst. In the past year, for instance, the average alumni giving to liberal arts institutions increased by 11.4 percent while declining for public research universities increased by 1.7 percent and 5.5 percent for private research universities.

As higher education in general struggles to secure the annual support of less than one in ten alumni, look below at those that consistently inspire the support of more than half their alumni, according to statistic compiled by U.S. News. One is hard pressed to draw easy conclusions from this subset. Yes, the majority are liberal arts but two have a technological focus. Yes, the majority are highly ranked but two are not. Perhaps, the common denominator among them is the ability to engage in higher learning on a human scale, to make the vast majority of their students feel as they are valued, integral part of a vibrant community. It is most certainly more than a function of the fund-raising techniques and practices employed though all are likely well-served by dedicated professionals. All of higher education would be better served if we could understand how these powerful emotional connections are created and sustained, and the extent to which they could be transplanted in different settings.

School Name

% of



U.S. News Ranking & Category

Webb Institute



Carleton College


8, National Liberal Arts Colleges

Princeton University


2, National Universities

Middlebury College


4, National Liberal Arts Colleges

Amherst College


2, National Liberal Arts Colleges

Williams College


1, National Liberal Arts Colleges

Centre College


47, National Liberal Arts Colleges

Indiana Institute of Technology



Davidson College


9, National Liberal Arts Colleges

Thomas Aquinas College


71, National Liberal Arts Colleges

One way or the other, we must find a way to place the issue of declining alumni support much higher on the national agenda. The total amount given to higher education isn’t really going up any more and isn’t likely to in a way that will benefit many more institutions until we do.

No comments: