Analyzing the Latest Data on the Decline in Giving to Higher Education 

In late February, the Council for Advancement and Support of Education (CASE) published the key findings of its annual Voluntary Support of Education survey. These findings are based on fundraising data for the 2022-23 academic fiscal year (FY), typically July 1 through June 30. 

The top line news is charitable giving to higher education during that period totaled $58 billion, which is $1.5 billion less than the amount received the previous year. The $59.5 billion contributed in FY 2021-22 was the highest amount ever contributed. The drop in 2022-23 represents a decline of 2.5% (5% if adjusted for inflation).   

A cursory look at the sources of gifts to colleges and universities indicates “organizational” giving increased slightly, while individual giving from alumni and non-alumni alike drove the decline, dropping over 10% (12% if adjusted for inflation). Those statistics do not tell the whole story, however. CASE includes corporations, foundations and donor-advised funds (DAFs) in the broad category of organizations. As Sue Cunningham, CASE president and CEO, noted, “Many individuals who historically would have been counted in the individual category are now giving through donor-advised funds. It’s certainly a vehicle that we’ve seen growing.”  

Cunningham added individual donors also give to higher education through personal and family foundations and closely held companies, so even more of their giving may be masked under the “organizational” heading. The actual breakdown in that category – which accounted for a 2.7% increase in FY 22-23 (0.1% if adjusted for inflation) – is a 3.2% increase in corporate giving, a 1.8% decline in foundation giving and a 4.4% increase in giving from other organizations including DAFs. Last year’s report was the first to require reporting on giving from DAFs. Both individual higher education institutions and CASE are currently assessing how DAF gifts should be described. 

Jenny Cooke Smith, senior director of CASE Insights Solutions, and Brian Flahaven, vice president/Strategic Partnerships, graciously agreed to speak with me recently about the latest giving numbers. Asked whether CASE had seen a drop in giving after the Tax Cuts and Jobs Act expanded the standard deduction in 2017, Flahaven said no such drop occurred.  

In fact, CASE reports indicated a significant increase in donations from $43.6 billion in FY 2016-17 to $46.7 billion in FY 2017-18. This is less surprising than a reader might imagine. Wealthy donors would likely continue to qualify for a charitable deduction, while smaller donors – particularly alumni – would continue to express a historic loyalty to the institutions they attended.  

Flahaven also said excluding the period 2020-2022, giving to colleges and universities has generally correlated with fluctuations of the stock market, an observation that agrees with Cunningham’s comments in the latest report. “While colleges and universities operate on fiscal years which typically begin on July 1 and June 30,” she noted, “donors plan giving based on the calendar year.” The primary market indices were indeed down on December 31, 2022, with the S&P 500 alone showing a nearly 20% loss in a year when total charitable giving also declined

If the correlation with market performance at the end of the calendar year continues in FY 23-24, higher ed fundraising should produce a banner year. Reversing performance remarkably from 2022, the S&P 500 increased 24% by December 31, 2023, with the Dow Jones average up nearly 14% and the Nasdaq up 43%.  

CASE representatives and higher education officials remain positive about future philanthropy in public conversations. But it is certainly reasonable to anticipate some fallout from the “donor revolt” after October’s Hamas attack on Israel and the many antisemitic campus demonstrations that have continued into this spring.  

Alumni gifts – both large and small – will no doubt continue for all sorts of projects, as evidenced by a recent $25 million donation toward a $60 million, six-story cylindrical tower to serve as the University of California-San Diego’s alumni and welcome center. But will the nature of gifts begin to change in the wake of increased donor dissatisfaction, and if so, how? 

Will we continue to see an increase in the number and size of gifts over $100 million as we saw in FY22-23, or will wealthier donors shrink or discontinue their support? Will higher ed receive fewer gifts for general operating support and more restricted donations to ensure adherence to donor intent? Will donors choose to make fewer gifts to endowments and replace them with short-term gifts that are easier to monitor and evaluate?  

Will next year’s CASE report show a decline in gifts to elite universities as donors seek other options in post-secondary education? How will the anticipated increase in women’s and Gen X philanthropy impact higher ed gifts? 

In light of these and other questions about trust in and support for our nation’s colleges and universities, we will be following CASE, Giving USA and other organizations tracking philanthropy in this area throughout 2024.  

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