Charitable Gifts To Higher Ed Surged In Fiscal 2022, Along With The Stock Market
Charitable giving to colleges and universities totaled a record $59.5 billion in fiscal year 2022—representing a 12.5% increase, the largest bump in higher ed philanthropy in more than two decades, according to new data from the Council for Advancement and Support of Education. It’s also the most, in dollar terms, that’s ever been given, even after adjusting for inflation.
Colleges generally report on a fiscal year ending June 30th. That means they can thank a strong stock market in December 2021, when many wealthy donors look to make tax deductible gifts of appreciated stock, for a rise in 2022 donations, said Ann Kaplan, senior director of CASE’s Voluntary Support for Education survey. “A lot of gifts that were going to be made anyway were worth more because the stock market happened to be higher,” Kaplan observed. “If the stock market had been lower, I think people might have postponed making the gift.” Of course it works the other way too—with the S&P 500 Index off 19% in calendar 2022, colleges’ gift receipts in fiscal 2023 could take a hit.
The bump in donor dollars benefitted nearly every type of institution. Public baccalaureate institutions, private specialized colleges and public research universities all saw giving jump by more than 14% in fiscal 2022, according to the survey. Two-year colleges and public masters institutions were the only two sectors where overall giving declined year-over-year, though the drop is misleading. Many community colleges and public colleges received multi-million-dollar gifts from philanthropist MacKenzie Scott in fiscal 2021, and so by comparison, fiscal 2022 looks like a slump.
“If an institution received one of those amazing Mackenzie Scott gifts the year before this study, then the year of this study their revenues may have dropped, not because things went horribly wrong, but because they had a really significant gift last year,” Kaplan said. For example, a college that reported a 50% increase in giving in fiscal 2021 and a 10% year-over-year decline in fiscal 2022 has still experienced an overall 35% giving increase since fiscal 2020.
The 20 institutions—nine public and 11 private—that raised the most money in fiscal 2022 accounted for about a quarter of all giving to colleges and universities. CASE counted seven paid gifts worth $100 million or more to the 781 colleges in its sample, though more than seven institutions announced major gifts over the past year. Among them—a $1.1 billion gift from venture capitalist John Doerr and his wife Ann to Stanford University for a sustainability school and a $125 million gift from cosmetics billionaire Leonard Lauder to the University of Pennsylvania nursing school.
These types of gifts skew the annual data, noted Sue Cunningham, president and CEO of CASE. “People just want to continue to see the graph going up,” Cunningham says. “But, broadly speaking, the trajectory is upwards across the sector and one year can’t be taken in isolation.” Giving to higher ed has only declined in two years—2009 and 2020—over the last 23 years, according to Kaplan.
Most donors make small gifts—between $1 and $500 at one time, the survey shows. Only 5% of donors gave more than $5,000 in fiscal 2022, but these gifts made up 95% of the total philanthropic dollars received by higher ed.
Alumni donations make up about a quarter of the $60 billion total. Most of those gifts—about 80%—come from graduates who have been out of college for at least 30 years. Older alumni generally have more wealth and financial flexibility. Recent alumni that have graduated in the last 10 years made up only 1.5% of alumni giving totals, which isn’t surprising given that many of them are still early in their careers and paying off student loans. Still, colleges have an interest in courting penniless young alumni—it’s these same graduates that could later strike it rich and give big to their alma maters.
More donors earmarked their gifts for capital purposes in fiscal 2022, while gifts that support current operations declined slightly. Capital projects like new student centers, stadiums, labs, and concert venues have always been popular among wealthy donors, and endowed professorships, scholarships and research support also attract major donor dollars. Cunningham notes that Scott’s gifts have inspired a trend of donors looking to give to under-resourced institutions, though very few donations are gifted no-strings-attached the way Scott’s are.
“The deep commitment philanthropically by people to American higher education is something we should be celebrating,” Cunningham said. “It’s a remarkable thing and the investment impacts lives in a way that’s really profound.”