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Donations to Higher Education Follow Economic Patterns
A report by the Council for Aid to Education (CAE) indicates that the economic recession has delivered another blow to higher education: The biggest drop in private donations since the CAE started collecting data 40 years ago.
Each year, the CAE publishes the Voluntary Support of Education (VSE) survey, which reports on charitable contributions to U.S. colleges and universities from private donors and alumni. In their latest report, the CAE found that private gifts declined a staggering 11.9% in 2009. By contrast, each of the previous ten years saw a 4.1% increase in donations to higher ed.
Gifts for capital purposes suffered the worst decline, dropping 25% between July 2008 and July 2009. Capital funds typically go to endowments, property, buildings and equipment. The report notes that this was expected - the NYSE Composite Index dropped 28.5% in the same period, and the health of this type of giving is typically tied to the stock market because contributions tend to be made in the form of appreciated securities.
Current operations giving, on the other hand, only dropped 0.7 percent. The CAE suggests that this is because operations gifts have historically been related to the GDP, not the stock market, and the GDP only fell 2.4% in the fiscal year of the current study.
From the 2009 Voluntary Support of Education survey, page 4
Fiscal year 2009 also saw a record low in alumni participation, as defined by the percentage of total alumni that donate to their alma maters. The total number of alumni on record increased by 3%, but the number of contributing alumni decreased by 5.6%. This brought the level of alumni participation down to 10%, the lowest level recorded on a VSE survey.
And finally, to top off the bad news, the market value of university endowments dropped in 2009 due to a combination of a drop in new contributions and poor investment performance. According to the most recent data available when the report was released, higher education institutions saw a 22.3% decline in the market value of their endowments in the last fiscal year.
However, the CAE points out that none of this news should be a surprise in the current economic climate. Ann E. Kaplan, director of the VSE survey, calls 2009 a 'difficult year for colleges and universities.' But the donor-school relationship has weathered economic difficulties before, and Kaplan leaves us with the hopeful reminder that, as historical patterns indicate, 'as the economy recovers, contributions will rise.'
Top 10 Fundraising Universities for 2009
|School Name||Dollars Received|
|1. Stanford University||$640.11 million|
|2. Harvard University||$601.64 million|
|3. Cornell University||$446.75 million|
|4. University of Pennsylvania||$439.77 million|
|5. Johns Hopkins University||$433.39 million|
|6. Columbia University||$413.36 million|
|7. University of Southern California (USC)||$368.98 million|
|8. Yale University||$358.15 million|
|9. University of California Los Angeles (UCLA)||$351.69 million|
|10. University of Wisconsin-Madison||$341.81 million|
Source: Council for Aid to Education