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Endowments increase for universities nationwide

Giving to colleges and universities increased by 3.2 percent in the 2004 fiscal year, the first increase in contributions since 2001, according to a report released on Wednesday by the Council for Aid to Education.

Higher-education institutions collectively raised $24.4-billion in 2004, says the annual report, “Voluntary Support of Education.” The total is up from the $23.9-billion collected in 2002 and again in 2003, and surpasses the $24.2-billion raised in 2001.

“Historically, when the economy is strong, giving goes up,” said Ann E. Kaplan, director of the survey on which the report is based. The survey collates fund-raising reports from 971 institutions.

Harvard University was again at the top, bringing in $540.3-million in the 2004 fiscal year, which for most respondents to the survey ended on June 30. Princeton University, the University of Arkansas at Fayetteville, the University of Virginia, and the University of Wisconsin at Madison fell off the top-20 list, replaced by the Massachusetts Institute of Technology, Ohio State University, the University of Michigan system, and the University of North Carolina at Chapel Hill.

“If you look at the overall increase, it tracks a little ahead of inflation,” said John Lippincott, president of the Council for Advancement and Support of Education, “and that’s certainly good news.”

Ups and Downs
The largest portion of contributions came from alumni, who gave 27.5 percent of the total, followed by foundations, which accounted for 25.4 percent. The proportion of nonalumni individual donors increased to 21.3 percent from 18 percent in 2003, buoying overall individual giving, which was responsible for almost half of the total raised.

While the total amount of alumni giving increased, the percentage of alumni making donations declined for the third consecutive year, to 12.8 percent, according to the survey.

That decrease could be attributed to the improved databases and technology that colleges are using to track alumni-contact information. The percentage of alumni who donate is based on the number of living alumni for which a college has good addresses.

“There is evidence that institutions are working hard to update databases,” Mr. Lippincott said. “When you do that, you increase the denominator in the calculation.”

As foundations continue recovering from the market declines of the past few years, their contributions to higher education decreased by 6.1 percent in 2004, to $6.2-billion, down from $6.6-billion in 2003. About a third of the foundations that give to colleges are family foundations, whose officials often opt to make personal gifts instead, Ms. Kaplan said.

“Foundations continue to be a reliable, stable source of support,” she said.

Giving by corporations was up by 3.5 percent, and donations from religious organizations dropped by 2.8 percent.

Nonalumni Generosity
One surprise in the survey was the increase in gifts from individuals who are not alumni.

“Nonalumni support higher education for different reasons than alumni — usually they support particular programs,” Ms. Kaplan said. “The market was up, so it was an opportune time.”

Michigan, which announced a $2.5-billion campaign last May, is getting more nonalumni donations in areas like the arts and the health center.

“I think that people are flocking to support programs that they perceive to be high quality,” said Robert W. Groves, associate vice president for individual giving and director of Michigan’s campaign. “If you are a philanthropist and looking for the best three or four programs in the country, it’s possible to figure out where the return on investment will be higher.”

The problem with survey data, Mr. Lippincott said, is that “they don’t explain themselves.”

“It may just be a factor of timing that more major gifts came in over the year, though the increase underscores the fact that the wider institutions cast their nets, the more successful they’re going to be,” he said.

Gifts for capital purposes, like buildings and endowments, increased by 1 percent in 2004, and contributions earmarked for current operations were up by 5.4 percent.

Money from voluntary support has accounted for less than 8 percent of institutions’ expenditures over each of the past three years, according to the survey.

Mr. Lippincott predicted another single-digit percentage increase in private giving in the 2005 fiscal year, but he recommended caution in reacting to success.

“I’m concerned that when we applaud the results,” he said, “there is a tendency on the part of some that it means that the state or federal governments can reduce their support.”

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