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20 Colleges Raised 28% Of All Funds In 2018: 3 Reasons Why & 4 Strategies To Address This Challenge

March 22, 2019 Kathy Bryan

Last year, colleges raised $46.73 billion ― up 7.2% from the prior year to a new record high. Slightly more than one-quarter of the funds raised were from alumni. The alumni-contributed portion of college fundraising was a comparable share to the year prior, but the majority of alumni are still not donating to their alma maters.

A Small Group Of Schools Raised More Than One-Quarter Of All Higher Education Donations In 2018

Last year, 28% of higher education donations were contributed to just 20 of the 3,700 colleges surveyed by the Council for Advancement and Support of Education (CASE). These 20 schools serve an estimated 1.6% of the nation’s 19.9 million undergraduate students, and the share of funds raised by these schools has stayed consistent for several years because most alumni are not donating to their alma maters and those with wealth typically contribute funds to schools that educate others with wealth.

Wealthy Students Attend And Give Back To Wealthy Schools

Many college advancement experts, like Ann Kaplan, the Senior Director of the Voluntary Support of Education (VSE) program at the Council for Aid to Education (CAE), believe funds are most frequently contributed to “multi-faceted” colleges and universities encompassing hospitals, art museums and research facilities. Jonathan Meer, an economist at Texas A&M and expert on charitable giving and education economies, explains the extended outlook of donors, “There’s the question of which universities are doing the basic research that may be leading to very large societal benefits in the distant future. If let’s say three decades from now [a major donation] leads to a cure for malaria or cancer treatment with a three-day course of pills, I think it would be very difficult to argue that that money maybe should have gone to a more immediate cause.” But according to Ben Miller, Senior Director of Postsecondary Education at the Center for American Progress, “Large charitable donations to the richest schools is essentially the endpoint of a cycle that rewards wealth every step along the way.” In fact, the top fundraisers also happen to be the schools with the most billionaire graduates.

The Majority Of Alumni Are Not Giving Back To Their Alma Maters

During the 2016 and 2017 school years, colleges averaged an alumni giving rate of 11.1%, and only three of the 1,106 schools that submitted data to U.S. News achieved alumni giving rates of 50% or higher.

Reason #1 Why Alumni May Not Donate In 2019: Most Alumni Don’t Understand Recent Shifts In College Funding

Adjusted for inflation, state funding to public schools decreased $7 billion in 2018 compared to ten years prior, according to the Center on Budget and Policy Priorities (CBPP). But, when surveyed by American Public Media (APM) and The Hechinger Report, only 29% of respondents knew public funding for education was down. Meanwhile, with the news regularly reporting on rising college tuitions and increasing levels of student debt, increasing college cost trends have become public knowledge. As a result, almost half of 30,000 respondents to the 2016 Burk Donor Survey replied that colleges do not need donations at the level of other nonprofits.

“It’s difficult to build a broad-based coalition and mobilize grassroots support to call for increased investment in higher education if people don’t see or understand the problem,” explained Tom Harnisch, Director of State Relations and Policy Analysis at the American Association of State Colleges and Universities (AASCU).

Reason #2 Why Alumni May Not Donate In 2019: College Graduates Are In Debt

College Graduates Debt

Student loan debt reached $1.5 trillion in 2018, based on data from the Federal Reserve, and the average student loan borrower has more than $33,000 in debt. According to Market Watch, alumni with student loans are less likely to donate to their alma maters, and they donate less when they do give. In addition, higher student loan amounts decrease the likelihood of alumni giving back.

Reason #3 Why Alumni May Not Donate In 2019: The Economy

In 2017 and 2018, the economy and stock market were hot and alumni donations were up. With a recession predicted by many to be on the horizon, alumni donations could slip.

College Fundraising Takes Significant Time And Resources

Achieving one of the top college fundraising volumes last year, the University of Michigan fundraising staff consists of 550 development professionals plus 1600 volunteers. Their recent fundraising campaign began in 2011, and is a prime example of the “new normal” that has turned university fundraising into a “nonstop endeavor,” as described by Inside Philanthropy’s Mike Scutari.

But putting more time and resources into college fundraising is not the only way to get ahead. Incorporating smart messaging and efficient infrastructure can help higher education institutions get ahead.

New College Fundraising Strategy #1: Engage Early, But Don’t Focus Only On Money

In 2018, an equal share of college donors graduated before and after 1999. When reaching out to recent graduates, Kistrel Linder, CEO of Give Campus, recommends asking for smaller donations.  "Those people [the more recent graduates] are the folks who 10, 20, 30, 40, 50 years down the line will have the capacity to make much larger gifts that will lead to some of these eye-popping headlines," Linder said. Sue Cunningham, President of the CASE, recommends schools “embed a culture of giving,” even with recent graduates who may only be able to afford $10 at a pop. But, Cunningham warns, alumni messaging should be focused on long-term engagement and community inclusivity and not strictly on encouraging donations.

New College Fundraising Strategy #2: Make It Easy To Donate Online

college online donation

Online college donations grew by 27% year over year to 30% of all donations tracked by GiveCampus in 2018. The volume of donors contributing online grew by 14% during the same period, and the average online donation amount grew by 11%. Like in almost all other areas of commerce, having an online presence is essential.

New College Fundraising Strategy #3: Make Mobile Giving Possible

Last year, more people visited the mobile versions than the desktop versions of school fundraising pages, according to the GiveCampus 2018 Giving Report. Like the shift to online media, consumers are increasingly using mobile devices to accomplish tasks ― including charitable research and giving.

New College Fundraising Strategy #4: Establish Sustained Giving Options

The average first-year value of recurring donations to colleges started in 2018 was up 35% year over year and reached an amount greater than the average one-time gift value during the same year. Plus, retained online donors gave 10% more in 2018 than in the year prior. Sustained giving has grown in popularity as an effective way for donors to contribute higher volumes without breaking the bank. For charitable causes, recurring giving represents a steady and predictable revenue flow.

Higher education fundraising is on the rise, but not all schools are benefiting from the increased flow of funds. Schools not at the top of the fundraising list must be strategic in how they engage alumni and in the giving opportunities they create.

Looking To Innovate Your College Giving Campaigns?

Contact Digital Media Solutions today.

About the Author

Kathy Bryan

Kathy Bryan is the Chief Marketing Officer at Digital Media Solutions (DMS). In this role, Kathy is responsible for all aspects of marketing and communications for DMS, the leading global martech company leveraging innovative, performance-driven brand and marketplace solutions to connect consumers and advertisers.

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