The Council for Aid to Education (CAE) released the annual results of its Voluntary Support for Education (VSE) survey earlier this month. The good news for colleges and universities is that charitable giving to higher education continues to rebound from the deep dive it experienced during the recession.
The VSE estimates that colleges and universities received a record $33.8 billion in 2013. This is a nine percent increase from 2012 and is up 20 percent from the low point of giving during the recession. Donors and institutions have also shown signs of moving back into an aspirational mode with giving to capital purposes rising at nearly double the rate of giving to current operations (6.9 percent vs 12.4 percent).
During the recession, institutions and donors helped to blunt the impact of the drop in giving by shifting gifts away from longer term capital projects and focusing instead on current operating costs. Giving in both areas has rebounded in the past two years, but there has been at least some sense that some signs of growth were corrections in that pattern.
Taken as a whole, the significant overall giving increase, the growth of gifts to current operations at a rate well above inflation, and the rapid increase in giving for capital purposes should give college and university leaders confidence. It seems donors are once again ready to engage and invest in the present needs and the future goals of their institutions.
These results align with a number of other objective economic and charitable indicators, as well as our own experience here at JGA. Consumers, donors, foundations, corporations, and nonprofit organizations have begun to accept that the economic recovery, while not overwhelming, is real.
While these results are extremely promising, the VSE report once again found a troubling decline in alumni participation rates. Only 8.2 percent of alumni gave to their alma maters in 2013, a slight decrease from the 9.2 percent who gave in 2012.
While the year-to-year decrease is not huge, it continues the consistent downward trend in alumni participation that has been occurring since the early 1990s. The impact of this decline has been mediated in part by the fact that the average giving by alumni has increased, it still presents a long term problem for what is the core source of support for colleges and universities.