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Contributions to Colleges and Universities Grow by Nearly 5 Percent

(Feb. 24, 2006) Colleges and universities in the United States experienced a 4.9 percent increase in contributions in 2005, according to the annual Voluntary Support of Education (VSE) survey released by the Council for Aid to Education (CAE).

Contributions in 2005 increased to $25.6 billion, driven strongly by individual giving that accounted for nearly half of all giving. Giving by alumni grew by 6 percent. In contrast, giving by nonalumni actually dropped by 3.8 percent in 2005. However, in the previous year it increased by 21.5 percent and has fluctuated wildly over the past decade.

A more troubling trend is the decrease in the percentage of alumni making contributions. Even as total alumni giving increased, the participation rate dropped to 12.4 percent. The rate has declined each year since 2001, when it stood at 13.8 percent. The analysis still results in a decline, even after removing two-year institutions, which have much lower giving rates than four-year institutions.

The report cites several potential reasons for this drop, including:

  • Better software and techniques to maintain accurate address records, resulting in greater numbers of alumni and leading to smaller percentages of those giving
  • Institutions’ focus on larger gifts
  • Fewer alumni declining to make contributions

The Top 10

Based on findings from the survey, the nation’s top 10 fundraising universities and dollars received are:

1) Stanford University ($603.59 million)
2) University of Wisconsin–Madison ($595.22 million)
3) Harvard University ($589.86 million)
4) University of Pennsylvania ($394.25 million)
5) Cornell University ($353.93 million)
6) Columbia University ($341.14 million)
7) University of Southern California ($331.75 million)
8) Johns Hopkins University ($323.10 million)
9) Indiana University ($301.06 million)
10) University of California, San Francisco ($292.93 million)

The University of Wisconsin–Madison received a $296 million foundation grant, the result of the conversion of Blue Cross & Blue Shield United of Wisconsin from nonprofit to for-profit status. The grant accounted for more than one-third of the growth in foundation funding to higher education institutions.

Alumni and foundations each represented about 27 percent of all higher education support in 2005. Nonalumni giving accounted for almost 20 percent, while corporate giving made up approximately 17 percent. Giving by “other” organizations (6.8 percent) and religious organizations (1.4 percent) made up the rest.

A slight majority of gifts (55.5 percent) were given for current operations, while 44.5 percent were designated for capital purposes.

About the Report

These findings are from the annual VSE survey, which has tracked giving to higher education and private K-12 schools for more than 50 years. The 1,005 institutions that participated in the 2005 survey represent nearly two-thirds of the nation’s four-year institutions, including 90 percent of research and doctoral institutions. Respondents generally account for about 85 percent of the voluntary support raised by all colleges and universities.

An executive summary of the VSE report is available on the CAE website, and the full report will be available in May 2006.

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