College Donations Reach Record High in 'Astonishingly Good' Year

Charitable donations to colleges and universities increased 9 percent, to $33.8 billion in 2013.

Students walk the campus of Stanford University.

Stanford University was the top fundraising institution in 2013, gathering $931.57 million from donors.

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Alumni, foundations, religious organizations and corporations gave nearly $34 billion to North American colleges and universities in 2013, the highest annual donation amount in recorded history.

According to an annual survey conducted by the Council for Aid to Education, charitable contributions to colleges and universities increased 9 percent from 2012, recovering from a decline in 2009, when giving fell from a previous record high of $31.6 billion to $27.85 billion. All of the top 10 institutions with the highest amount of donations raised at least $400 million in 2013.

Ann Kaplan, the survey's director, says the 2013 set a new standard for giving going forward.

“This really was an astonishingly good year,” she says.

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That’s because since the 2009 decline in giving, donations have only grown at an incremental pace.

“It was nearly stagnant,” Kaplan says.

For comparison, 2012 giving increased by just 2.3 percent, Kaplan says, which was barely ahead of the rate of inflation.

“You could almost say it didn’t grow at all,” she adds. “This year’s growth of 9 percent comes on top of a very low platform.”

Stanford University led the list of institutions with the highest levels of donations, with $931.57 million in gifts, followed by Harvard University and the University of Southern California, which raised $792.26 million and $674.51 million, respectively. Together, the top 10 fundraising institutions accounted for 1 percent of schools that responded to the survey, but raised 17.3 percent of the total $33.8 billion in contributions.

And three of those top 10 universities – Stanford University, Columbia University and the University of Southern California – each received individual donations of more than $100 million, according to the survey.

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The reason for those large donations may come from the fact that those universities run other operations, rather than just instruction, Kaplan says.

“They do medical research, they have arts programs, and for donors that make very large gifts, that’s what they’re looking for,” Kaplan says. “If you’re going to make a $100 million-plus gift, you probably have a purpose in mind, and you’re trying to be effective in a certain area of social change or scientific research. Those are the institutions that have the capacity to make use of that kind of fund at that level.”

That sentiment is in line with the results of the survey. Columbia University, for example, received a $227.5 million donation to construct a new science center in New York City honoring Jerome L. Greene, a Columbia alumnus.

Donations for capital purposes – which include funds for property, buildings and equipment, as well as gifts to endowments – also increased by more than 10 percent between 2012 and 2013. The other large category of gifts is for current operations – funds that can be used during the year they are contributed, at the discretion of the school or for a general purpose designated by the donor. Current operations gifts also increased from 2012, but at a slower pace. That's in part because those donations are more closely linked to the economy, while capital purpose gifts correlate more closely with the stock market performance, Kaplan says.

“This year, while the general economy was improving, the stock market in the period we studied increased by … more than 15 percent,” Kaplan says. “That made the stock that fuels these capital purpose gifts worth more.”

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Meanwhile, the amount donated by alumni increased in 2013, although alumni participation decreased. To measure alumni participation, the researchers divided the number of alumni donors by the number of alumni the college has contact records. Although at 1.7 percent, the decline in the number of alumni donors was quite small, Kaplan says, the rapid growth of “alumni of record” causes participation rates to drop.

But this isn’t necessarily a bad thing, Kaplan says. In fact, it’s a “really good sign” because the base of potential donors is actually increasing.

“If we want those people to give us money, it’s just going to take a little longer,” Kaplan says.