Branching out beyond campus walls to forge relationships does have its advantages.
Nearly half of all gifts given to institutions of higher education do not come from alumni, showing the importance of administrators and leaders to create new connections because the next transformational donor may have no ties to their colleges and universities.
That insight, along with deep data into who is investing and why donations are made to institutions, is outlined in the new Study of Principal Gifts to U.S. Colleges and Universities done by the nonprofit Council for Advancement and Support of Education (CASE) and Bank of America.
“The study shows that institutions of all types should be vigilant in identifying and cultivating supporters,” said Cara Giacomini, CASE’s Vice President, Data, and Research and Technology. “One can never be sure when—or from what source—a gift may come that can have a dramatic impact on the institution for years to come.”
More than 20% of all donations are given by individuals with fewer than three years invested in a college or university, though nearly half of big givers had ties to specific institutions for a decade or more. The majority of those who do make sizeable donations said they hope it inspires others to do the same.
Though not always headline makers, principal gifts can be transformational, as the median value of the largest ones has grown by 31% over a 16-year period (2005-2021) to $10 million. Most of the gifts come from foundations, private donors or trusts, while cash is given 40% of the time. Principal gifts comprise about 9% of the overall support an institution receives, with community colleges even more reliant on them at 12%.
While new buildings and academic programs were popular choices for donors, the majority of gifts went toward investing in students, including scholarships and financial aid. That was especially true over the past two years. The arts and humanities, STEM fields and business/entrepreneurship all drew high interest from givers. Part or all of the investments in some fashion were targeted to endowments.
“Donors have continued to generously support causes and institutions they care about despite the stresses experienced during the pandemic and its aftermath,” said William Jarvis at Bank of America’s Philanthropic Solutions Group. “In the years ahead, institutions will need to invest in discerning these donor’s interests and values in order to continue to grow major gifts.”
And that takes time. Aside from building relationships, which may happen across many years, it takes nearly 20 months from that first hint of an investment to have that official gift stamped. Chief advancement officers and presidents are almost always involved in the process, but it may involve other stakeholders, such as deans, faculty chairs and even athletic directors.
The biggest single gift from an individual fluctuated from 2005 to 2021, with Stanford University receiving the largest at $341 million. One institution received $300 million last year. The top ones all have eclipsed more than $100 million in each of the past 10 cycles. Median gifts from individuals from the 25th percentile to the 75th were all over the map, from $230,000 to $2.7 million last year.
Foundations play a major role in giving as well, with large gifts often surpassing $100 million over the past decade, including one notable outlier–the $1.2 billion given by Bloomberg Philanthropies to Johns Hopkins University just prior to the pandemic. Foundation support overall has increased steadily over the past five years, tying its high from 2015 of 9.2% in 2021. The average principal gift has jumped by more than $200,000 over the past 16 years to $836,000 last year.
Within the report, CASE highlighted a pair of surveys–a previous one on voluntary support of education (VSE) and this one on principal gift giving. It also features a number of individual stories of giving, including how the Ringling College of Art and Design in Sarasota, Fla., landed a $15 million donation to go toward virtual reality and why donors chose to give $17 million toward the performing arts at the California State University at Northridge.