Charitable giving to higher education is now broken

There is new data about charitable giving to American colleges and universities, and it demonstrates that we’re doing it wrong.  This system is broken, in short.  The latest information illustrates major, challenging trends in higher education.

It all comes from the Voluntary Support for Education survey, conducted by the Council for Aid to Education (CAE), and only accessible by purchase, so I’m proceeding by summaries and extracts published elsewhere.
Sean Benham, basketball photoTo begin with, Americans are delighted to pour money upon… college sports.  At a time when campuses question their very sustainability, when queen sacrifices are on the rise and inequality taking off, some colleges and universities received $1.2 billion for athletics.

Donations to capital campaigns for new facilities and commitments to cover more aid for athletes helped major-college athletic departments raise more than $1 billion in 2015, according to a report released on Wednesday by the Council for Aid to Education. It was the fourth time in the past five years that gifts for athletics had crossed the billion-dollar mark.

Please note that while some of this goes to scholarships for students, a big chunk goes elsewhere, to buildings and compensation for the wealthiest in sports:

money for increased compensation for coaches…

In the past three years, Texas A&M donors have contributed more than $350 million in cash and pledges toward the renovation of the university’s football stadium and other athletics projects…

Clemson University… raised $60.1 million. Nearly half of that came from major gifts toward a $176-million renovation of facilities for football, basketball, and other programs…

That money has helped cover large capital expenses, such as new practice facilities and stadium suites…

The total picture of giving for sports skews massively by wealth.  Yes, educational inequality includes very unequal athletics.  “As in previous years, the wealthiest programs accounted for most of the contributions.”

The top 20 athletic departments reported collective donations of about $670 million in 2015 — more than half of the $1.2-billion raised.

[B]ig athletic departments have seen a marked increase in philanthropic support. Last year they brought in nearly twice as much as in 2005, according to figures the council provided to The Chronicle, with an increasing number reporting annual contributions of at least $20 million. In 2005 just five colleges raised that much money for sports. Last year 25 did.

But giving to sports programs doesn’t cover even 3% of all higher education donations.  The big picture is where the serious problem lies. Donors gave $40.3 billion to American colleges and universities last year, biased heavily towards the wealthiest institutions, according to the Chronicle of Philanthropy . “Nearly 29 percent of all money raised in 2015 — $11.56 billion — went to just 20 colleges.”

That bias is not a temporary thing, nor is it going away.  That skew is growing: “The proportion of donations going to the top fund-raising colleges has slowly increased over the past decade, said Ann E. Kaplan, survey director for CAE.”  As Inside Higher Ed notes, “the richest institutions continue to distance themselves from the rest”.  “[A] small and exclusive coterie of institutions is disproportionately benefiting from donors’ largesse.”

From that article, a useful chart:

"25 Institutions That Raised the Most Funds, 2015"

This is happening when American states have reduced their per-student support to public colleges and universities.  When income inequality has expanded greatly across the population.  When, generally, we’ve decided to privatize higher education costs.

Charitable giving to higher education expresses rising inequality among academic institutions.  Indeed, to the extent that it shapes program offerings and campus structures, these donations accelerate that inequality.  IHE again: “The wealth gap in higher education is not a new story, by any means, but it is being fed, not closed, by the behavior of major donors.”

But maybe my post’s title is too harsh.  Perhaps the system isn’t broken.  We’re not doing it wrong.  The system is working exactly as intended.  Wealthy donors increasingly give to the richest institutions, with a variety of benefits: elite education for children, influence on research, influence on education, tax shelters, ego gratification.

We could be heading towards a closed loop system.  The wealthy donate to super-wealthy campuses, attended increasingly by students from very wealthy families. In turn those students graduate from secondary schools increasingly segregated by income.

Ask yourselves, dear readers: is this what we want American higher education to be?

Faculty at the richest institutions, for whom faculty governance is a prized asset, do you still support this aspect of higher education financing?

If we focus on the positive aspects of this, that a good amount of donations head towards financial aid, have we decided to privatize financial aid?  Indeed, has privatizing higher education added another frontier to its flight from public support?  The investment angle is certainly in play:

Donors also are drawn to institutions that seem to be good stewards of their assets, [Ann E. Kaplan, survey director for CAE] said. They look to donate stock to a university with a high-performing endowment, for example, and art to a college with a prominent museum.

Higher education, an investment vehicle for the wealthy.  When did we decide this was a good thing?

Put another way, is the charitable giving system broken, or just working as intended?

(basketball photo by Sean Benham)

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6 Responses to Charitable giving to higher education is now broken

  1. Joe Murphy says:

    The more you write about this, the more convinced I become that we need a United Way for higher education. Something which could focus on programs and outcomes, breaking the dominance of the individual school brands. Consortia and state systems serve this role occasionally on the foundation level, but what about the individual donor? (Please don’t tell our development staff I said this.)

    And it’s not like we’ve never seen such a thing before. Americans of a certain age will remember frequent TV commercials for the United Negro College Fund and the slogan “a mind is a terrible thing to waste.” (The fact that we don’t see them anymore suggests there’s an important case study to investigate there.)

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    • Joe (belatedly), would this be to support students or academic programs?

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      • Joe Murphy says:

        In my head, it would focus on programs. You’ve got me thinking that it might have a disciplinary structure. If you could focus on people’s love of particular disciplines, and hand out money to relieve budget pressures or expand classroom opportunities in those disciplines, nationwide or even regionally, that would be pretty cool. The trick, though, is getting people to make big donations which ultimately end up in operating budgets, especially if you divorce that from “donors [being] are drawn to institutions that seem to be good stewards of their assets.”

        Of course, if I were starting a foundation, then financial aid to students seems like a much easier ask. More directly related to the current public debate around cost of college; easier to use student stories to chip away at an alma mater’s brand.

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      • Do you think this could be done through existing professional organizations, like MLA and AHA?

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      • Joe Murphy says:

        It would require a major change of focus for a scholarly society to commit to this kind of broad-public advocacy and fundraising for their disciplines. But… we’re imagining a new thing, and they’ve already got the attention of many of the major players (i.e. the scholars), so… sure, let’s imagine it.

        The first challenge I see is that there’s probably a transition period during which existing association programs (conferences and journals) suffer from losing priority, but the new public-facing programs aren’t paying off yet. Will the existing membership stick with the association through that period?

        Getting an organization which mostly runs its own programs to start thinking of itself as a granting agency is also a challenge. Not an insurmountable one, but it will take skilled leadership. (At every meeting, someone will ask why they don’t just spend the raised money on association projects, or charge that you’re cutting into the real work of the discipline by trying to raise money for intro courses.)

        The opportunities for collaboration are pretty interesting, though. If scholarly societies really doubled down on public intellectualism – producing a magazine or mass-market annual instead of a journal, providing programming at cultural centers or in partnership with broadcast media, committing to a free-or-low-cost track at their conference designed for members of the public… yeah, you can imagine those things leading to donations and grants. The trick, again, would be treating them as cost-efficient fundraisers and not just new association activities.

        I wonder if honors societies might be better positioned than professional societies? Phi Beta Kappa has members in all walks of life, while scholarly societies are for, well, current scholars.

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      • Great thoughts, Joe.
        I like your transition model.
        That collaboration opportunity is surely golden.

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