Donors shower colleges with nearly $34 billion in 2013, a record

The rebound of educational giving suggests that charitable donors who are seeking to make a 'transformational impact on a cause' are confident in their own finances and the economy as a whole.

Charitable donations to colleges and universities climbed 9 percent in 2013 to hit an all-time high of nearly $34 billion, a new report says, another sign that the economy is on the rebound.

This is good news for institutions of higher education of all sizes, says Ann Kaplan, director of the Council for Aid to Education’s annual Voluntary Support of Education survey. The CAE, which has been conducting the VSE survey since 1957, released the results for 2013 Wednesday.

While the usual suspects – Ivy League schools – topped the list of major recipients, many of the schools that saw the highest percentage increase in donations from 2012 to 2013 are smaller community colleges, she says.

The CAE findings are consistent with several other measures of general philanthropy and of university giving.

Overall charitable giving increased nearly 5 percent in 2013, according to the most recent Charitable Giving Report by Charleston, S.C.-based Blackbaud Inc., which supplies software and services to nonprofit organizations.

Researchers at the Indiana University’s Lilly Family School of Philanthropy in Indianapolis and the Giving Institute in Chicago have also seen a steady increase in giving overall since 2009.

That timeline is not surprising to philanthropy experts and economists.

“Giving to higher education follows changes in the economy,” Ms. Kaplan says. “If we are in a recession and the stock market crashes, giving goes down. In fact that’s pretty much the only time it goes down.”

While donors who are in a position to make six- and even nine-figure contributions aren’t exactly feeling poor during a recession, they still tend to be reluctant to make major gifts during an economic downturn, Kaplan says. Further, many donations are made in shares of stock. When the market is down, those shares aren’t worth as much to the institution or to the donor in terms of tax credits.

That doesn’t mean that philanthropy completely seizes up during recession, says Una Osili, Lilly Family School of Philanthropy’s research director. During lean times, donors tend to focus their contributions on organizations that address basic needs. The rebound of educational giving suggests that contributors are feeling confident enough in their own finances and the economy as a whole to begin to shift back to their pre-recession priorities.

Those priorities tend to focus on making “a transformational impact on a cause,” Dr. Osili says. Giving to universities offers a variety of options for doing just that.

“You could give a gift to a medical school that supports cancer research,” Osili says. “At the same time you could support a music program. Another gift might be scholarships for needy families that helps to alleviate poverty. Higher education offers donors increasingly diverse opportunities to have transformational impact.”

Investment in those programs not only signals a healthier economy today, but also fosters a healthy infrastructure for the future, Kaplan says.

“Colleges and universities are the hub of a lot of the social change, medical research, and scientific progress around the country, and that infrastructure is very important,” Kaplan says.

In Palo Alto, Calif., fundraising efforts at Stanford University have bankrolled a massive rebuilding of Stanford Hospital, a major community hospital in the Bay Area that offers specialized care for patients from all across the country, says Martin Shell, Stanford’s vice president of development.

“The new hospital that we are building right now and the clinical programs that will populate that facility are going to save lives. In fact, they are already saving lives,” Mr. Shell says.

Stanford brought in $931.57 million in donations last year, more than any other educational institution. Of that, $60 million will go toward supporting students who are accepted to the school but are unable to afford tuition.

“At a time when the world looks at a lot of things that maybe are not going so well, the role of education to help people realize their opportunities has never been more important than it is now,” Shell says.