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Check-Up Clinic: University FR Declines

Posted: 6/13/2020

Click here to read on Chronicle of Philanthropy

College Fundraising Expected to Drop Sharply in Next Few Years

Development leaders say they expect steep declines in big gifts, especially those of more than $1 million

By Emily Haynes

College fundraisersare bracing for donations to take at least as steep a nosedive over the next several years as they did after the Great Recession, according to a survey of 110 development leaders released Monday.

More than four in 10 fundraisers said they expected giving to drop by at least 10 percent in the 2020 fiscal year, which closes on June 30. A slightly higher share said they expected that level of decline to continue in 2021, with a big share of the drop coming from an expected loss of multimillion-dollar contributions. And one in five say they expect dips of 20 percent or more.

By comparison, colleges faced their steepest drop in giving on record in 2009, during the financial crisis, when donations fell 11.9 percent, according to the Council for Aid to Education.

The findings released today come from a study conducted by the consultancy EAB, and they point to an added financial challenge as colleges reel from their quick switch to online learning in March and continued uncertainty about whether they can or should reopen in the fall.

The new study found that few fundraisers are confident that private donations can do much to shore up college finances in the 2020 fiscal year.

Big Gifts Hit Hard

Another survey of 415 higher-education fundraisers, conducted in April by the educational advancement firm Washburn & McGoldrick, found similar results. Forty-three percent of college fundraisers doubted that their institutions would reach their fundraising goals for the financial year. Among fundraisers at universities that award master's degrees, that share was 54 percent.

While giving at all levels could be hit, fundraisers are most focused on the large contributions from the affluent, and those forecasts are gloomy.

Many top college fundraisers are worried about a multiyear slowdown of gifts of $1 million or less. They said the amount raised in gifts of that size could fall 10 percent to 19 percent.

But the situation is even more bleak for gifts over $1 million: Those donations could decline by 20 percent to 30 percent during in both the 2021 and 2022 fiscal years, according to some fundraisers' projections.

Fundraisers are worried not just about the impact of the economic downturn, but also the long-term effects of social-distancing measures. They said they were concerned about their inability to invite potential big donors to campus or meet with them one on one to establish a relationship that could lead to significant gifts now and in the future.

Among the other findings:

  • Despite the economic and health crisis, 77 percent of collegessay they will begin the quiet phases of their capital campaigns in the 2021 fiscal year as planned. Among those already in the quiet phase, 10 percent say they are postponing their public launch date by at least a year.
  • Top fundraisers are largely confident that they will be able to invite prospective donors back to campuses in 2021.
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