Focus, Higher Education, and Nonprofits

2014 donations to higher ed reach record $37.45B

Local academic institutions are riding the wave of a strengthening economy.

February 6, 2015
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West Michigan-based academic institutions were among colleges and universities in the nation that experienced an increase in charitable contributions during 2014 — the strongest gain in voluntary support since 2000.

The Council for Aid to Education, a New York-based national nonprofit organization, announced Jan. 28 charitable contributions to colleges and universities in the United States increased 10.8 percent, from approximately $33.8 billion in 2013 to a record high of $37.45 billion in 2014, according to its 2014 Voluntary Support of Education survey.

West Michigan-based institutions Calvin College, Ferris State University, Hope College and Western Michigan University were among responding colleges and universities who saw an increase in funds raised during 2014.

The annual survey provides a comprehensive report on charitable contributions for more than 1,000 responding higher education institutions across the country, and is published by CAE in sponsorship with the Council for Advancement and Support of Education.

The 2014 VSE survey also includes a breakdown of donations by purpose and source, including: alumni and non-alumni individuals, corporations, foundations and other organizations.

Based on the responding academic institutions, the survey indicated voluntary support for colleges and universities from alumni comprised 26.3 percent of total contributions and increased 9.4 percent from $9 million in 2013 to $9.85 million in 2014. Non-alumni donations rose 4.8 percent from $6.2 million to $6.5 million in 2014.

Financial support from foundations made up 29.9 percent of total contributions in 2014 and rose 12 percent to $11.2 million.

Corporations and other organizations increased their charitable contributions by 12.7 percent and 18.6 percent, respectively.

The report noted $21.8 million of the voluntary support was allocated to current operations, while more than $15.6 million was designated for capital purposes.

Calvin College, classified by the Carnegie code as a private baccalaureate institution, raised $23.4 million in funds in 2014, up from $23.1 million in 2013.

Ken Erffmeyer, vice president for advancement at Calvin, said the report is based on cash in the door and, in terms of development, there is a difference between cash and financial pledges.

“We had the second best year ever in development at Calvin College, with more than $35 million in pledges,” said Erffmeyer. “We are tracking $4.3 million ahead of last year in terms of cash in the door. I am optimistic about the future. … I feel like Calvin is getting back to a healthy place.”

In May 2014, the liberal arts college announced securing $25 million in donor pledges that would go toward reducing its long-term debt of roughly $116 million. The announcement was made eight months into its fundraising campaign, in advance of the original deadline of 2017.

In light of the college’s effort to bring down long-term debt, Erffmeyer said the amount of funds raised last year is a testament to community support.

“It is a testimony to our Calvin alumni and friends of the college who just really want to help our students. I think the college has done a good job being very transparent about our financial need and the sort of circumstances we are in. The donors have responded very well to our transparency,” said Erffmeyer.

“Personally, I was humbled and blown away. Primarily, that money went for debt so it is not even for a capital project. The community in Grand Rapids and outside of Grand Rapids, the Calvin community, are responding to that need.”

Erffmeyer said the economic stability of the country has played a role in financial giving, as consumer confidence in the stock market and economy has increased.

“When people have greater confidence in the economy, they have a greater confidence in pledging support,” said Erffmeyer. “It has a big impact, and I think many alumni are becoming more aware of higher education and concerned about student debt, so I think many alumni and friends are contributing to colleges to make education affordable.”

Jeff Puckett, vice president for development and alumni engagement at Hope College, said although fundraising successes are relative to a number of specific context and capacity issues of each college or university, all benefit from the notable growth of donor confidence in a strengthening economy.

“I, of course, am highly encouraged by this trend,” said Puckett. “Consequently and more specifically, donor faith or lack thereof in the economic environment continues to foster an increasing and understandable demand by donors to see their philanthropic investments tied clearly and visibly to specific outcomes. It’s really changing the landscape of stewardship.”

Hope College raised more than $22.5 million in 2014, which is a $6.6 million increase from roughly $15.9 million in 2013. With the increase, Puckett said there is much to be gained, but it is also important to be able to demonstrate fundraising momentum for both current and future efforts.

“It’s an inordinately strong indication of the great job the college has done in articulating the importance of its mission and strategic vision that supports the mission,” said Puckett. “Of course, it is a wonderful testament to the college’s success in building strong relationships with the alumni, parents and friends who support it.”

Puckett assumed the leadership role at Hope in January after his appointment was announced last October. He brings more than 20 years of experience in fundraising and higher education development. With fundraising strategies and efforts tied to a number of issues, such as donor confidence in the economy and effective communication from the institution, Puckett said an institution’s ability to respond to the correlating factors is critically important.

“Those strategies are linked to a wide variety of issues, including the college’s ability to communicate the impact of and return on philanthropic investment in those fundraising priorities, but at the end of the day, there is no substitute for the careful nurturing of strong, supportive relationships,” said Puckett.

While other West Michigan-based colleges and universities also saw a rise in charitable contributions, others experienced a decline.

Ferris State University experienced an increase from $8.5 million in 2013 to nearly $9.15 million in 2014, and Western Michigan University’s voluntary support reached more than $44 million in 2014, up from $36.3 million in 2013.

Grand Valley State University, however, experienced a decline: from roughly $19.2 million in 2013 to $16.4 million in 2014. Lake Michigan College in Benton Harbor received approximately $408,000 in financial support in 2014 versus more than $424,000 during 2013.

Other results from the 2014 survey included: The aggregate value of endowment figures increased 15 percent based on 959 institutions reporting figures; and while the average gift per contributing alumnus increased 25.5 percent, alumni participation declined 0.4 percent from 8.7 percent to 8.3 percent.

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