Higher Education and Marketing, PR & Advertising

Region’s colleges bank $112 million in giving

U.S. colleges and universities raised $43.6 billion in donations, up 6.3 percent from 2016.

February 16, 2018
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Six West Michigan colleges received more than $112.74 million in donations last year.

That’s according to the annual Voluntary Support of Education survey by New York-based Council for Aid to Education. The survey found 933 colleges and universities in the U.S. raised $43.6 billion in charitable contributions in 2017, an increase of 6.3 percent from 2016, the highest level reported since the survey’s inception in 1957.

Ann Kaplan, vice president of the Council for Aid to Education and executive director of the Voluntary Support of Education Program, said the survey presents higher education fundraisers with data they can use to make financial and hiring decisions, as well as compare their own institutions with others.

Kaplan also said it should provide some context to policymakers about the role charitable giving has or could have in higher education fundraising.

The number of West Michigan schools that respond to the survey varies year-to-year based on a number of factors, Kaplan said.

The six schools that responded to the survey this year are Calvin College, Ferris State University, Grand Valley State University, Hope College, Lake Michigan College and Western Michigan University.

Kalamazoo-based WMU had the highest level of contributions in the area with $45.34 million, a decrease of $13.15 million from the previous year.

Hope and Lake Michigan College showed decreases of less than $2 million from 2016; Calvin and GVSU had increases.

Timothy R. Terrentine Sr., WMU's vice president for development and alumni relations, said “ebbs and flows” are normal in fundraising and happen for varying reasons. Work on certain projects may not show itself in data for a number of years, for example.

“Philanthropy is a marathon and not a sprint,” he said.

Listed below are data showing responding schools’ charitable contribution totals in 2017, compared to data from the past two years.

  • Calvin College, $26.7 million; up $7 million from 2016, up $2 million from 2015

  • Ferris State University, $10.31 million; up $3.45 million from 2016, up $1.57 million from 2015

  • Grand Valley State University, $13.4 million; up $840,000 from 2016, up $2.2 million from 2015

  • Hope College, $15.64 million; down $1.54 million from 2016, down $9 million from 2015

  • Lake Michigan College, $1.39 million; down $1.39 million from 2016, down $610,000 from 2015

  • Western Michigan University, $45.34 million; down $13.15 million from 2016, up $400,000 from 2015

The top 20 schools in the U.S. raised $12.23 billion, 28.1 percent of the 2017 total. In 2016, the same 20 institutions raised $11.07 billion.

Overall gifts for capital purposes increased 12.3 percent to $25.8 billion, and gifts for current operations increased 2.6 percent to $17.8 billion.

The report showed personal giving drove the overall 2017 increase. Donations from alumni reached $11.37 billion, an increase of 14.5 percent, while donations from nonalumni individuals reached $7.86 billion, an increase of 4.5 percent. These increases followed the 2016 declines of 8.5 and 6 percent, respectively.

Alumni support for capital purposes increased by 16.7 percent and support for current operations increased by 8.7 percent in a sample of 663 institutions that provided data on that subject.

Kaplan said a strong stock market was a factor in increased personal giving.

The report said a group of 434 institutions provided data that showed the value of gifts made in the form of securities increased by 26.6 percent, and the number of such contributions increased by 16.9 percent.

Foundations were the largest source of support, representing $13.13 billion in donations, an increase of 5.5 percent. Contributions from other organizations, including donor-advised funds, increased by 3.1 percent to $4.64 billion.

Giving from corporations did not increase from 2016 levels.

The smaller increase of contributions by organizations than by individuals is because those commitments are based on the previous years. The stock market was weaker in 2016 than in 2017, and this is reflected in the smaller increase in gifts from organizations than from individuals, the report said.

Also affected by the stock market were university assets; endowment values increased 9.1 percent.

Kaplan said support likely will continue to increase if the stock market continues to do well through the end of the fiscal year on June 30. She also said some donors may have made prepaid contributions in December 2017 to avoid being affected by the new tax law, H.R.1.

The new law is expected to have “mildly negative” outcomes on giving, Kaplan said.

There are several aspects of the law that may affect outcomes going forward.

The standard deduction increase, the loss of deductions for a portion of state and local taxes, and the mortgage interest deductibility cap will lead fewer households to itemize, which reduces the tax incentive for charitable giving.

“Some people will cut back on their giving,” Kaplan said.

This will affect smaller gifts more than larger gifts, Kaplan said, “because those people who make larger gifts are likely to still be itemizing.”

The law eliminates the ability to deduct contributions that were counted toward preferred seating at athletic events, which is “quite a major change” for some institutions.

Starting in 2018, donor-advised funds may be used to pay personal pledges, which could affect the relative levels of the two.

Kaplan said the new law will not greatly affect results in next year’s survey because it went into effect halfway through the fiscal year.

Whatever economic and policy changes happen, Kaplan said it’s important for fundraisers to continue telling their stories and making the case for why they need support.

“You make that case regardless of where the economy is,” Kaplan said. “But you’ll be aware that you raise less when the things that are out of your control are pointing in the negative direction.”

When that does happen, WMU’s Terrentine said the reaction is to “be more strategic.”

Though the tax law may discourage some from donating, he said he still believes in people and that their passion for education and new ideas will shine through.

“There is real value in higher education, and I think people resonate with that if we can tell the story well and connect with people,” Terrentine said.

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