Private Giving 2007

The Council for Aid to Education has released its figures for higher education philanthropy in 2007. Overall donations were up 6.3 percent, which is close to the annual average for the last ten years. The Chronicle of Higher Education story also offered what have become standard comments about the skew in private giving towards the very top.

Large donations to the nation's wealthiest colleges accounted for much of the increase. The top 20 recipients (see table), which represent just 2 percent of the survey's respondents, raised more than a quarter of all the contributions.

"The top 20 historically have controlled a lot, and they're controlling a bigger and bigger share of private donations," said Ann E. Kaplan, the survey's director. "It's large gifts to large institutions that drive national trends."

The top 2 percent of institutions also accounted for 30 percent of the year-over-year growth in these donations. And "megagifts" remain a major factor in the shaping of higher ed.

Everyone is worried about the impact of the economic downturn that has already started. Ironically, it may only increase the influence of the megagifts. As one CHE consultant noted, "If the market falls and people's wealth shrinks, then you start seeing a slowdown, or people postponing capital contributions. . . . But the big donors, who drive these numbers anyway, tend to be stable."

There's another issue that is never mentioned. Little of this giving is unrestricted, so at public universities it cannot be applied to general operating costs to make up for public funding cuts. When our UC Planning and Budget committee heard officials from the Treasurer's Office talk about this, they estimated that unrestricted gifts are 2 percent of the total. Even in scholarship giving, only 20 percent are unrestricted. Over a period of years, the effect is not a happy substitution of public with private funding, but a campus divided by an iron curtain. The stem-cell research facility may be state-of-the-art, while the math department, dependent on public money, can't pay for phones in faculty offices or for TAs to give actual feedback on homework in calculus lectures with 500 students.

There is no evidence at all that private money is willing to pay for mass quality higher education - broad access at a top level. It pays for special projects for the best and the most famous. We are getting plenty of that, but losing the mass quality that underwrote both post-war prosperity and general quality of intellectual life.