Slowly but surely, individual gifts to colleges and universities are on the rise. What’s surprising is that in this giving space, location often dictates individual donor’s giving priorities.
Here at IP, we have reviewed major higher ed giving by individual donors over the past three years and are analyzing new gifts nearly every week. This guide explores who's making the big donations, what schools are getting the money, and what strings are attached to how the money is spent. (See also IP's main Grantfinder guide to funding for higher education).
Alumni remain the largest cohort of individual donors to higher education across all geographic regions, and this is especially true for those who give $10 million or more. The remaining individual donors may not be alumni, but they do almost always have some strong connections to the receiving school, whether they are members of a university board, professors, or parents whose children graduated from the school.
Donors with backgrounds (and fortunes) in real estate, finance, and technology seem to be giving the most overall. Gifts drawn from old family money are dwindling, and no longer represent a large percentage of support, as once was the case.
Southern schools received the largest number of recent individual donations, followed by schools in the Northeast and Midwest. Schools in the western region of the US received the lowest number of individual donations, getting only about half the number of individual donations as compared to schools in the South.
However, schools out west raise more money per gift on average than other regions. The average amount per individual donation, including all gifts, is around $13 million.
It’s tough to follow a number like that, but schools in the Northeast give the West a run for its money, averaging a little over $10 million per individual donation. What’s surprising is that even though schools in the South collectively raised over $1 billion in individual donations, their per-donation average sits at about $9 million. Midwestern schools garnered the lowest per-check average at around $8 million.
Across all regions in the US, major universities received approximately 90% of all major individual donations. State schools far outpaced all other schools, including Ivy Leagues, in landing those major gifts from individuals.
As we mentioned earlier, schools in the western region of the US are earning the biggest funding dollars per check, and no schools do it better than those located in the Golden State. Overall, major universities in California received over 85% of total individual gifts awarded to higher education institutions in that region. University of California campuses, including the powerhouses UC Davis, UCLA, UC Santa Barbara, UC San Diego and UC Berkley, were by far the primary recipients of individual gifts in California. Combined, the University of California campuses received over 40% of all recent individual gifts awarded to California schools. USC, Caltech, and Stanford are also major fundraising contenders in the state.
Coming in a not-so-distant second to California schools are New York- and Pennsylvania-based universities in the Northeast region of the U.S. New York universities received close to $300 million from individual donors, with Columbia, Cornell and the University of Rochester leading the pack. In Pennsylvania, major universities raised close to $200 million in individual gifts. Penn State landed the most $1 million-plus gifts, with Drexel University coming in a distant second.
Midwestern universities may not have sweet-talked quite as many individual donors into opening up their wallets, but they definitely held their own. With close to $225 million in individual donations, Ohio-based schools pulled in a lot of cash, with Ohio State pulling way ahead of other schools in the region. With the announcements this year of two mega donations to the University of Michigan, totalling $300 million, Michigan-based schools take the lead. The University of Michigan received the largest number of individual donations out of any school in the Midwest. Universities in Illinois and Indiana hovered around the $100 million mark in total individual donations.
Finally, in the southern region of the United States, it was North Carolina-based schools that received the largest amounts from individual donors, raising over $150 million. The number one school in the this region for garnering the most recent individual donations was Duke University.
Colleges don’t typically fare as well as major universities when it comes to getting support from individual donors, but they still receive some substantial gifts. Smaller colleges in the northeast fared better than those in other regions of the U.S.
Colleges located in the Northeast received around 25% of all individual donations given to higher ed institutions in the region. Though donors reached into their wallets to give these smaller schools over $230 million, Worcester Polytechnic was the only college to obtain more than one $1 million-plus gift. Predictably, the elite Swarthmore and Dartmouth colleges managed to land the largest single individual gifts of $50 million and $48 million, respectively.
Colleges located in the western region of the US received approximately 18% of total individual donations to higher ed institutions, with around $120 million in gifts. Claremont McKenna College was by far the runaway winner with $100 million from two $50 million donors.
Colleges located in the Midwestern region recieved around 10% of total individual donations to higher ed institutions in the region, with those gifts totaling over $60 million. Individual gifts were relatively evenly spread between schools in Minnesota, Missouri, Ohio, Indiana and Illinois.
Colleges located in the southern region of the US fared the worst, receiving less than 3% of all individual donations to higher education institutions in the region. Out of the over $1 billion raised from individual donors, only around $30 million went toward colleges.
What Are the Gifts for?
We've decided to provide regional information on gifts because these billions of dollars in individual donations tend to be region-specific, and the priorities of donors vary widely between regions. What follows is a breakdown of how these big gifts are being spent, by region.
In the South, over half of individual donations go toward specific program support. Here are a few quick examples:
- University of South Florida received a $25 million gift from Leslie and Pam Muma to endow the USF College of Business, which has been renamed the Muma College of Business.
- Florida International University received $20 million to support the school's international and public affairs program.
- Rice University received $50 million from John and Ann Doerr towards a new leadership institute called the Doerr Institute for New Leaders.
- University of Missouri-Columbia received a $1 million gift from Walter B. Potter Jr. to support the Walter B. Potter Fund for Innovation in Local Journalism.
Second on the South’s individual funding priority list are chair and faculty endowments. In one of the largest recent gifts, Ernest Scheller wrote a check to the Georgia Institute of Technology for $50 million to endow nine faculty chairs and six graduate fellowships.
Additional chair endowment examples:
- Southern Methodist University received $25 million from Annette and Harold Simmons to go toward various academic endowments at the school.
- Duke University received $10 million from Jeffrey and Penny Vinik to endow professorships in engineering.
- The University of Louisiana, Lafayette received $2.8 million from Frank Casing to endow a chair in mechanical engineering.
Rounding out the top three funding priorities for individual gifts to southern schools is new construction and renovations. New arts building construction topped the list, with support also going toward museums on campus. The remainder was pretty evenly split between health/med schools, science/STEM buildings and athletic facilities. A few recent examples:
- University of North Carolina received a $100 million gift from Fred Eshelman to create the Eshelman Institute for Innovation and provide faculty with new resources to engage in timely research and education.
- Rice University received $25 million from Robert A. Klein toward the construction of a new social sciences building.
- University of Missouri received a $10 million gift from Rex and Jeanne Sinquefield to help fund a proposed new School of Music building.
The remaining individual donations to southern schools went toward athletic programs, unrestricted donations and capital campaigns, in that order.
The top three individual funding priorities in this region are new construction and renovations, program support, and capital campaigns.
Around one-third of all individual donations we reviewed in the Northeast went toward the construction of new buildings or the renovation of existing buildings. Swarthmore recently received one of the largest individual donations for new construction with a $50 million gift from Eugene M. Lang toward the construction of a new STEM building. Dartmouth also received a substantial gift of $48 million, which will go toward the construction of a new visual arts center. Other substantial individual donations include:
- Sarah Lawrence College received $15 million from Barbara Walters to help construct the Barbara Walters Campus Center, which will include spaces for events, dining, and social activities.
- Rockefeller University received $100 million from Henry and Marie-Josee Kravis to create the Marie-Josée and Henry R. Kravis Research Building.
- Boston University received $18 million from Sumner Redstone to go toward rennovations of the university’s law school building as well as construction of the new Sumner Redstone Building.
Next on the list of priorities in the Northeast is program support. There doesn’t seem to be any one particular program that individual funders favor over any others. Rather, the gifts tend to go toward programs in which the donor has a personal or professional interest.
Recent large gifts include:
- Harvard received $40 million from Rita and Gustave Hauser toward the support of innovation in learning and teaching across all academic programs.
- NYU received $40 million from Lisa and Richard Baker toward the development of interdisciplinary research and curriculum development.
- Juliard received $20 million from Maurice Kanbar to support a graduate program in historical performance.
Rounding out the top three funding priorities in the Northeast are capital campaigns. The Northeast is the only region in which individual funders support capital campaigns in strong numbers. Recent examples include a $30 million gift to Harvard from Joseph and Kathy O’Donnell and a $35 million gift to Brown from Anne and Peter Tombros.
It should be mentioned that the Northeast is also a region in which donors like to give multi-million gifts for the naming of schools, such as Richard D’Amore’s and Alan and Jean McKim’s combined $60 million gift to Northeastern University to rename its business school the D’Amore-McKim School of Business. Other major Northeast funding areas in order of priority are scholarships, chair endowments, unrestricted donations and athletics.
For schools in the western region of the US, new construction topped individual funders’ list of priorities. Though there isn’t an overwhelming pattern of gifts made toward new construction efforts, health and athletic related gifts get quite a bit of attention. Recent major gifts include:
- Oregon Health and Science University received $125 million from Philip and Penelope Knight toward the construction of a new cardiac institute.
- Claremount McKenna College received $50 million from the George R. Roberts family toward the construction of a new athletics facility.
- Allen Hancock College received $10 million from Patricia Jean Boyd toward the construction of a new music center.
Next on the individual funder’s priority list for schools in the West are scholarships, which were not a top three priority for funders donating to schools in the Northeast or the South. Total dollars gifted for scholarships were only around half of that for new construction and renovation, but the gifts were rather significant. For example, David Geffen wrote a $100 million check to UCLA to support scholarships for medical students. Marion Anderson gave $100 million to UCLA's Anderson School of Management, $60 million of which will establish an endowment for financial aid, faculty stipends and research.
Rounding out the top three priorities for individual funders writing checks for schools in the West is program support. Large individual donations toward program support in this region are varied, with no one program receiving funding favor over another. Recent examples include:
- UC Santa Barbara received $50 million from Jeffrey and Judy Henley toward the support of the school’s engineering program.
- Santa Clara University received $25 million from Jeff and Karen Miller toward the Center for Science, Technology, and Society, renaming it the Miller Center for Social Entrepreneurship.
- USC received $25 million from Leonard Schaeffer to create the Schaeffer Center for Health Policy and Economics.
The remaining gifts awarded by individual donors to schools out west include athletics, chair endowments and unrestricted donations. Speaking of unrestricted donations, Ronald and Maxine Linde have a history of giving with few strings attached to Caltech, with a recent $50 million gift going towards an endowment at the school to fund "promising initiatives."
Scholarships were the top priority for individual donors in the Midwest, making it the only region in which the majority of individual gifts went toward scholarships. Recent large gifts include:
- Ohio State University received $114 million from Carmen and Mike Cutting toward the school’s general scholarship fund.
- The University of Michigan received $32.5 million from Effie Joan Behrens toward the school’s general scholarship fund.
- Missouri State University received $4 million from Quint and Rishy Studer toward the support of athletic scholarships.
Next on the list of giving priorities in this region is new construction. Though this area of giving is relatively wide, athletics programs, medical schools, and business schools seem to receive the most attention. Recent large gifts include:
- Northwestern University received a $92 million gift from Louis Simpson and his wife Kimberly Querrey to support a new 12-story research hub at Northwestern,
- University of Illinois at Urbana-Champaign recently received a $12 million gift from Sidney Lu to build a new innovation center within its Department of Mechanical Science and Engineering.
- Ohio State University received $13.5 million from R. David and Suzanne Hoover toward the construction of a new sports medicine building.
- University of Michigan received $100 million from real estate tycoon Stephen Ross for additions to the school's athletic campus.
Third down on the priority list for donors giving large donations to Midwestern schools is program support. Again, there was no significant pattern to the programs the donors supported and they seemed to write checks to the programs that interested them the most. A few examples:
- The University of Michigan received a second major gift from Stephen Ross, who donated $100 million toward program support for the Ross School of Business.
- Wayne State University received $25 million from James and Patricia Anderson towards the College of Engineering.
- Oakland University received $21 million from Lawrence and Isabel Barnett toward the support of the school’s STEM programs.
Other major gifts to Midwestern schools went toward chair endowments, capital campaigns, and athletics. Rarely, if ever, did individual donors make unrestricted gifts to schools in this region.
What Strings Are Attached?
The strings attached to the big money gifts are uniform across regions. Most donors either request or are given naming rights for buildings, programs or professorships they support with large gifts.
As far as how the gifts are awarded, medical-related and new construction gifts are usually doled out over time as opposed to a lump sum. There are a number of reasons why these donors like to spread their gift out over time, including changes in technologies or research methods and changes in expected construction times — both of which fluxuate from year to year.
How the Gifts Happen
Multi-million-dollar gifts tend to originate through joint concerted efforts between school presidents and deans. When fundraisers are going after athletic program dollars, the athletic director and coaches often get involved in the donor cultivation process as well. In every other area, college and university deans and presidents are the ones courting large donors, with individual university deans doing the heavy lifting. The donor cultivation process varies depending on a number of different factors and may take anywhere from a few months to a few years before a check is actually handed to the school.
Insights & Tips
The overwhelming majority of individual gifts to higher education institutions in the U.S. come from alumni or those who have familial or professional connections to the school. Perhaps their kids, parents or relatives attended the school, or often the donor is a school trustee or board member.
A growing trend is that donors aren’t giving as blindly as they may have previously. That is to say, cut-and-run check writing is no longer the norm. Individual donors want, and sometimes demand, to see the outcomes or results of their donations.
As expected, donors giving schools checks in the seven to nine digit range tend to have a strong voice in how that money is spent. It isn't unusual for donors to be looped into the new construction of a building or stadium. Personal involvement in such projects is on the rise.
Older alumni are by far the largest group of individual donors, and account for the highest donor-retention rates. Younger alumni do donate to higher education, but their giving levels are relatively small compared to older donors. Additionally, the retention among young alumni is lower than that of older alumni. This comes as no surprise as many of these young alums are still trying to figure out how they’re going to eat and make their student loan payments.
New donors are, on average, giving at higher levels. The schools that have had the most success with attracting new donors have implemented more aggressive ask strategies, such as those that are used during economic downturns. Schools have also found success with "second ask" programs.
Finally, not all universities are going after the big-fish donors. Some colleges are reaching out to parents of students for smaller gifts. Drexel University implemented such a plan and began aggressively reaching out to individuals that didn’t attend the school. The university ended up reaching its capital campaign goal of $400 million one year earlier than projected. The largest gift came from a local businessman who had hired a number of Drexel students over the years. Sure, landing that multi-million-dollar gift is great, but as Drexel has shown, smaller gifts can add up fast.