A recent survey from the Council for Advancement and Support Education found that American colleges and universities raised a record $46.7 billion in fiscal 2018—a 7.2 percent increase over 2017. A litany of familiar drivers explains this historic windfall: alumni looking to elevate their alma mater’s national stature, funders stepping up in the face of shrinking state appropriations, increasingly sophisticated and “always-on” fundraising operations, and the longest bull market in history.
To see this higher ed fundraising boom play out in real time, let’s turn our attention to Texas. The University of Houston launched the public phase of its $1 billion “Here We Go” campaign in January of 2017. Last month, it blew past the goal 18 months ahead of its completion date. UH’s success comes as other public universities, including the University of Michigan, the University of Alabama, the University of Arizona and the University of Florida have either met or announced highly ambitious fundraising campaigns.
UH also enjoys the benefit of operating in a city that, having successfully diversified its economic base beyond its oil and gas roots, boasts the most robust “overall philanthropic culture” in the country.
The story begins in 2012, when UH launched the campaign’s “quiet” phase and subsequently raised $680 million—60 percent of the goal—from 130,000 donors over the next five years, including board of regents chairman Tilman Fertitta's $20 million donation in July 2016 toward athletics. This phase funded a new engineering building, a football stadium, 25 new endowed faculty professorships, and more than $100 million in new undergraduate scholarships.
“It’s an Ambitious Campaign”
UH launched its public phase in January of 2017. “Together with support of the Houston community, our business and industry partners, students, alumni and friends around the world, we have the momentum to meet and exceed our goals,” said UH president Renu Khator. “It’s an ambitious campaign, but when the University of Houston dreams, we always dream big.”
According to the Daily Cougar, Khator hoped the campaign would earn UH a spot among the nation’s top research institutions in the Association of American Universities (AAU). “If admitted,” wrote Jasmine Davis, “UH would be one step closer to rivaling the academic prestige of other top Texas universities such as the University of Texas at Austin, a frequent competitor for the university.”
Khator had reasons to be bullish. First, the school’s fundraisers didn’t have to worry about donor fatigue. UH’s last fundraising campaign ended way back in 1994, when it raised $358 million. Second, fundraisers could draw from a large and affluent donor pool. According to the university, more than 150,000 alumni stayed in Houston, generating a $5.3 billion-plus economic impact in the Greater Houston area each year.
What’s more—and this reason isn’t limited to UH’s efforts—many alumni were fortunate enough to attend college when it was a remotely affordable proposition. Now that they’re older and more financially secure, these alumni rightfully worry that students will be burdened with crushing debt. As a result, they’re particularly keen on funding scholarships.
Alumna Johanna Thomas, class of 1968, provides an instructive case study. Speaking with the Daily Cougar, she said, “You know most of us, we didn’t have all of the financial aid. We didn’t have all of these huge scholarships, other than if you were an athlete. All of us who did go to college, it was not extravagantly expensive.” Thomas, who recently passed away, was a loyal donor UH’s College of Education.
In a similar vein, if past fundraising windfalls are any indication, Khator’s goal of climbing the AAU’s rankings also resonated with donors. I called attention to this motivational strategy while looking at a recent gift to the University of Florida, which aims to bring the school “one step closer to being a top-five public research institution.” An uptick in a university’s ranking kills two birds with one stone. It provides a measurable metric of success while elevating the school’s prestige. If you’re an alumnus, what’s not to love?
Goal Met with Time to Spare
Last but not least, UH had the good fortune of operating in a city replete with loyal patrons and institutional funders.
Consider the John P. McGovern Foundation, which was endowed by a noted Houston allergist, investor and philanthropist who died in 2007 at the age of 85. In 2015, the foundation gave University of Texas Health Science Center at Houston $75 million to support medical training, scholarships and scientific discovery. Last year, the foundation gave $50 million to the Houston Zoo, the largest gift in the zoo's history.
The foundation gave UH a $20 million lead gift to coincide with the launch of the public campaign, and which funded the arts college, which was renamed to honor Kathrine G. McGovern, the foundation’s president and a former UH student. (For more evidence attesting to the regional philanthropy boom, consider this ancillary fact: The once-sleepy and relatively opaque John P. McGovern Foundation awarded three mega-gifts totaling $145 million in less than four years!)
A year later, UH announced that it had raised $120 million the first year of its public phase. “Needless to say, we are ahead of our goal,” Khator said at the fall address. “But fundamentally, our campaign has been a grassroots campaign. Eighty-five percent of the donors have given $1,000 or less.”
Fast-forward to February of 2019. UH announced it had reached its $1 billion goal 18 months ahead of the anticipated 2020 completion date. Almost 71 percent of donors were new contributors and roughly 35 percent were alumni. The campaign helped to create 1,032 new scholarships across the UH system. “Houston has embraced the University of Houston,” said Khator.
Other notable gifts included $15 million from Humana Inc. to establish the Humana Integrated Health System Sciences Institute, $3 million from an anonymous donor to pay off the entire tuition of the UH College of Medicine’s inaugural class, Houston businesswoman Marilyn Davies’ $10 million gift to the University of Houston-Downtown to prepare students for the workforce, and Andy and Andrea Diamond's $17 million gift to support students aging out of the foster care system.
In retrospect, UH’s feat seemed preordained, but there were challenges along the way. For example, despite Houston’s reputation as a boom town, UH had to navigate the city’s oil and gas downturn by connecting with energy donors early in the campaign when the sector was relatively more successful. In addition, fundraisers had to identify and reach out to alumni beyond the Greater Houston area. Khator visited New York, Los Angeles, Chicago, Dallas and Washington, D.C., once a year to meet with alumni and donors during the campaign’s “quiet” phase.
Stakeholders acknowledge there may be some tough times ahead given diminishing federal funding and a tight state budget. “It's hard to compete for a share of the shrinking pie,” said Jonathan Snow, president of the UH faculty senate.
And so, with $1 billion and change in hand, the school’s next order of business is, quite naturally, to raise more money. According to the university, its “Beyond the Billion” campaign will focus on creating scholarships, endowed professorships, and architectural, artistic and grounds improvements.