The ongoing higher ed fundraising boom is built on the proliferation of “mega-gifts”—those loosely defined as exceeding $10 million—flowing to ambitious fundraising campaigns from alumni seeking to secure their philanthropic legacy. News out of Indianapolis provides a textbook example of this phenomenon.
The Indiana University School of Art, Architecture + Design announced a $20 million gift from Indianapolis-based philanthropists Sidney and Lois Eskenazi. The gift will provide support for student scholarships, faculty development, academic programs, research initiatives and facility support for the school, which has been renamed the Sidney and Lois Eskenazi School of Art, Architecture + Design.
The Eskenazis are longtime donors to IU, starting in 1970, when Sidney established a scholarship fund. They have also supported the arts and art students by giving to the Herron School of Art and Design on the IUPUI campus, where Eskenazi Hall bears their name.
In 2011, the couple gave $40 million for a new hospital and medical campus in Indianapolis, now known as the Sidney and Louis Eskenazi Hospital and Eskenazi Health. In 2016, they gave the Indiana University Art Museum a $15 million gift earmarked for the renovation of its building, which opened in 1982. It was the largest cash gift in the museum’s history.
Sidney Eskenazi grew up in Indianapolis, and both he and Lois Eskenazi are IU graduates. Sidney established a successful real estate development company, Sandor Development Co., in 1963 and has built it into one of the nation's leaders, with 129 properties under management in 23 states.
The Eskenazis’ most recent gift will be included in the $3 billion campaign called For All: The Indiana University Bicentennial Campaign, which is scheduled to wrap up in June 2020.
IU’s original goal was $2.5 billion. However, in August of 2018, officials announced it had blown past that amount. The school raised $1 billion in private philanthropy and external research awards in fiscal year 2018 alone. The figures “reflect the longstanding generosity of tens of thousands of Indiana University alumni and friends based on the university's historic reputation for excellence over nearly two centuries,” said president Michael A. McRobbie.
Like many other schools, including the University of Houston and the University of Oregon, IU decided to keep the fundraising campaign machinery humming rather than close up shop, and its efforts come as other public schools, including the University of Michigan, the University of Alabama, the University of Arizona, the University of Virginia and the University of Florida have triumphed with eye-popping campaigns.
These successes are attributable to the usual suspects—a historic bull market run, the largest generational wealth transfer in history, and fundraisers’ ability to broaden the donor pool. For instance, in 2018, IU raised $347 million in gifts from 111,791 donors. But the Eskenazis’ gift also underscores another key ingredient of the higher ed fundraising boom—the proliferation of large donations flowing from the top of the “gift pyramid.”
Bigger Gifts—and More of Them
Last year, Marts and Lundy published a report examining the proliferation of “mega-gifts” in 2017. It found that the total value of gifts exceeding $10 million to universities was up 25 percent over the previous year. The increase, the report stated, “is due entirely to more gifts at the $50 million to $99 million and $100 million+ levels, which increased in number by 70 percent and in total value by 47 percent from 2016.” During the same period, “gifts in the $10 million to $24 million range declined both in number and total value.”
The authors attributed the “change in donor behavior” to tax reform, a strong stock market, and the sharp rise in donor-advised funds. Findings for 2018 may be a different story, as the S&P 500 and Dow Jones Industrial Average were down 6.2 percent and 5.6 percent, respectively, for that year. Then again, maybe not. 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.
The Marts and Lundy data underscores the truly staggering scale of the higher ed fundraising boom. Gifts like the Eskenazis’ $20 million commitment to IU, which falls within the defined parameters of a mega-gift, are giving way to even larger gifts (super-mega gifts?) This development also echoes familiar concerns about the undue influence of mega-donors at the expense of less shockingly affluent alumni.
Dollar amounts and labels notwithstanding, the underlying motivation behind the Eskenazis’ gift are familiar: A desire to give back and build out a philanthropic legacy, strengthen the liberal arts, and reinforce a regional university’s position on the national stage.
“Lois and I are extremely pleased to be making this legacy gift to Indiana University, the university where we both received our education,” Sidney said. We are very honored that the university chose to name the school for us, and we are very pleased to know that it will serve many generations of Indiana students. The opportunity to support the new school was overwhelming. Lois and I and our family decided it was something that needed to be done, and we are excited to help lead the development of the new school.”