College fundraisers brace for declines in 2020 and 2021

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Dive Brief:

  • Two in five college advancement officials expect philanthropic revenue to be down 10% or more for the current fiscal year, and even more say the same for the next fiscal year, according to a new survey from EAB.
  • The consulting firm polled 110 officials about pandemic’s impact on fundraising. Respondents were particularly concerned about a drop-off in gifts above $1 million.
  • The prospecting pipeline could also be stunted. Nearly one in five schools expects visits to drop by 30% or more this year. While they are hopeful they will increase in 2021, it may not happen soon enough to help that year’s revenue.

Dive Insight:

This isn’t the first indicator college fundraisers aren’t likely to meet their goals for the year. In a small survey of college advancement staff in April, more than 40% of respondents weren’t confident they would reach their benchmarks. Just 22% of respondents said they were confident they would do so this year. 

In a more recent survey by the American Council on Education, only 16% of presidents said they were concerned about their institution’s ability to fundraise right now. But nearly half were worried about the long-term financial viability of the institution.

Colleges have been looking to donors for help amid a decrease in state support since the last recession and concerns about the volatility of tuition revenue. While philanthropic revenue rose across higher ed in 2019, not all types of institutions fared the same, according to the latest annual data from the Council for Advancement and Support of Education’s (CASE) Voluntary Support of Education Survey.

Gifts to private bachelor’s institutions fell 5.4% for the year, according to CASE. Meanwhile, private research/doctoral institutions saw a 6.3% uptick, excluding the impact of a $1.8 billion gift to Johns Hopkins University.

About 41% of respondents to EAB’s survey expect their philanthropic revenues to be down 10% or more this year. And about half of that share are preparing for decreases of more than 20%. 

While a third of respondents are unsure how the pandemic will impact that income in 2021, already 44% expect a reduction of at least 10%.

A significant share of respondents expects decreases from 10% to 20% in gifts worth less than $1 million next year. A number of respondents said they were concerned about 20% to 30%, or greater, revenue declines among gifts over $1 million, EAB notes.

“This discrepancy stems from the fact that large gifts are inherently volatile,” Jeff Martin, senior director of EAB’s Advancement Forum, wrote in a blog post. “A single donor changing their mind about a big gift is enough to deal a crippling blow to overall fundraising production, especially as we come to rely on the top of the pyramid more.”

Colleges and universities have undertaken ambitious fundraising campaigns in recent years. EAB doesn’t expect schools will cancel those campaigns, though they may delay upcoming milestones. 

Three-quarters of institutions in the quiet phase of their campaign may change their public launch date, according to the survey. Around one in 10 have extended the closing date by a year or more.

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