Director of Communications
Feb. 16, 2006
Statement by John Lippincott, president, Council for Advancement and Support of Education
The results of the VSE survey on giving to education for fiscal year 2005, just released by the Council for Aid to Education, confirm that the long tradition of philanthropic support for educational institutions in America continues unabated.
The overall increase of 4.9 percent means that private giving to higher education outpaced inflation and contributed substantially to the enhancement of educational quality and opportunity in this country. It is a clear reminder of the importance of philanthropy in sustaining and strengthening our remarkable system of higher education in America and, in turn, of the importance of government policies that encourage such philanthropy.
At the same time, we must recognize that the $25.6 billion donated to colleges and universities account for less than 10 percent of total expenditures and, therefore, is not a substitute for other forms of support. Moreover, roughly 90 percent of private gifts are made for restricted purposes, such as scholarships, professorships, or building projects. As a result, these funds are generally not available to cover ongoing operating expenses. Instead, philanthropic contributions provide the margin of excellence for educational institutions, which continue to depend on state and federal support, as well as tuition, to finance day-to-day operations.
The increase in contributions recorded by the VSE reflects not only the decades-long upward trend in giving to higher education but also the strong correlation between the health of the economy and the growth in private donations. This is particularly true for individual giving, which accounts for nearly half of all contributions.
One particularly welcome area of growth was in alumni giving, which has traditionally been a pillar of support for educational institutions. Alumni giving grew by 6 percent in fiscal 2005, continuing a three-year rebound from a significant drop in fiscal 2002. While total giving from alumni increased, the percentage of "alumni of record" who gave dropped slightly. One possible explanation for this percentage decline is that the total number of "alumni of record" has continued to grow, both through new graduates and through better data collection by educational institutions.
Giving from foundations and other supporting organizations also increased strongly during fiscal year 2005, although corporate charitable support remained flat. It is worth noting that the figures for corporate support do not include funds awarded to educational institutions through contracts or clinical trial agreements.
Because participation in the VSE survey is voluntary and requires participating institutions to report their numbers based on the CASE Management and Reporting Standards, we are also pleased to note that participation in the VSE continued to grow in fiscal 2005 to a total of 1,005 colleges, universities, and independent schools.
(For more information about the VSE survey, which is conducted annually with sponsorship support from CASE, go to the Council for Aid to Education's Web site at www.cae.org.)