Giving to Colleges was Down in 2023

The Solution? Engage Your Alumni

         When giving makes the headlines in the mainstream media, it’s usually for one reason—megadonors like MacKenzie Scott offering transformative gifts to those nonprofits that align with their interests. But colleges and universities certainly understand the power of major donors. The evidence is quite plain to see when visiting a campus facility named after a prominent donor.

         Unfortunately, higher education nonprofits find themselves in a curious place these days. Very large gifts were up in 2023, but overall giving fell by 5% when inflation-adjusted. How is this possible? The problem can be found in disengaged alumni and small donors. The good news? Your alumni are ready and yes, willing, to be more engaged with their alma mater, and DonorSearch is ready to help you make it happen.

         For context, the latest giving information in higher education comes from the Voluntary Support of Education survey. It recently published findings for 2023. The survey, administered by the Council for Advancement and Support of Education (CASE) includes 757 institutions of higher learning located throughout the nation.

         As explained by The Chronicle of Philanthropy, an increase in gifts from megadonors giving $100 million or more is considered one of the survey’s bright spots. But a revealing fact is only 11 such gifts were recorded last year. With more than 700 colleges and universities in the survey, the chances of a particular institution receiving a gift of this size is exceedingly low. Another consideration concerning large donors is how politics can enter the fray.

         Returning to our wider discussion, if megadonors aren’t the pathway to financial support for most colleges and universities, where should they turn? The best path, in the opinion of both DonorSearch and many of our higher education clients, is to focus on alumni. Tellingly, alumni giving is exactly what has suffered the most—according to the CASE survey. Consulting the data, alumni contributions fell by 13%. Sue Cunningham, President/CEO of CASE, attributes part of this drop to stark economic conditions. She told the Chronicle “The stock market plays a key part in all of that.” But DonorSearch and our clients have found that it is more than a matter of economic conditions.

It is a question of engagement.

         In fact, a drop in alumni giving occurring at the same time as very large donations increase can be seen as an expression of the problem documented by DonorSearch Senior Vice President Nathan Chappell in the book he recently co-authored, The Generosity Crisis. Summarizing a chapter, Chappell explains, “The rise of megadonors and especially the attention paid to their massive gifts, causes regular donors to feel their giving no longer matters. They think to themselves, ‘Just what good will my $100 do for my alma mater when a megadonor might give $100 million?’ The way past this feeling is to build engagement within your community, starting by finding the most engaged alumni who you aren’t already in regular communication with.”

         To this point, colleges and universities partnering with DonorSearch quickly find our scoring system, driven by AI and machine learning, uncovers potential donors who have been overlooked over the years for a number of reasons, including understaffing and a overreliance on wealth screening.

          Bill Mitchell, Senior Associate Vice President of Research and Prospect Management at the Rutgers University Foundation, explains the immediate impact of DonorSearch AI data on his own organization: “It allowed us to take it a few steps further so that we were not just looking at individuals with the potential means and potential interest in partnering with us philanthropically, but it gave us insight into who then may be more motivated.”

         Mitchell further explains benefits of DonorSearch data to his organization, saying, “Now that we’ve been using DonorSearch AI for close to three years now, we’ve got a great track record of predictive results that the model has made that we can compare to actual behavioral results. And, simply put, when we compare the scores with what then happened over the subsequent twelve months of the score prediction—we find that it works. Individuals that scored very highly on the model, generally did end up making gifts to us.”

         Likewise, DonorSearch Executive Vice President and Co-Owner Sarah TeDesco explains, “Higher learning institutions focusing on engagement amongst their alumni population and even non-alumni who feel strongly about their school and its mission are successfully navigating both uncertain economic conditions and the drop in alumni giving seen nationally. It’s a matter of having powerful data in an actionable format that empowers your fundraising team to do its best work.”

         To learn just how your college or university can enjoy immediate results in finding the most engaged members of your alumni community, please contact DonorSearch for a demo today. And if you are an experienced non-profit professional interested in helping new nonprofits build for future success daily, consider a career with DonorSearch.