Charitable Giving in the US: Contributions to the Education Sector Continue to Rise

In 2014, the education sector received the second-largest amount of charitable giving out of all nonprofit sectors – reaching a total of $54.62 billion, according to Giving USA 2015: The Annual Report on Philanthropy. Contributions to the education sector comprised of 15 percent of total giving in 2014. The report shows that Americans donated an estimated $358.38 billion in total, which is the highest level in the report's 60-year history. When assessing charitable giving to the education sector in particular, the data shows a steady growth in charitable contributions. Between the years of 2013 and 2014, giving to education increased by 4.9 percent. Below are some more key findings and recommendations that are intended to help organizations in education effectively prepare for their future in fundraising.

Key Findings
  • Charitable contributions to organizations in education increased by 4.9 percent in current dollars from 2013, which came to a total of $54.62 billion.

Giving-USA-Recipient-Type-Education

  • In 2014, charitable giving to organizations in education totaled the highest inflation- adjusted value recorded to date.

  • When breaking down the contributions, results indicated strength among large gifts, many of which particularly supported capital campaigns in higher education and medical research initiatives. Included in these large donations are multi-million dollar gifts, two of which were more than $100 million.

Key Recommendations

  • Build a Continuum of Engagement. A primary motivation for donors to give to education is their gratitude for the institution’s role in providing a life-changing experience. Because individuals are constituents before they become donors, educational institutions need to find creative, meaningful, and fun ways to engage alumni, alumni families, and friends in the life of the institution. The continuum of engagement begins at the student level. So, it’s important to create a culture of engagement and philanthropy that starts with current students. Lifelong bonds are cultivated through the communities, identities, and traditions that are developed throughout a student’s experience.  During this time, institutions should educate students on the value of the institution and continue to strengthen this knowledge throughout the course of their experience.

  • Build a strong annual giving program. Creating and implementing effective strategies that focus on annual giving programs is instrumental to the success of an organization's fundraising initiatives. Don’t hesitate to set big goals, and to create big visions. Donors are more likely to donate larger gifts to institutions that they feel a personal sense of connection with. For this reason, it is essential to understand your current and potential donors; the reasons why some individuals give and others do not. When developing annual giving strategies, it is important to conduct research that shows how donors connect with the institution and how they prefer to be engaged. As a result, you will be able to more effectively communicate the organization’s value and communicate the impact of your donors’ gifts – one that is personal and customized to your donor. Be strategic about how you’re engaging each donor group. Institutions should focus on engaging young alumni as well as developing meaningful relationships with parents - two donor groups that require different engagement methods.

  • Commit more resources to your major and planned giving program. As this year’s Giving USA data shows, giving is driven by individuals. With the rebound of the stock market, we are seeing that individual donors are giving to schools and universities at increasingly higher levels. Additionally, as the oldest Baby Boomers begin to turn 69 this year, the enormous transfer of wealth is in full force. Educational institutions need to focus on building robust major and planned giving programs that include long-term relationship development. Individual giving to education is bolstered by individuals’ deep connection to educational institutions. As a result, there is an opportunity to nurture these relationships. Strong relationships and interpersonal connectedness lead to large gifts, as well as potential charitable bequests.

  • Think big! Strategic planning for educational institutions should include visionary and aspirational goals that can capture the imagination of donors.  Many large gifts were made to educational institutions in the past year.  However, it isn't solely attributed to the creation of wealth we've seen in the past three years. These large gifts are the result of donors seeing and understanding how their philanthropy can have far-reaching societal impact through education.

Questions? Please contact Bruce Matthews. We are happy to further discuss Giving USA 2015 overall and sector specific recommendations with you.