Charitable giving to colleges and universities fell 5% in inflation-adjusted terms to US$58 billion in the 2023 academic year, according to the latest Voluntary Support of Education survey from the Council for Advancement and Support of Education, or CASE.

Giving had reached an all-time high of $59.5 billion in the prior 12-month period. Although the 2023 total marked the second-highest for any 12-month period ever, the decline fits into ebbing levels of philanthropy seen recently.

As a former fundraiser who now researches giving to colleges and universities, I see five key trends in the new data.

1. Higher ed remains a high priority

Educational causes have long been among the nation’s most popular for charitable donors, and the new data suggests that this has not changed.

Only churches and other religious institutions consistently receive more philanthropic dollars. In recent years, educational and social service-related nonprofits, such as food banks and homeless shelters, have attracted similar levels of support, according to the annual Giving USA report.

Giving USA, which tracks donations of all kinds, unlike the Council for Advancement and Support of Education, lumps giving to higher education, preschools, K-12 education and libraries into its education category, so it has consistently detected a higher amount of educational giving than CASE.

Among other differences, the Giving USA data covers calendar years, while the CASE survey runs from July 1 of one year through June 30 of the next. In 2022, Giving USA found that Americans made $70 billion in education-related donations.

2. More mega gifts

Donors provide more donations of $100 million or more related to education than any other cause, including religion, according to The Chronicle of Philanthropy’s annual ranking of America’s biggest donors. The CASE survey found that colleges and universities received 11 of these gifts in the 2023 academic year, four more than a year earlier. The total money given this way doubled from 2022 to $2.24 billion.

The share of higher ed giving from the biggest donors more than doubled to 3.9% from 1.8% a year earlier. CASE doesn’t name the sources of mega gifts or the schools that received them, but I believe the list may include a historic $500 million gift from the Simons Foundation donated to Stony Brook University.

Donors rarely make gifts that big. This one also stands out because it’s the largest donation ever to be completely unrestricted. Stony Brook, a New York state public university located on Long Island, may spend or invest the money for whatever purposes it believes make the most sense.

Most gifts of $100 million or more, in contrast, are designated for specific purposes, such as funding student financial aid, expanding academic programs, constructing or renovating buildings or growing research initiatives.

What’s more common in this case are the close ties between the donor and the school receiving the gift. The foundation was formed by Jim Simons, a former Stony Brook math professor, and his wife, Marilyn Simons, who earned a bachelor’s degree and doctorate there. Jim Simons later made a fortune as a hedge fund manager.

Other massive gifts that coincided with the 12 months covered by the latest CASE survey included $175 million for Columbia University, $100 million for the University of Chicago and $100 million for the University of Kentucky.

To be sure, not all donors to higher education make massive gifts. Roughly 43% of the donations are under $100, according to the CASE survey. But those gifts totaled less than 1% of the dollars overall.

3. No across-the-board decline

Despite the decline from the 2022 academic year, giving to higher ed remains $8.5 billion above levels seen in the 12 months ending in June 2020 – which coincided with the COVID-19 pandemic’s onset.

The decline in 2023 was driven primarily by a reduction in gifts slated to meet long-term needs, such as increasing the size of a university’s endowment or construction. Giving intended to support current needs remained more consistent.

The total amount donated grew for nearly half of the surveyed institutions. It was flat or fell at the rest, CASE found.

This survey also underscores how giving to higher education is unequally distributed: 20 schools, out of more than 750 for which detailed data is collected, accounted for more than one-quarter of the total money raised. That ratio has held steady for the past decade.

4. Organizations are giving more than individual donors

Personal donations, whether from alumni or people who didn’t attend a school they’re supporting, fell by more than 13% during the 12-month period when taking inflation into account. That giving totaled $20.5 billion – about one-third of the total donated.

Higher ed giving from foundations, corporations and other institutional donors was flat, rising by an inflation-adjusted 0.1% to $37.5 billion.

CASE attributed the decline in individual donations in the 2023 academic year to the stock market’s relatively weak performance.

Stock market indexes closed out 2022 at a low point, with the Dow Jones Industrial Average declining 9% for the year and other indexes plunging even more. Wealthy people typically give more to charity when the stock market is booming than when it sags.

5. Role of donor-advised funds is growing

Many of the gifts that the survey attributes to organizations are indirectly from individuals who have either established their own foundations or are giving through donor-advised funds – financial accounts often called DAFs.

Donor-advised funds are a way for people to set aside money for giving to charitable causes when they are ready to do so. According to sources like National Philanthropic Trust and Fidelity Charitable, the largest DAF grantmaker, these payouts have been increasing over time.

And research indicates that educational causes are the top recipients of giving through DAFs.

Looking ahead

Because this survey covered giving through June 2023, it doesn’t include the period of donor discontent after the Oct. 7, 2023, Hamas attack on Israel. Some donors, including several with previously strong ties to some of the nation’s most prominent universities, are objecting to policies regarding campus activism in solidarity with Palestinians and criticism of Israel’s bombing of the Gaza Strip. For example, billionaire hedge fund manager Kenneth C. Griffin, who gave Harvard University a $300 million gift, has said he will refrain from making new donations.

Donors are also continuing to make groundbreaking donations to higher education. These include two 2024 gifts: a $100 million gift to Spelman College announced in January 2024, from Ronda Stryker and her husband, William Johnston. It’s the largest ever for a historically Black college or university. Also, an anonymous donor made a $150 million gift to DePauw University, which was the largest donation on record for the small liberal arts college in Indiana.

The data also doesn’t reflect the impact of a more predictable trend: that the stock market ended the 2023 calendar year on an upswing. The Dow gained more than 13%, with other major indexes racking up even larger gains.

Ultimately, if trends of past support to higher education are any indication of what to expect in the future, giving to colleges and universities will probably hold steady or even increase.

Genevieve Shaker receives research funding from the TIAA Institute and the AFP Foundation for Philanthropy.