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Contributions to Higher Education Up 3.4% in 2004

March 11, 2005

Contributions to U.S. colleges and universities increased 3.4 percent in 2004, according to the annual Voluntary Support of Education survey released by the Council for Aid to Education at the RAND Corporation. After adjusting for inflation, the increase amounted to 0.7 percent.

Almost half of the $24.4 billion raised in 2004 came directly from individuals, representing a 9.7 percent increase from the previous year. While alumni giving—the traditional base of higher education giving—increased only 2 percent, gifts from individuals other than alumni shot up by 21.5 percent.

Given that alumni giving represents between a quarter to a third of all voluntary support and the spike in giving by nonalumni individuals, the current survey reinforces the importance of individual giving. Reflecting modest improvements in the capital markets, personal giving increased and corporate giving experienced a 3.5 percent increase.

Unlike alumni giving, foundation support--which typically accounted for an equally large percentage of voluntary support--declined by 6.1 percent. At 27.5 percent, alumni giving accounted for $6.7 billion, while foundation giving dropped to $6.2 billion (25.4 percent).

Experiencing a 5.4 percent increase, giving for current operations has enjoyed an annual increase for the past three decades. Capital gifts increased a slight 1 percent, reversing the declines experienced in 2002 and 2003.

Survey participants number 971 institutions, representing an estimated 85 percent of all voluntary support in higher education.