Diversity, STEM lead spike in higher ed giving

New data shows donations to higher education soared last year — but insiders say the bulk went to recruit diverse students for lucrative programs at wealthy schools while poorer colleges floundered.

Philanthropic giving spiked by 12.5% last fiscal year to reach $59.5 billion, the highest year-over-year increase since 2000, the Council for Advancement and Support of Education reported Wednesday. That followed a 7% annual increase in the fiscal year 2021 and a slight decrease the year before that when COVID-19 quarantines shuttered campuses.

“There’s no question that the diversity, equity and inclusion movement has had an impact on fundraising,” said Michael Warder, a California-based nonprofit consultant and former vice chancellor of Pepperdine University, commenting on the numbers.

According to CASE, 61% of charitable donations to higher education during the last fiscal year came from foundations, 22% from alumni and 16% from non-alumni.

Restricted gifts for research and scholarships accounted for nearly 80% of last year’s total, the association of higher education fundraisers found in its annual Voluntary Support of Education survey.

The survey did not say which schools received the lion’s share of donations. But academic insiders say several small colleges have closed during the pandemic while others rake in millions to recruit minorities into lucrative science, technology, engineering and math programs.

Three small liberal arts colleges with declining enrollments are closing their programs or campuses in the San Francisco Bay Area alone: Holy Names; Notre Dame de Namur, which is transitioning into an online graduate school; and Mills, which merged into Northeastern University.

“This may be an example of the rich getting richer while the poor get poorer,” said Thomas Plante, a psychology professor at neighboring Santa Clara University, commenting on the CASE survey.

Meanwhile, prestige schools — including the Ivy League, Stanford and MIT — and other top-ranked universities reported windfall gifts last year. Some big institutions, including Pennsylvania State University and Virginia Tech, broke previous fundraising records by more than $50 million.

And online programs that grew like wildfire during the COVID shutdowns have also prospered.

Western Governors University, a private online institution based in Utah, says it raised more than $13.3 million in scholarships last year.

“Donors invested in expanding access to higher ed opportunities for rural, first generation, underrepresented and underserved learners pursuing degrees in four in-demand industries: health care, technology, education, and business,” Annalisa Holcombe, WGU senior vice president for advancement, said in an email.

Private donations accounted for most of the scholarship gifts, she said.

“Scholarship donors are working with us to solve national equity and representation issues in higher education and create upward mobility in the United States,” Ms. Holcombe said. “Whether to improve diversity in technology for Black, Latina, or Native American women, strengthen health outcomes in nursing, or engage more rural learners across the country, scholarships are integral to the success of our students and our mission.”

While money to recruit more diverse students pours into STEM and health care programs, most liberal arts schools have seen precious little funding for subjects like English or philosophy.

“Large well-endowed research universities, flagship state universities and the highly selective liberal arts colleges are flourishing financially,” said Peter Wood, president of the conservative National Association of Scholars. “Every other kind of college and university is in trouble, some catastrophically so.”

The latest giving numbers signal the start of “a period of sustained decline among the legacy colleges and universities,” added Mr. Wood, a former associate provost at Boston University.
“We can expect that the largest share [of future donations] will be spent on diversity, equity and inclusion-related endeavors, including the appointment of more and more woke administrators and faculty, and race-based scholarships,” he said in an email.

Wealthy universities got richer because their financial investments grew with a bullish stock market in the second half of 2021, also part of the 2022 fiscal year, said Brian Otis, vice president of advancement at the University of New Haven. The private Connecticut school received large donations for artificial intelligence, population health, medical research and justice reform programs, he noted in an email.

“I attribute widespread fundraising growth directly to the stability of the stock market,” Mr. Otis said. “Scholarships for students with financial needs are very common as donors acknowledge the importance of college accessibility, especially for students from historically underrepresented groups, and the impact their investment can make on deserving students.”

Correction: An earlier version of this article incorrectly stated that Notre Dame de Namur has already closed its campus.