Blog: The Educated Reporter

Rich Colleges Getting Richer, Widening a Familiar Gap

As the nation continues to claw its way out of the shadow of the recession and public education struggles with slashed budgets at just about every level, one sector that’s more than holding its own is college fundraising, according to a thoughtful story from Justin Pope of the Associated Press.

A new report by Council for Aid to Education found that college fundraising was up 8 percent (to $30.3 billion) overall for the 2011 fiscal year.  Pope draws a provocative parallel to the Occupy Wall Street protests, noting that there is an ever-widening gap between the nation’s wealthiest higher education institutions and just about everybody else. When the universities are ranked by total fundraising, the top 25 percent drew in 86 percent of all private fundraising dollars, while the bottom 25 percent accounted for 1 percent, according to the AP story.

“Already-wealthy universities can afford more staff to raise funds, and they have a disproportionate share of wealthy alumni,” Pope reported. “But they’re also able to attract the most promising researchers, which helps them win the competition for dollars from philanthropists who want their money to have the best chance of creating knowledge.”

The top-20 list has many of the expected marquee names, with Stanford coming in first after closing out a record-setting five-year, $6.2 billion campaign. There are also some public universities in the upper echelon, including the University of California-Los Angeles, Indiana University, New York University, and the University of Wisconsin. (Click here for Inside Higher Ed’s chart showing the fundraising leaders.)

Having a good year in relation to donor generosity is not the same thing as having cash on hand. Many big-ticket donations come in the form of what are known as restricted gifts, meaning the money can only be used for a specific purpose such as remodeling the biology laboratories in the science building or endowing a professorship. Many colleges and universities can still be struggling to maintain the daily business of delivering higher education, even if alumni and friends were particularly generous last year.

At the same time, we’re seeing an intense federal-level focus on college affordability. President Obama singled out the issue in his State of the Union address, firing a warning shot across the bow of colleges and universities, warning that if tuition is not kept in check there could be repercussions including the loss of some federal aid. He followed up with a “Blueprint for College Affordability, ” including a proposal for specialized student loans that will depend on an institution’s willingness (and ability) to keep costs in line, and to demonstrate “value.”

The colleges and universities collecting the most in donor dollars are already among the most generous institutions when it comes to tuition assistance, said Scott Jaschik, editor of Inside Higher Ed. However, the majority of the nation’s higher education students attend schools that fall well outside the elite ranks of the uber-wealthy campuses with multi-billion dollar endowments, Jaschik said.

“There’s plenty of colleges where the scholarship fund isn’t an endowment, it’s literally how much money they were able to bring in that particular year,” Jaschik said. “However much they collect is how much they can give out.”

That the fundraising totals are up for 2011 is “a good thing, and cumulatively, it can help a college,” Jaschik said. “But will it make tuition smaller? Probably not.”



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