Decline in Giving by Individuals Last Year Kept College Fundraising Flat

America’s colleges raised $41 billion in 2016, a scant 1.7 percent more than in 2015 and barely enough to surpass inflation, according to data released today.

Harvard University, which is in a campaign to raise $6.5 billion, topped the list, attracting $1.19 billion from private sources.

Colleges fared worse than nonprofits as a whole, which saw an increase in giving last year of 4 percent after inflation, according to “Giving USA.”

Behind the lackluster year was a sharp drop in gifts from alumni, which fell 8.5 percent. Such donations accounted for a quarter of all giving to colleges last year. Contributions from other individuals fell 6 percent.

Ann Kaplan, who directed the study of college giving for the Council for Aid to Education, said the fall in donations from individuals was largely the result of the weak stock market during the academic year (fundraising figures are counted from July 2015 through June 2016) and an unusually high rate of giving in fiscal 2015.

In 2015, philanthropists made eight higher-education donations worth at least $100 million each, totaling $1.44 billion. In 2016, colleges received only two gifts of that size. (While those tallies affected the academic year, The Chronicle’s new Philanthropy 50 suggests that giving by the wealthy to colleges is still very robust — and controversial.)

Top 20 Got the Most

As in past years, more than a quarter of all money raised went to 20 of the nation’s more than 5,000 colleges.

After losing the No. 1 fundraising spot to Stanford University in 2015, Harvard once again moved ahead, thanks in part to its seven-year capital campaign that has raised $7 billion since 2011.

From the campaign’s launch through the fall of 2016, Harvard received contributions from more than 133,000 donors, according a financial-overview statement written by the university’s treasurer and vice president for finance. Gifts for immediate use — as opposed to endowment gifts — have increased 46 percent, from $289 million before the campaign to $421 million. Gifts to the endowment and capital projects increased 130 percent.

Stanford University, the University of Southern California, the Johns Hopkins University, and the University of California at San Francisco filled out the rest of the top five slots. Donations to the top 20 universities decreased 2.1 percent from 2015 to 2016.

The weak stock market also hurt university endowments, which dropped by 4.4 percent.

But the market has been on the rise in recent months, and if that trend continues, the report predicts, donations to universities will increase in 2017. The possibility of tax-law changes this year could also persuade donors to race to lock in today’s tax breaks rather than wait for changes that could take effect in 2018. But uncertainty could also dampen giving.

Fewer Alumni

The sharp drop in the total donated by alumni gives university fundraisers additional worries, because many campuses have seen a slide in the share of alumni who give.

Figures for 2016 will be released later this year, but in the past five years, the share of alumni who give has dropped from 9.2 to 8.1 percent. That decline is a red flag because many institutions have found that once alumni are persuaded to give, they donate again and again.

What’s more, future major gifts often come from people who start giving relatively soon after they graduate, says Kestrel Linder, chief executive of GiveCampus, a company that makes digital fundraising tools for colleges.

“The connection you feel to your school only grows more tenuous with time,” he said. “That’s why the lackluster giving rates today among millennials is most concerning.”

Davidson College, a liberal-arts institution in North Carolina, has long done better than many others in attracting alumni donations. In 2015, it ranked third among colleges in the council’s study, with nearly 50 percent of alumni making gifts. Lisa Combs, director of annual giving at Davidson, credits that in part to the institution’s strong effort to recruit alumni to solicit donations from their classmates. These “ambassadors” use letters, phone calls, and posts to class-specific Facebook groups to ask their peers to give.

Davidson has also had success running large giving-day events and small campaigns for specific projects, such as raising money for its financial-need fund. On its most recent large giving day, it raised $763,269 from 2,727 donors, topping its goal of 2,500 donors.

Ms. Kaplan of the Council for Aid to Education thinks fundraisers should recognize that one reason the figures for alumni participation look bad is that most colleges are seeing big increases in the size of their pools of living alumni. In addition, she said, many alumni may give through donor-advised funds and other vehicles that aren’t counted in traditional tallies of alumni participation.

Among Raised From Different Sources, 2015-16

Importance of Grants

While most universities still get their biggest gifts from alumni and other individuals, foundation and corporate grants have become even more important sources of total donations.

Foundations provided 30 percent of all dollars colleges raised last year, and total grants increased 7.3 percent. Corporate giving accounted for 16 percent, and donations increased 14.8 percent.

The University of Washington has had significant recent success attracting money from Seattle technology titans. The university, which ranked No. 13 in 2015 and No. 9 in 2016, has pulled in $10 million from Amazon, $10 million from Microsoft, and $5 million from Zillow Group over the past two years for its new computer-science building. It was one of the most successful public universities in terms of fundraising last year, second only to the University of California at San Francisco.

The University of Washington’s success largely comes from the close connections its computer-science program has to some of the nation’s biggest high-tech companies, according to Ed Lazowska, professor of computer science and engineering.

“We play an important role in staffing one of the nation’s most vibrant computer industries here in Seattle,” he said. “A number of the companies and individuals who support us are people who have hired our students.”

It also helps to have Brad Smith, head of Microsoft, leading the fundraising campaign for the computer-science building and contributing what Mr. Lazowska calls “an astonishing amount of time and energy and personal influence.”

Those relationships don’t develop by accident. The university committed a lot of effort over the years to educate Seattle residents and companies about how its programs help create “a city where people want to live,” Mr. Lazowska said. He remembers an old slogan the university used to use: “You get something from it whether you go there or not.”

“We’re a quick bus ride or car ride from industries to whom we matter,” said Judy Mahoney, associate dean for advancement in the College of Engineering. “We work our butts off in improving all of those connections.”

The Council for Aid to Education survey, which has been conducted since 1957, collected fundraising information from 950 colleges and universities and uses those responses to show the state of giving at all colleges nationwide.

Universities That Raised the Most in 2016

1. Harvard University: $1.19 billion

2. Stanford University: $951.15 million

3. University of Southern California: $666.64 million

4. Johns Hopkins University: $657.29 million

5. University of California at San Francisco: $595.94 million

6. Cornell University: $588.26 million

7. Columbia University: $584.81 million

8. University of Pennsylvania: $542.85 million

9. University of Washington: $541.44 million

10. Yale University: $519.15 million

11. Duke University: $506.44 million

12. University of California at Los Angeles: $498.80 million

13. New York University: $461.15 million

14. University of Chicago: $443.30 million

15. University of Michigan: $433.78 million

16. Massachusetts Institute of Technology: $419.75 million

17. Northwestern University: $401.68 million

18. Ohio State University: $386.11 million

19. University of Notre Dame: $371.76 million

20. Indiana University: $360.94 million

Correction: An earlier version of this article said that Harvard had raised $7 billion so far in a five-year capital campaign that began in 2013. It has been corrected to say the university has raised that money since 2011 and that it’s a seven-year campaign.