Last month, the U.S. Department of Education announced the launch of an investigation into foreign gift reporting at several Ivy League institutions, extending the pool of institutions under the microscope.
As president and CEO of the Council for Advancement and Support of Education, which supports professionals working in 82 countries to advance education through the building and engagement of their global communities, I find that the tenor of this announcement illustrates a lack of understanding of the value and impact of philanthropy on our educational system. Colleges and universities around the world are becoming more focused and more professional when it comes to building philanthropic support and community engagement.
Philanthropy — in the United States, Canada, Australia, the United Kingdom and elsewhere — has become a vital element of higher education institutions’ funding mix. It provides for student financial aid, research, infrastructure projects and more. In all of these countries, reduced government funding and tuition revenues cannot cover the cost of providing a college experience and sustaining vital research endeavors. Philanthropy is a crucial element of education’s mission to transform lives and society.
CASE surveys in the United States and abroad demonstrate a trend of growing philanthropic engagement for education. Last month, we announced the results of the CASE Voluntary Support of Education Survey. More than $49.6 billion has been gifted to colleges in America — the highest amount of charitable giving to higher education ever recorded here.
Unlike other types of institutional revenue, philanthropy is not about quid pro quo. It is not a fee for service. Philanthropy (derived from the Greek “love of mankind”) is provided by individuals, foundations and corporations because they are committed to investing in education. Institutional leaders and their advancement and faculty colleagues are focused on building relations, over months and years, that result in immense generosity in supporting their college or university’s mission. A relatively recent and remarkable trend in the United States is seeing philanthropists from other countries invest in our educational institutions. I would argue that the generosity of those who are not even resident in this country yet who choose to support our great colleges and universities should be celebrated. Furthermore, it is worth noting that the contributions of those who are not American citizens will often generate no tax deduction for their philanthropic investment.
Recently, the U.S. Department of Education and Congress have voiced concerns about foreign influence on U.S. campuses. CASE understands the importance of appropriate levels of transparency relating to the philanthropy that colleges and universities are fortunate to receive from foreign governments, individuals and entities. CASE is also committed to safeguarding academic freedom. Our Global Policy Framework specifically states support for policies around the world that preserve institutional autonomy and academic freedom.
The next edition of the CASE Reporting Standards and Management Guidelines — to be published in October 2020 — reinforces our long commitment to clarity and ethical practice and professional guidelines for institutional advancement professionals. They underscore that philanthropic contributions must be aligned with the institution’s mission. The new edition will further clarify recommended institutional processes and provide clear guidance around issues of donor intent and influence — not only for advancement practitioners but also for administrative leaders, faculty and staff, so all are fully aware of recommended philanthropic best practice standards.
At a time when our educational institutions are more reliant than ever on philanthropic support, it is crucial that the U.S. Department of Education and Congress do not take actions that ultimately discourage anyone who wants to make a difference by making legitimate charitable gifts to educational institutions. According to OECD Education at a Glance 2019 data, the public share of education funding decreased in the United States by 3.14 percentage points between 2010 and 2016, while the private share of funding increased by the same amount. Comparatively, across the OECD countries, the public share of higher education funding decreased by 2.37 percentage points with an increase in the share of private funding of 2.54 percentage points.
That is why philanthropy remains vital to higher education in this country and around the world. As documented in the CASE Voluntary Support of Education survey findings, more than half (57.5 percent) of giving supported current operations, which means these gifts directly support research, academic units, student financial aid, athletics and other purposes. The remaining 42.5 percent was given for capital purposes: deferred gifts, gifts for property, buildings and equipment, and gifts to the endowment. Of gifts to endowments, more than 95 percent is restricted, with 37 percent designated for student financial aid and nearly 20 percent for academic purposes.
These gifts benefit our country and our students. They contribute to scholars’ ability to find answers to difficult challenges. They enable students to engage in co- and extracurricular activities related to their field of study. They support student financial aid. They encourage and inspire cross-cultural interaction and collaboration to solve the world’s problems. From COVID-19 to climate change, addressing these challenges requires the best minds working together, creating solutions and developing and sharing knowledge.
And to those people who believe that seeking philanthropic investment beyond our borders for education is a distinctly American activity, I say you are very wrong. Education is a global enterprise that has built connections and collaborations across oceans and borders. Having worked for U.K. universities and an Australian one, I can reassure you that philanthropic support is multidirectional worldwide.
CASE will continue to urge the Education Department and Congress to approach this issue with the goal of still encouraging foreign donors to give to U.S. colleges and universities. Creating barriers to philanthropy while decreasing public investment in education is not an equation that works. It’s bad math — and this country will be worse off if we follow that path.