What colleges and universities need from donors to thrive
Philanthropy, which covers an average of 10% of college and university budgets, can help schools and the students who attend them weather today’s tough times.
In 1638, John Harvard, an English-born Puritan minister, left 400 books and half his £779 estate to the college that would later be named after him. This donation laid the foundation for America’s oldest university, and initiated a long-standing tradition of philanthropy in U.S. colleges and universities. Today, philanthropy accounts for approximately 10% of college and university budgets.
However, this vital source of funding is facing challenges. In the past year, the Trump administration has targeted colleges and universities with research funding cuts, student financial aid caps, and new restrictions on international students. Furthermore, the 2025 tax-and-spending package raised taxes on some schools’ endowments, while a proposed rule would threaten private schools’ tax-exempt status if their programs use race-based criteria.
Demographic issues also pose a threat. Fewer students are choosing to attend college, and the number of high school graduates is declining due to a falling birthrate. Despite the surge in financial aid, students and their families continue to struggle to afford college. This has led to the closure of several institutions, including Martin University in Indiana, the first predominantly Black college in the U.S., and Sterling College in Vermont, known for its ecological focus. Since 2020, at least 40 colleges have been acquired by other schools.
Despite these challenges, philanthropy remains essential. In 2025, donors contributed $79 billion to colleges and universities, marking a 4% increase in constant dollars from the previous year. The majority of these funds, 89%, were contributed by just 2% of donors. High-profile gifts have also been made, such as Nike co-founder Phil and Penny Knight's $2 billion donation to Oregon Health & Science University for cancer research, and investor Ken Griffin's record-breaking $3 billion gift to Carnegie Mellon University for a new Miami campus.
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