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Dartmouth and the Downturn

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Giving has dropped by a third, but annual fund goal remains $40 million

Charitable giving-which underwrites 40 percent of the cost of a Dartmouth education-has dropped dramatically as a result of the global recession.

Unrestricted gifts to the College through the Dartmouth College Fund were down $4.2 million from July 2008 through February 2009, with participation off 3.8 percent. Over the same period, the average total monthly donations to Dartmouth were down one-third, from $13.7 million to $9.3 million, echoing trends across the public sector.

givingGiving for capital gifts tends to follow the rise and fall of the market, as donors typically make large gifts from assets invested in the stock market. This chart shows the growth in capital gifts (such as endowments, buildings, and equipment) to U.S. colleges and universities in relation to the New York Stock Exchange Composite Index. (Source: 2007 Voluntary Support of Education annual summary of NATIONAL TRENDS, published by the Council for Advancement and Support of Education)

"We're emphasizing with our donors how charitable gifts to the Dartmouth College Fund directly affect our students, particularly the College's commitment to financial aid," says Carrie Pelzel, vice president for development. "It's difficult to predict what the annual fund will achieve this year, since a high percentage of the gifts come in during the last quarter. It's possible that participation will hold steady while giving levels could see a decline. Nevertheless, our alumni and parent volunteers and our professional team remain focused on our $40 million goal."

The drop in unrestricted annual giving is straining an already tight College operating budget that will be cut more than 10 percent over the next two years to make up for lost endowment revenue.

"Although the downturn affects us all, some of our donors who were more insulated from the decline in the markets have come forward," says Pelzel. "They are making larger gifts this year because they know their support is needed now more than ever. Other donors are putting their philanthropic plans on hold until there is more stability in the markets."

The severity of this recession appears to be upending at least one traditional pattern of philanthropy: that annual giving tends to remain flat or rise during economic downturns.

The unrestricted gifts-which provide Dartmouth and similar institutions flexible dollars in the current operating budget to help fund essentials like financial aid, academic innovation, and the out-of-classroom experience-are even more important in a recession because capital giving, for big-budget items like buildings and new programs, tends to drop.

Donors typically make capital gifts from assets invested in the stock market, while their annual gifts are often made out of annual income. Capital giving usually mirrors movements in the stock market (see chart above).

The Campaign for the Dartmouth Experience—the multiyear drive to support a range of priorities for the academic enterprise, financial aid, and residential and campus life—has raised $1.16 billion of its $1.3 billion goal. Total gifts are slightly above expectation for this stage of the campaign, thanks to better-than-projected donations through last fall.

"We're still confident we can meet our campaign goals by the end of December," Pelzel says. "But we're well aware of the financial environment, and sensitive to the circumstances of our alumni, parents, and friends. We know they're making tough choices about what causes they will support, and hope Dartmouth will be among them."

Questions or comments about this article? We welcome your feedback.

Last Updated: 1/14/10