The role of unrestricted dollars in higher education funding

• As federal funding declines, colleges increasingly rely on philanthropy, yet 94% of donations are restricted. Unrestricted gifts, which offer crucial flexibility, require long-term trust, strategic donor engagement, and a proven institutional impact.
• Donors who provide large unrestricted contributions typically have deep, long-standing relationships with the institution and are aligned with its vision. Success depends on demonstrating clear, outcome-driven goals and aligning appeals with areas of academic strength.
• Advancement professionals can encourage unrestricted giving by fostering transparency, facilitating leadership-donor interactions, and actively listening to donor priorities. These efforts build trust and showcase the tangible value of flexible philanthropic support.

As financial pressures mount and federal support declines, colleges and universities are turning to more innovative ways, like philanthropy-driven initiatives, to sustain operations and support institutional resilience. Yet 94% of donor gifts are restricted, meaning they must be used as the donor intended, not to fill unexpected budget gaps. Unrestricted gifts that can be used at the institution's discretion are rare and require deep trust, strategic engagement, and a clear demonstration of impact.

Today’s donors are more selective, often making larger gifts to fewer organizations where they can see tangible results. To thrive in this competitive landscape, institutions must rethink how they steward donor relationships and communicate value.

How can advancement professionals help academic and administrative leaders navigate unrestricted philanthropic giving?

Large unrestricted gifts are almost always the result of long-standing trust. Donors who give at this level typically have deep, decades-long ties to the institution and strong confidence in its leadership and direction.

These gifts aren’t spontaneous. They reflect a shared vision and clear understanding of their impact. Even when flexible in use, they succeed because donors are already committed to the institution’s mission.

Strategies like matching components, as seen in Stony Brook University’s $500 million gift, which, thanks to state matching, is expected to grow to $1 billion, also help build momentum. The bottom line: major support follows years of relationship-building and trust, not luck.

Advancement efforts are most effective when guided by a clear institutional vision and a strong sense of purpose. Donors want to see how their support will drive meaningful outcomes, not just support general needs. They are more likely to give when confident their contributions will fuel goals they care about.

Aligning philanthropic priorities with areas of academic strength, such as recruiting top research faculty, helps build that confidence. Generic appeals often fall short, but specific, outcome-driven cases for support can capture donor interest and inspire action.

Encouraging direct engagement between institutional leadership and donors is essential for building trust and strengthening philanthropic relationships. By facilitating leadership briefings and conducting donor insight surveys, institutions can gain valuable perspectives from their most dedicated supporters while helping donors understand how their contributions can have a meaningful impact.

These interactions bolster donor confidence and support the case for more unrestricted giving. While philanthropy cannot serve as a limitless source of unrestricted funds, fostering transparency and trust can inspire donors to provide the flexible support colleges and universities need to fulfill their missions.