The Great Recession “Birth Dearth” signals a looming sharp decline in higher education enrollment. What does that mean for savvy higher ed donors?
College donors who aspire to long-term impact should know about this big change that is just over the horizon: A precipitous 15% drop in the number of students enrolled in 4-year colleges (and a 16% drop at 2-year colleges) in the second half of the 2020s.
Many readers may be wondering: Why would the number of college students decline, and so sharply?
It’s a consequence of the Great Recession’s “birth dearth”: U.S. fertility dropped precipitously after 2007 and remains well below pre-recession levels. By one estimate, there have been 5.7 million fewer births in the last decade than if the birth rate had remained at its pre-recession rate.
Fewer babies eventually means fewer college students. The Great Recession birth dearth will impact colleges beginning with the class entering in the fall of 2026. It will compound enrollment challenges already facing colleges and universities. (One survey found that, for the 2017–18 academic year, 52% of private colleges did not meet their enrollment goals, even after 30% revised their goal downward.)
So, what should savvy higher ed donors make of these enrollment trends?
The key is simple: Colleges and universities, now more than ever, must have a laser-like focus on their mission. This is true especially in New England, where the decline in the birth rate has been particularly sharp, and the region’s large number of colleges will compete for a dwindling number of prospective students.
Donors, many of whom are entrepreneurial leaders experienced in navigating market shifts, can be essential partners to schools by funding the creation of distinctive programs around a school’s core strengths. For example:
- Agnes Scott College reworked its curriculum in 2015 and rolled out its new SUMMIT Program, which includes leadership development, foreign language education, and study abroad, to prepare its alumnae “to be leaders in a global society.” Enrollment has risen steadily every year since.
- Furman University, on the strength of a 2016 $47 million gift from the Duke Endowment, announced the Furman Advantage, a program of mentoring in all four college years to prepare students for “lives of purpose and accelerated career and community impact.”
Other donors will want to help their alma mater recruit students by funding programs and extra-curricular experiences that are top priorities for today’s students, such as internships that bridge college learning and the workforce skills. Although internships are seen by students and employers as important, a Gallup-Purdue poll of college graduates found that only 40 percent had a job or internship that applied what they were learning during their college years. Many students simply cannot afford to accept unpaid internships, creating an opportunity for donors to fill the gap. Brooklyn College, Florida State University, and Whitman College are among the schools that offer donor-funded grants to students so they may accept unpaid internships. Connecticut College goes further, guaranteeing a funded internship to students who have completed their junior year. Gifts to internship programs like these are crucial. The University of Cincinnati has partnered with the Greater Cincinnati Foundation to fund internships for first-generation college students.
Donors should also know what gifts don’t make sense during these demographic shifts. For example, college presidents often ask their big donors to fund new campus construction. But as we enter a time when it may be hard to maintain enrollment numbers at even many well-ranked schools, donors should ask whether new buildings will truly be needed. But caution about campus expansion does not mean that there are not appealing alternative donor-funded construction investments. One idea: in an age when undergraduates conduct many of their social interactions on their phones, Duke University set out to encourage students to gather to socialize and study face-to-face with an innovative renovation of its Edens Quad dorm.
Another kind of fundraising campaign that won’t make sense going forward: cash-strapped colleges bailed out by alumni. It used to be nearly unthinkable that a well-regarded college would close; in 2007, the higher education community was stunned when Antioch College announced it would close (and it managed to stay open, with a modified mission, after a heroic alumni fundraising effort). But in the last few years, college closings and mergers have occurred at an increasing clip. This year, several colleges have announced that they will close, from Hiwassee College in Tennessee to the College of St. Joseph in Vermont. For now, we still see alumni rallying to attempt to save schools from closure. Going forward, alumni of distressed colleges are more likely to draw the sad conclusion that such colleges must be allowed to fold.
Huge demographic changes are coming very soon, creating not only the opportunity but the necessity for bold change and mission focus on campus. Donors will have a key role in supporting the leadership at colleges and universities that are far-sighted enough to seize this moment of opportunity.