US alumni gifts hit by stock fall

US universities have registered a decline in financial contributions for the first time in 15 years because of the weak stock market.

Universities received just under $24 billion (£15.2 billion) in private gifts last year, a 1.2 per cent drop, while contributions from foundations remained stable.

"The declining stock market and weak economy are the two primary factors that contributed to the decline in contributions," said Ann E. Kaplan, a researcher at the Council for Aid to Education, which released the figures.

US universities receive donations from alumni, corporate sources and foundations for operations, new facilities and endowments. Alumni giving alone was down by nearly $1 billion, or 14 per cent. Contributions of stock, real estate and other such assets also declined.

The schools are having to rely less on financial gifts. Such contributions accounted for about 8 per cent of university spending last year, down from nearly 9 per cent two years earlier.

The news comes on top of cuts in government spending for higher education and lower endowment performance. US university endowments, which are typically invested in stocks, lost an average of 6 per cent last year, according to the National Association of College and University Business Officers.

"Unfortunately, this decline in giving comes at a time when higher education institutions are seeing an overall retrenchment from other income sources as well," Ms Kaplan said.

Income from alumni sources still outweighs that given by industry for research and development funding in the longer term, according to National Science Foundation research.

Industry increased its funding share from slightly below 3 per cent in 1970 to about 7 per cent in 1990, where it has remained since. Industry's contribution to US academia represented an estimated 1.3 per cent of all industry-funded research and development in 1998, compared with 0.8 per cent in 1980 and 0.6 per cent in 1970. However, this relative contribution has not grown since 1994.