The Changing Landscape. in Higher Education B T F R I. J u l y 3 0, Bentz Whaley Flessner. Presented by Bruce Flessner BENTZ WHALEY FLESSNER

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1 Presented by Bruce Flessner B T F R I The Changing Landscape of Advancement in Higher Education J u l y 3 0, Bentz Whaley Flessner Copyright 203 Bentz Whaley Flessner

2 B i l l i o n D o l l a r C a m p a i g n s G l o b a l i z a t i o n N a t i o n a l i s m S i l i c o n V a l l e y T a l e n t M a n a g e m e n t N i n e - F i g u r e G i f t s D i g i t a l M e d i a F o u n d a t i o n s A l u m n i P a r t i c i p a t i o n D e m o g r a p h i c S h i f t s G e n e r a t i o n Z S a l e s f o r c e M e t r i c s D a t a D r i v e n P l a n n e d G i v i n g

3 The One Percent Keep Getting Richer T h e 8 w e a l t h i e s t i n d i v i d u a l s i n t h e w o r l d h a v e m o r e w e a l t h t h a n h a l f o f t h e w o r l d c o m b i n e d $ b i l l i o n. Bill Gates: $75B Amancio Ortega: $67B Warren Buffett: $60.8B Carlos Slim Helu: $50 Jeff Bezos: $45.2B Mark Zuckerberg: $44.6B Larry Ellison: $43.6B Michael Bloomberg: $40B Source: Oxfam

4 The number individuals in the world with at least $30M USD was 226,450 in 206, an increase in 3.5% from 205. Total net worth of $27 trillion Average individual net worth of over $20 million Range of Net Worth Individuals Assets B+ 2,397 $7,400 $500M $999M 3,803 $2,63 $250M $499M 8,980 $3,092 $00M $249M 33,650 $5,040 $50M $99M 69,00 $4,736 $30M $49M 08,60 $4,35 Total 226,450 $27,034 Source: Wealth-X UHNWI Analysis: The World Ultra Wealth Report 207.

5 Wealth is Increasingly Global Source: The World Ultra Wealth Report 207.

6 Billionaires by State

7 C h a n g i n g L a n d s c a p e o f We a l t h : B i g Te n Te r r i t o r y S t a t e W e a l t h 4. Illinois 6. New Jersey 7. Pennsylvania 8. Ohio. Maryland 3. Michigan 6. Minnesota 8. Wisconsin 20. Indiana 26. Iowa 34. Nebraska WalletHub analyzed the 50 states and the District of Columbia across three key metrics, including income, GDP per capita and tax dollars per capita. P e r C a p i t a W e a l t h. New Jersey 3. Maryland 7. Minnesota 8. Illinois 22. Nebraska 23 Pennsylvania 24. Iowa 27. Wisconsin 29. Ohio 24. Indiana 36. Michigan

8 US UHNW Individuals 3 6 % ( 8, ) o f t h e U H N W p o p u l a t i o n i s i n t h e U. S. a n d h o l d s 3 3 % ( $ 9, b i l l i o n ) o f UHNW w e a l t h.

9 Growth of U.S. High -Net-Worth Individuals Top 2 Cities Source: U.S. Wealth Report, 205

10 What does this mean to university development programs?

11 There have been at least 62 gifts over $00 million from 204 to present totaling $5.4 billion. Almost half of these gifts went to higher education. Number of $00M+ Gifts by Recipient 204 Present But less than 40 percent ($5.66B) of total dollars. Percentage Dollars Received by Recipient 204 Present Public Affairs () Human and Social Services (3) Other (2) Science (2) Arts (6) Public Affairs 3% Human and Social Services 3% Other % Science 4% Arts 9% Foundations (8) Higher Education (29) Health () Higher Education 37% Health 3% Foundations 30% Source: The Chronicle of Philanthropy

12 62 gifts of $00 million or more from 204 present totaling $5.4 billion. $5.487B $900M $225M $00M Total Gift Amount by Donor Home State $8M $650M $B $00M $.7B $350M $800M $.025B $300M Anonymous $00M $65M $.705B $00M International $8M Source: Chronicle of Philanthropy

13 62 gifts of $00 million or more from 204 present totaling $5.4 billion. Number of Gifts by Donor Home State Anonymous 4 International 3 Source: Chronicle of Philanthropy

14 The Attack on the Elite Universities

15 $2 Billion Plus Campaigns Harvard University: $6.5B University of Southern California: $6B+ University of Washington: $5B Johns Hopkins University: $5B Massachusetts Institute of Technology: $5B Northwestern University: $3.75B The University of Chicago: $5B University of Washington: $5B UCLA: $4.2B Duke University: $3.3B University of Wisconsin-Madison: $3.2B Brown University: $3B Indiana University: $2.5B The Ohio State University: $2.5B Washington University in Saint Louis: $2.2B Purdue University: $2.02B University of Oregon: $2B UC San Diego: $2B Texas A&M University: $4B University of Michigan: $4B

16 The Great Universities Raise the Most Money L e s s than p e r c e nt of institutions r e c e i v e d 2 7. p e r c ent o f a l l g i f t s to h i g h e r e d u c ation l a s t y e a r. Source: Giving USA 207

17 Worldwide Movement Against the Globalists and Liberal Democracy Brexit Election of President Trump Geert Wilders (The Netherlands), National Front (France), Alternative for Germany, Golden Dawn, Jobbik, Sweden Democrats, Freedom Party

18 Some Colleges Have More Students from the Top Percent Than the Bottom 60 Percent Source: New York Times

19 Big Ten Top % Bottom 60% Indiana University 3.% 3.2% Michigan State University 2.6% 24.% Penn State University 2.3% 29.5% Purdue University 3.% 2.% Ohio State University 2.0% 27.% Rutgers University.3% 30.7% University of Illinois 2.5% 29.5% University of Iowa 4.7% 7.5% University of Maryland.8% 30.8% University of Michigan 9.3% 6.5% University of Minnesota.9% 23.0% University of Nebraska.2% 29.2% University of Wisconsin.6% 27.3%

20 40 Percent of the Wealthiest Students Attend an Ivy or Elite College T y p e o f C o l l e g e A t t e n d a n c e B y P a r e n t s I n c o m e Source: New York Times

21 Average SAT Scores by Family Income Bracket The fierce competition between universities to build endowments makes doing such favors for alumni enticing. And there is a public-good argument for it: a student who comes with $M attached can pay for financial aid for many others. But in practice this is not how the system works. While it is true that some elite universities are rich enough to give out a lot of financial support, people who can pay the full whack are still at the center of the business model for many. The Economist, January 205 Source: College Board

22 Billion Dollar Endowments Congressman Reed 206 proposal: 25 percent of endowment income for student financial aid ($ billion and larger). Congressman Reed s new proposal is that gifts would not be fully deductible unless 25 percent of the gift went to student financial aid. Senator Grassley has been a critic of large endowments and favors requiring universities to spend a certain amount of their endowments each year.

23 Pew Research study shocks the academic community. The percentage of Rep/Lean Reps with a positive view decreased 8% from 205 to 207. The Dem/Lean Dem view increased a few percentage points from 205 to 207. Source: PEW Charitable Trust

24 Family Foundations and DAFs

25 Foundation Giving by Source $59.28 Billion 3% Community Foundations 0.9% Operating Foundations 27.4% Independent Foundations 48.7% Family Foundations Source: Giving USA 207

26 Steady Rise in the Number of U.S. Foundations 00,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 0,000 Number of Foundations Source: Foundation Center 206

27 25 Largest Foundations by State Source: National Philanthropic Trust

28 Permanent Charitable Capital Continues to Grow The number of individual donor-advised funds reached 270,000 last year, another year of double-digit growth. Record number of dollars given to DAFs, $22.6 billion, with total assets reaching $80 billion. Grants from donor-advised funds were $4.5 billion in 206. Permanent charitable capital is also increasing among family and community foundations. Sources: The Chronicle of Philanthropy, National Philanthropic Trust

29 Family foundations expect to receive additional assets in the next 4 years. 70% 60% Percentage of Family Foundations 50% 40% 30% 20% 0% 0% Pre or later Year of Founding Sources: Urban Institute and National Center for Family Institute, 205 Survey of Family Foundations.

30 Percentage of Family Foundations Expecting to Add Change in Board: new leaders, younger family members 60% 50% 40% 30% 20% 0% 0% pre and Later Founding Year New leadership Increase Younger family members Sources: Urban Institute and National Center for Family Institute, 205 Survey of Family Foundations.

31 Last year, for the first, time a DAF (Fidelity Charitable) was the top charity in the U.S. Sources: The Economist

32 Record payouts in 206 by two largest DAFs $3.5 billion in distributions $.5 billion in grants 5% From 205 4% From 205 Source: The NonProfit Times

33 The Ten Largest Community Foundations by Assets (205) (8) Oregon Community Foundation $,740,988,27 (5) Chicago Community Trust $2,290,734,37 (7) The Columbus Foundation $,826,938,80 (6) The Cleveland Foundation $2,85,366,489 (0) Marin Community Foundation $,62,345,26 () Silicon Valley Community Foundation $6,529,547,000 (3) The New York Community Trust $2,570,966,94 (9) Foundation for the Carolinas $,663,08,207 (2) Tulsa Community Foundation $4,05,87,000 Source: Foundation Center 207 (4) Greater Kansas City Community Foundation $2,40,067,229

34 Wealth Creation, Universities, and Donors Entrepreneurial economy produces wealth for some. Universities are under great scrutiny, including by our best donors. The new rich are creating foundations and other pools of permanent charitable capital :AMH/gmc,