Why you can’t afford to cut back on annual giving

Every year brings new pressures, but this year the stakes feel especially high. Budgets are tightening, and leaders across campus are being asked to make tough calls about where to invest and where to pull back. As you’re weighing those decisions, here’s one stat that’s hard to ignore: EAB research shows that for every $1 cut from advancement’s budget, institutions lose $8.25 in fundraising revenue.

At our Advancement Leaders Summit this spring, that stat got a lot of nods— it put real numbers behind what many of us already feel. We’re all trying to figure it out: What should we hold onto? What can wait? And how do we keep going when everything feels so uncertain? In this blog, I want to unpack what’s really happening in higher ed right now and why even in a tough year, annual giving is one of the smartest investments you can make.

What’s happening in advancement today

Lately, it feels like there’s a new curveball every week. Federal policy changes are threatening to reshape how we work from executive orders on DEI programs to proposed cuts in research funding and more scrutiny on how universities operate. But it’s more than just policy—it’s the bigger conversation. Higher ed is in the spotlight, caught in national debates, and that’s putting real pressure on advancement teams. Public trust in higher education is also shaky. Recent polls show confidence in colleges and universities is split almost evenly, with more people questioning cost, value, and even the role of higher ed in society. Donors, especially younger ones, are asking tougher questions. They want to see real impact. They want transparency. And they’re less likely to give just because they graduated from your institution.

Then there’s the budget crunch. With enrollment and tuition revenue uncertain, many institutions are facing serious financial pressure. Advancement leaders are in a tough spot, constantly needing to show the value of their work and to make the case for why their budgets shouldn’t be the first on the chopping block.

With everything going on, it’s no surprise that annual giving can seem like an easy place to make cuts. But quick fixes like that often lead to ripple effects that last far longer than a single budget cycle.

Why annual giving matters more than ever

When budgets tighten, annual giving is often one of the first areas leaders consider cutting. At first glance, that makes sense. Major gifts bring in bigger dollars, and annual giving can seem less urgent. But that view misses the bigger picture: annual giving is the foundation of long-term fundraising success. Here’s why it’s so important to protect:

• It brings in flexible dollars. Unlike endowments or capital gifts, annual giving is spendable, fast, and flexible. It supports scholarships, student services, academic programs, and whatever your institution needs most right now.

How an EAB Partnership Helped Grambling State Raise $720K in One Year

• It keeps your pipeline strong. Annual giving is often the first step in a donor’s giving journey. Whether someone has been connected to your institution for years or is engaging for the first time, a small gift is frequently how that relationship begins. If you slow down annual giving outreach, especially acquisition and stewardship, you might not feel the impact right away, but over time, your major gift pipeline will shrink and campaign momentum will suffer.
• It helps you tell your story. With public trust on shaky ground and national headlines dominating the conversation, annual giving gives you a platform to highlight real impact, elevate student voices, and remind donors why your work matters. It’s also a chance to showcase how your institution helps students build critical thinking skills and tackle big issues like social justice, healthcare, and more.

What to do next

I know a lot of teams are asking, “Where do we focus right now?” Here are a few things I’d recommend as you navigate this moment:

1. Focus on your current impact. There’s already meaningful work happening across your institution: student support programs, community partnerships, faculty research, and initiatives tackling big issues like social justice, cancer research, climate change, and public health. Use that. Frame your outreach around it. Donors want to know their gift matters, especially right now.

2. Be honest about the moment. Donors are paying attention to the headlines and the broader conversation around higher education. Acknowledge the complexity of the moment and share how your institution continues to support students and serve its mission. We should feel confident talking about how we’re preparing students to become future changemakers and leaders in a complex world. Annual giving can help rebuild trust and show donors how to join that mission.

3. Stay informed and connected. Things are changing fast, and keeping up with the latest trends is crucial. Stay plugged into industry newsletters, user group messages, and leading publications like EAB Briefing, The Chronicle of Higher Education, The Chronicle of Philanthropy, and reports from CASE, AASP, AFP, and the Lilly Family School of Philanthropy. Talk with peers, share ideas, and tap into partnerships that help you think through different scenarios. The more informed you are, the better equipped you’ll be to adapt and lead.

4. Prioritize digital channels. With things changing as quickly as they are, digital gives you the agility to respond in real time. You can reach donors faster, adapt your message on the fly, and do it all in a cost-effective way. Which all matters more than ever when budgets are tight.

Final thought

If there’s one thing to take away from all of this, it’s that annual giving is not where you should be cutting right now. These programs bring in flexible, immediate-use dollars that support urgent needs. But their value goes far beyond that. Annual giving helps build relationships early, identify engaged supporters, and strengthen those connections over time.

Right now, many institutions are seeing declines in donor counts and shrinking major gift pipelines. Strong annual giving efforts help you stay connected to a broad base of donors, build loyalty, and lay the groundwork for future major and planned giving. When done right, annual giving fuels the long game.

If you’re thinking through how to move forward over the next few months, we’re always happy to talk. Connect with me on Linkedin or email our team at [email protected].