That pressure is not confined to one segment of higher education. It extends even to institutions once considered largely insulated from financial disruption. Deloitte reports that more than half of the private universities rated by S&P Global generated operating deficits in 2024. Its 2026 higher education trends report also points to reductions in state support, new constraints on graduate enrollment, and instability in research funding as further strains on institutional revenue models.

At a recent salon dinner held during the NACUBO Annual Meeting, The Chronicle of Higher Education writer David Jesse shared findings from the publication’s reporting on institutional finances. In a survey of approximately 300 college and university leaders responsible for budgets and finance, 40% said their institutions were facing either an imminent budget crisis or significant financial challenges.

Jesse characterized the current environment as more than another cyclical downturn. The leaders he interviewed repeatedly returned to two words: uncertainty and volatility. Institutions are navigating demographic changes, fluctuating government support, shifting policies affecting international enrollment, rising expenses, and significant questions about the future of college athletics, often simultaneously.

In this environment, presidents, trustees, and financial leaders are understandably looking for every available source of revenue. That often leads to an important question: What role can philanthropy play?

The answer begins with an equally important distinction. Philanthropy can help an institution invest in its future, but it cannot substitute for a sustainable financial strategy.

Philanthropy is significant, but its role must be kept in perspective. CASE reports that charitable giving represented 10.2% of colleges’ and universities’ educational and general expenditures in fiscal year 2024. That support matters enormously, but it is not large or flexible enough to compensate for structural weaknesses across an institution’s broader financial model.

Start with an honest conversation

Too often, advancement enters the conversation after institutional priorities have already been established and financial assumptions have already been made. Leaders determine what the institution needs, attach a fundraising expectation to the plan, and then ask the advancement team to secure the necessary support.

A stronger approach brings advancement and finance leaders together much earlier.

Before treating fundraising as part of the solution, institutions must have an honest conversation about what philanthropy can realistically support and what it cannot. Some financial challenges can be translated into compelling philanthropic opportunities. Others cannot.

If an institution is experiencing enrollment pressure, for example, philanthropy may support scholarships, emergency aid, student-success initiatives, or distinctive academic programs that make attendance possible and improve the student experience. Donors may be inspired by the opportunity to expand access or help more students complete their degrees.

They are far less likely to be inspired by an appeal to close an operating deficit without a credible strategy for addressing the underlying problem.

Fundraising should therefore be incorporated into financial and strategic planning, but it should not be treated as an unrestricted pool of revenue that can be assigned to any institutional need. CASE’s latest data show just how little philanthropic support functions as completely flexible revenue. Only 6.2% of the funds received by participating institutions in fiscal year 2025 supported unrestricted current operations; most giving was directed to restricted operations, endowments, facilities, and other defined purposes.

The earlier leaders understand that distinction, the more realistic and effective their plans will be.

The CFO and advancement leader must become strategic partners

The relationship between the chief financial officer and chief advancement officer has always mattered. Under current conditions, it is essential.

These leaders often approach institutional priorities from different, but complementary, perspectives. Advancement professionals are trained to recognize possibilities, understand donor interests, and articulate an institution’s aspirations. Financial officers must evaluate costs, risks, timing, and long-term obligations. They are responsible for ensuring that today’s opportunity does not become tomorrow’s unfunded commitment.

Neither perspective is sufficient on its own.

Advancement leaders need a meaningful understanding of the institution’s financial model. They should know how proposed gifts, pledges, endowments, and capital projects affect cash flow and ongoing expenses. A major gift may create extraordinary opportunity, but it can also introduce future costs for staffing, maintenance, technology, or programming. The gift amount alone does not determine whether an institution can responsibly proceed.

CFOs, in turn, benefit from understanding how philanthropy works. Donors have their own motivations, priorities, and timelines. A need that is urgent to the institution may not be compelling to prospective supporters. Philanthropic commitments also arrive in different forms and may be fulfilled over many years.

Strong CFO–advancement partnerships allow these considerations to be addressed before a proposal reaches a donor or a commitment is presented to the board. Neither leader should encounter a significant financial or fundraising proposal for the first time in a formal meeting.

This partnership is increasingly recognized as a core institutional practice. CASE has described strong collaboration among chief advancement, business, and financial officers as a hallmark of an institution-wide culture of philanthropy. Bringing these perspectives together can strengthen fundraising credibility, align institutional and philanthropic priorities, and demonstrate that the institution has considered not only what an initiative could achieve, but also what it will require.

When the relationship works, the institution speaks with one voice. Donors hear a compelling vision as well as a credible plan for delivering it.

Do not confuse urgency with inspiration

Financial pressure naturally changes how leaders communicate. There may be an impulse to emphasize the severity of the institution’s circumstances in the hope that urgency will motivate donors.

But distress is rarely the foundation of a transformational campaign.

Donors continue to respond to aspiration. Scholarships remain compelling. Endowed professorships remain compelling. Signature academic programs, meaningful research, and facilities connected to a clear institutional vision remain compelling.

A campaign centered on the message “We are struggling; please help” does not inspire the same confidence. It asks donors to absorb the institution’s financial anxiety without showing them what their investment can make possible.

This does not mean institutions should conceal their challenges. Transparency and optimism are not competing ideas. Donors appreciate honesty, particularly when it is accompanied by evidence that leaders understand the situation and are acting decisively.

An institution can say: We face real obstacles. Here is how we are addressing them. Here is where we are focusing our resources. Here is what we believe is possible. And here is how philanthropic support can help us achieve it.

That is very different from presenting a set of problems and expecting donors to resolve them.

Protect the institution’s priorities

Financially difficult periods can also change the balance of influence between institutions and major donors. A donor may have a worthy idea and the resources to support it. The institution, eager for new investment, may feel pressure to pursue that idea even when it does not fully align with its priorities or financial capacity.

This is another reason for involving both financial and advancement leaders in consequential donor conversations.

Together, they can assess not only the size of a proposed gift but also its structure, timing, restrictions, and long-term implications. They can help donors understand what is possible, identify adjustments where necessary, and protect the institution from accepting support that creates unsustainable obligations.

That discipline is part of responsible stewardship. The National Council of Nonprofits notes that honoring donor restrictions is both an ethical responsibility and a legal or fiduciary obligation. It also advises that, in some circumstances, declining a gift with unsuitable restrictions may be the wiser course.

The most constructive donors appreciate this candor. They want their philanthropy to succeed. Responsible stewardship means ensuring that the institution can deliver what it promises and sustain the impact of the gift over time.

Advancement leadership now requires more than fundraising expertise

This work also places new demands on advancement leaders themselves.

Many people rise through the advancement profession because they are exceptional fundraisers. They know how to establish relationships, understand donor motivations, and cultivate significant gifts. When they assume responsibility for an entire advancement operation, however, they encounter a much broader leadership challenge.

Today’s advancement leaders must be strategic partners to presidents, CFOs, and boards. They must lead teams, manage complex operations, interpret institutional finances, connect donor interests with organizational priorities, and make sound judgments about opportunities that may have consequences for decades.

Fundraising ability remains important, but it is no longer enough on its own. Strategic thinking, empathy, operational discipline, and the ability to work across institutional functions are equally critical.

Fund the future, not the absence of a plan

Colleges and universities cannot fundraise their way around every difficult decision. Philanthropy cannot make an unsustainable model sustainable, and advancement teams should not be asked to compensate for a lack of financial or strategic clarity.

What philanthropy can do is help an institution translate clarity into possibility.

When leaders understand who they are, make disciplined choices about where to invest, and align finance and advancement around shared priorities, donors can see more than an institution under pressure. They can see an institution responding to change with purpose and confidence.

That is the opportunity philanthropy is uniquely positioned to support. Not the avoidance of hard choices, but the ability to act on them and build toward a future worthy of investment.

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