Trends in education funding’s share of philanthropic giving 

One funding trend Candid’s Research team recently unearthed is that education funding’s share of philanthropic giving, especially from institutional grantmakers, is shrinking. Let’s take a look at what our latest report shows. 

Education remains a funding priority but with a shrinking share

Education has been a top priority for both institutional grantmakers and individual donors. Between 2015 and 2022, education nonprofits consistently received the largest percentage of total grant dollars from institutional grantmakers—an average of 27%—followed by health (21%) and public benefit organizations (19%). Among individual donors, education received the second largest share—an average of 19% over the eight-year period—following human services (33%).  

Yet the latest data shows that, although education remains the top priority for institutional grantmakers and a close second for individual donors, education organizations have been receiving a decreasing share of overall funding. In 2015, education organizations received nearly a third (32%) of all institutional grant dollars, but by 2022, their share had fallen to less than a quarter (24%). Among individual donors, the share of dollars directed to education also declined, from 20% to 19%. 

“Education nonprofits have to be creative in our approach to secure funding for programs as well as operational funding. To remain competitive, there are a number of strategies that education nonprofits should prioritize: closely aligning programs and strategies with funder priorities, determining the compelling stories that will engage funders, employ data-driven approaches, and develop measurable outcomes,” says Karmen Rouland, vice president of Mid-Atlantic Equity Consortium. “Another priority needs to be to diversify funding streams. Likewise, education nonprofits should think about partnerships with organizations in other sectors to align our work with larger funding trends.” 

Education funding growth lags behind other causes 

Institutional grant dollars to education have grown, but public benefit, health, and human service organizations have seen even greater increases in funding. 

“Individual donors often give based on personal experience, emotional connection, or immediate need. For example, causes such as food security, housing, and disaster relief offer a tangible sense of impact and the ability to see the direct benefits of their contribution,” says Rouland. “In contrast, health and education align with the broader strategic objectives of institutional grantmakers and their goal of creating long-term, systemic impact. These areas require substantial, sustained investment to drive measurable change, which institutional funders have the infrastructure to provide. Grantmakers are also influenced by research and data, which highlight education and health as key drivers of societal progress.” 

Larger grantmakers and donors are more likely to focus on education 

From 2015 to 2022, individual donors directed an average of one-third (33%) of their contributions to human services, prioritizing this area regardless of annual donation size. By contrast, institutional grantmakers of all sizes focused more heavily on education and health. Larger individual donors aligned more closely with institutional grantmakers, dedicating a greater share of their giving to education and health than smaller individual donors. 

“In the aftermath of the COVID-19 pandemic, other pressing issues have captured the public eye; funders have shifted their focus to addressing systemic issues such as racial justice, economic inequality, environmental issues, and health equity,” says Rouland. “These societal challenges often require immediate action and can see fast returns on investments. Even though there are many urgent needs in education—many of which intersect with those listed above—funding education takes patience, as educational outcomes take years to materialize.” 

Opportunities and challenges for education-focused grantmakers and nonprofits 

In reference to a recent Inside Philanthropy article, the Candid report (Dollars and Change) suggests that while education remains a priority, grantmaking has not kept up with the growth seen in other areas, supporting growing concerns about a slowdown in education philanthropy. Referring to recent reporting from the Southern Education Foundation, Dollars and Change also indicates that education organizations may need to consider ways to sustain support in addressing pandemic-related learning setbacks and persistent inequities, especially impacting Black, brown, and low-income students. 

“Nonprofits that support causes related to education may want to leverage the report data to have conversations with funders about the need for sustained education funding,” says Mantin Diomande, senior research analyst at Candid. “Also, to address their funding needs in education, small nonprofits may want to increase their fundraising effort among individual donors since only a few of them receive funding from individual donors.” 

Need for deeper analysis in education funding trends

As the report suggests, further research is essential to understanding the dynamics of institutional support for education, a broad category spanning preschools to higher education. Additional analysis can work to clarify which specific areas are seeing funding declines and why education is not keeping pace with other causes. Shifts like the decrease in education’s share of funding and pandemic-related fluctuations underscore the importance of this exploration. 

Diomande notes that further research and analysis should try to disaggregate the broad category of education and understand which specific areas in education caused the overall decline in education funding share. 

“The research should also focus on ways to increase the visibility of nonprofits that support causes related to education. There is also a need to understand how education funding is divided among nonprofits based on their size,” says Diomande.  “Do small, grassroot nonprofits have unique challenges in accessing funding? Or has the sector disinvestment mainly impacted large educational institutions? Who are the main funders of education? Is the decrease in education share caused by a shift in funding priorities for those large funders?” 

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