UK and German universities are now doing what the US and Australia are old hands at - tapping alumni for cash. But Italians still think it's all rather vulgar...
Gifts from alumni to UK universities have increased dramatically over the past ten years, according to development directors of old universities.
Simon Pennington, director of development at University College London, said: "The impression is that it has increased massively." Mike Smithson, director of the development office at Oxford, said alumni-giving had "rocketed".
Exact figures are hard to come by. But last year an informal group of ten vice-chancellors of old universities, known as the ad-hoc vice-chancellors'
development group, decided to find out how much their universities were raising from their alumni.
They collated figures from their ten universities for 1999-2000 and found that £3.5 million had been raised from alumni, £1.4 million of it in immediate gifts and the rest as long-term pledges.
It cost these universities 35p to raise every pound, but just 13p per pound for immediate gifts.
"Money raised from alumni is still a relatively small proportion of annual income," Mr Pennington said. "The real money comes from a few wealthy individuals, big companies or charitable trusts. But money from ordinary alumni is growing."
Telephone teams are driving this growth. "When we contact alumni by phone we have an 18-25 per cent response rate," Mr Pennington said. "This is significantly more efficient than mail shots that have a response rate of 1.5 per cent."
UCL recruits students to the telephone team, interviewing them to ensure they have the right skills and paying them £6.20 an hour. "We target alumni in their 40s, 50s and 60s - the people with most disposable income," he said.
He said the response of alumni was generally positive. "We have a few cases of people being very irritated but most are happy to talk." UCL also finds that men tend to give more than women.
Mr Smithson says that between 30 and 40 per cent of Oxford alumni respond to telephone calls. "This is very encouraging but we do need to be more like the Americans and get class years operating, so that we can say, for example, that the class of '68 beat the class of '65," he said.
Oxford has the added problem of colleges and the university competing for the same alumni. Even so, the university raised between £20 million and £30 million last year from alumni. A third of this came from America.
At Cambridge, 5 per cent of alumni now give on a yearly basis and telephone campaigns have again proved the most effective form of raising funds.
Since 2000 the tax regime has changed in the UK, bringing it more into line with the US and making it more tax efficient for alumni to give. There is still one crucial difference, however. In the UK if a standard-rate taxpayer gives £1 million to a university, the university claims back the tax. In the US, the donor does.
In last month's budget, the chancellor extended the income tax relief on gifts of shares to include gifts of land and property, with effect from April 6 this year.
This is important for universities because the very biggest gifts are almost always assets, not income.
If an alumnus gives shares, land or property worth £100,000, the alumnus receives income tax relief based on this in full, that is, £40,000 at the higher rate of tax. Donors must claim the tax relief themselves and pay the amount of tax deducted (in other words, the gift cannot give rise to a tax credit).
Nottingham Trent was one of the first new universities to take alumni-giving seriously. "Our alumni association was established in 1993," said Tim Cobb, development manager. "The office has contact with some 47,000 former students, most of whom graduated in the past ten years. At the beginning, we had no alumni donors and now we have approximately 650."
New universities faced particular problems, Mr Cobb said. "Most of the people on their databases are recent graduates and pre-1992 graduates are not always certain if they are included - they are!" he said. "And the logistics of keeping in touch with around 5,000 graduates each year should not be underestimated."
• Alumni have been a source of income for universities in the US for decades. Fundraising and networking for political advantage have been honed to a fine art - donations account for nearly 10 per cent of US university revenues. And the effort is not restricted to the Ivy League: public universities increasingly call on their alumni for political help.
Outside the US, universities in state systems have also seen the opportunity to plug gaps in government funding by turning to their former students, many of whom are likely to be financially better off as a result of their higher education.
The trick is to instil a feeling of affinity between universities and their former students - a task that runs counter to the prevailing culture in the UK and the rest of Europe.
It took universities outside the US some time to catch on to the potential. Positioned somewhere between the US and the UK, Australia, after a slow start, is now well down the road of developing an income-earning alumni network. As in the UK, it was universities with an international recruitment pattern that set the trend.
But the rest of western Europe is lagging far behind. US alumni experts have been shocked at the low level of awareness of the potential of alumni among university leaders in European higher education systems, where the alternatives to the state as a source of funding had never needed to be explored.
Now, at last, there are signs of change in the last bastions of resistance - with Germany, and even isolated examples in Italy, cautiously exploring the possibilities.