(Almost) all donations gratefully received

Universities need clear protocols for accepting money - particularly from outside the UK, argues Chris Higgins

June 27, 2013

Source: Corbis

International fundraising and academic integrity are vital issues for all universities, yet the fevered nature of public discourse sometimes seems to suggest that there is a fundamental conflict between the two.

It could be appropriate to accept funds from the tobacco industry to support a student who otherwise could not afford to study - as long as this was not used as an opportunity to promote smoking

It is self-evident that our leading universities are now global enterprises, educating students from every continent and delivering research with benefits around the world. It is also a fact that global competitiveness requires global resources.

As one of the most established higher education sectors, the UK has some historic advantages, but at a time of dwindling government funding at home it is clear that there is no option but to increase income from foundations, governments, businesses and individuals worldwide if we are to continue to compete.

In the US, where a high proportion of the income of leading universities, whether public or private, is philanthropic or non-governmental, weighty endowments enable universities to invest in scholarships for the most able PhD students and undergraduates in a needs-blind fashion – something that we in the UK can only dream of.

In a few years, if we are not careful, significant numbers of the UK’s most able young people will go to the US to study on full scholarships, and the most talented early career staff will be tempted away by superior research opportunities.

Many philanthropists, foundations, businesses and governments around the world are ready and willing to support research and education in the UK. Yet there is still significant angst, which sporadically bursts into the public domain, surrounding philanthropic and, particularly, international funding for our universities.

Part of the reason for this is cultural. The British are generous, yet they rarely see universities as a natural home for charitable giving. Indeed, there is often an innate suspicion that any non-government funding might somehow undermine integrity and social responsibility.

This emanates from the erroneous view that our universities are state-funded, public-sector bodies. They are not. Although they receive some state funding, most UK universities are charitable institutions established by statute or Royal Charter, each autonomous and governed independently by their trustees.

As those working in the sector are well aware, a decreasing proportion of university funding comes directly from the state. With recent changes in government support, our leading universities will next year receive perhaps 5 per cent of their teaching funds and less than a quarter of their total income directly from government grants, with the rest coming from tuition fees paid by students, both UK and international, and literally hundreds of other sources.

Although it is anathema to some “purists” to mix academic activity and money, universities have no option but to act in a businesslike fashion and have an obligation (as do all charities) to raise money wherever possible to help them fulfil their objectives.

UK endowment recipients: the haves and have-nots

Cash income received in 2011-12 by HEIs

Philanthropic funding and endowment income is growing among members of the research-intensive Russell Group of universities.

There is a widening gap, however, between the sums raised by different universities in the UK.

According to the most recent Ross-CASE Survey, four higher education institutions received more than £20 million in cash income in 2011-12 while 33 received less than £100,000.

The University of Oxford and the University of Cambridge accounted for 45 per cent of all new funds secured during the same year.

Excluding Oxbridge, the Russell Group’s share of new funds rose from 26 per cent in 2009-10 to 38 per cent in 2011‑12.

Higher education institutions that were not formally part of any mission group saw their share of new philanthropic income fall from 15 per cent in 2009-10 to 10 per cent in 2011-12.

Times Higher Education reporters

Five largest endowments in the US and UK, 2012

There are, however, two fundamental questions that need to be considered when judging the appropriateness of any financial resources proffered, whether a philanthropic gift, research funding or money to support students through fee relief or bursaries. These questions apply irrespective of whether the funding emanates from a business, a government, a foundation or an individual. The first: is the proposed use of funding appropriate? The second: is the source of funding appropriate?

Woolf’s report concluded that the LSE’s relationship with Libya had involved failings of governance, management and communication, and it called for clearer ethical guidelines and policies

Most funding is not contentious. Nevertheless, a small number of potential sources of income can lead to disproportionate concern among individuals who respond passionately on one side or the other.

In such cases there are rarely absolutes, so individual judgements and risk assessments have to be made. The critical factor in making these decisions must be the demonstrable assurance of academic freedom and academic integrity.

The first question – is the proposed use of funding appropriate – is relatively easy to answer.

Universities have their statutory, charitable and strategic objectives in research and education, and any funding must underpin these objectives, directly or indirectly.

Nevertheless, there is a caveat. One of the reasons our universities are trusted and funded to research and educate is because they demonstrably maintain high standards of academic integrity and independence.

It is critical that no funding, however generous, undermines that integrity or our work will no longer be valued and resource will be diverted elsewhere. We must always be sure that the funding does not have strings attached that might influence the outcome of the research or the education that is being supported.

Naturally, most sponsors want something in return for their support: the answers to specific research questions, perhaps; improvements to the education of future cohorts of students; personal or corporate recognition; or simply the opportunity to show gratitude to their alma mater. When the UK government provides us with money, it frequently imposes as many restrictions on its use as any other sponsor.

However, the distinction is not always made between restrictions on the field of endeavour for which funding can be used and restrictions on a university’s independence to determine the outcomes within that predetermined field. Restrictions of the former sort are fine; those of latter are not. We as a sector need to be better at explaining this distinction.

It would, for example, be entirely appropriate to accept funds that restrict a supported student to studying modern languages rather than, say, physics; but it would be entirely inappropriate if the funder were able to influence the independent judgement of the university as to whether or not that student qualified for a degree. Similarly, most research funding (including that from the UK research councils) prescribes a defined area in which a project will be undertaken. But that does not undermine academic integrity as long as there is no opportunity for the funder to influence the outcomes of the work.

Laurel and Hardy on Christmas Day

At Durham University, for example, we recently received a £2.5 million endowment from a prominent individual from Kuwait to establish the Al-Sabah research programme and PhD scholarships that aim to improve understanding of the security of sovereign nations, in particular the smaller and more vulnerable states in the Middle East and beyond. There was controversy because the Kuwaiti democracy differs from ours, and some (who should have known better or established the facts) assumed that this meant that the outcome of the research or the students gaining an education would be biased by the source of funding. Nothing could be further from the case, and we were proud to receive this funding as it enabled us to undertake research and support the education of students that is much needed in this area of international relations.

With any funding, there needs to be a clear protocol that ensures that the sponsor (even if it is the UK government) cannot influence the independent assessment of academic performance or the published outcomes of a particular research programme – even if these outcomes are not necessarily in the funder’s interests. Our leading universities all have policies that ensure that this is the case, and these need to be enshrined in any funding agreement as well.

The question of whether or not the donor is appropriate can be harder to address.

Any gift must, of course, be derived from activities that are legal in the UK (although even this apparent absolute can become blurred for universities with campuses or activities in different jurisdictions).

Unfortunately, some individuals with a personal or political agenda believe that they have the right to impose their own values or political viewpoints on universities, branding funding they personally disapprove of as “unethical”. This could be anything from a research contract from a business whose products they do not like to a scholarship from a government whose political viewpoint they do not share.

There are some who, for example, consider major pharmaceutical companies “unethical”; they will argue that universities should not accept their money to test new drugs. But isn’t it better for society that universities undertake that research in a way that ensures independent and unbiased outcomes? Indeed, that is why pharmaceutical companies themselves want to fund the research in universities – so that the outcomes are independent of the company and, therefore, trusted. Similarly, as long as the assessment of a student’s abilities is independent, we should not discriminate against them – although some have suggested that we should – just because their government has a politics different from ours.

Why should Saif Gaddafi have been discriminated against as a student at the London School of Economics just because of his father’s activities, as long as his offer of a place and assessment were clearly independent of funding from the Libyan government? There is nothing wrong with an institution accepting a grant or a gift from a source of which some disapprove from their own personal or political perspective. What is critical is the level of certainty with which academic independence and integrity can be demonstrated when such funding is accepted.

It is, of course, also necessary to ensure that perceptions do not undermine that integrity. For example, universities are very unlikely to accept funding from the tobacco industry to support research into lung disease. Even if the research were to be carried out entirely properly, the public would not believe it and so the purpose of the research would be negated.

In contrast, it could be appropriate to accept funding from the same source to support, say, a student who otherwise could not afford entry to the university – as long as this was not used as an opportunity to promote smoking or unhealthy lifestyles among students. Indeed, here at Durham and at several other leading universities, funding from charities whose income originates with the tobacco industry has been used (in the absence of any overt publicity) to independently support deserving students who otherwise could not have obtained an education. This can only do good.

There are few absolutes – judgements have to be made on the specific issue at the time. In particular, thought has to be given to whether or not the funder can be suitably separated from the funded activities in a way that ensures that the educational and research outcomes are, and are perceived to be, fully independent.

Big money: Where large gifts go

Distribution of million-pound-plus donations, 2010‑11

SectorNo of million-pound donorsTotal value to this sector
Higher education57£405m
Arts and culture30£109m

Source: The Coutts Million Pound Donors Report 2012

It's a Wonderful Life

It is the absence of absolutes that makes this an area so ripe for challenge by those with personal or political axes to grind. Such challenges, whether internal or public, can be, and have been, a significant distraction, diverting universities from their missions – and they can also put off potential funders, who might fear similar treatment.

This was seen in spades in the media coverage of the LSE’s funding from Libyan sources, much of which focused on the source of the funding. Yet in reality it was not so much the source of money that was the problem but the fact that the LSE did not at the time have appropriate protocols to define who should make decisions and ensure academic integrity in a way that could be defended, as the Woolf inquiry into the LSE’s links with Libya and the lessons to be learned subsequently pointed out.

How, then, can universities best prevent such distractions while continuing to raise the money that is now so essential?

First, we must all have clear policies and protocols in place around educational and research integrity. This is a given, and something that the UK’s public funders such as the research councils, as well as major research charities such as the Wellcome Trust, also insist on.

Second, we must work to create and promote a climate in which international philanthropic funding of universities is the norm and flourishes, for both donor and recipient. As in the US, international support and gifts should be a normal part of university life.

Third, and perhaps most importantly, universities, their staff and students and, of course, external groups need to recognise that judgements have to be made by individuals or committees in balancing the risks and benefits of any source of funding.

Thus university governing bodies need clear and transparent policies that define which individual or panel will make decisions and judgements, and within what parameters.

Assuming that these policies are followed and that academic independence and integrity are assured, all decisions can be unambiguously defended, and even those challenged as ethically unsound by a vocal minority will not prove too disruptive or distracting.

It is incumbent on every one of us to promote and defend a pragmatic approach to funding our universities in a way that ensures continued autonomy, independence and academic integrity.

Doing so will ensure that UK universities continue to prosper and provide leadership to the world, as well as educational and research outcomes of which we can all be proud.

Cash and questions: controversial donations that put reputations at risk

The provenance of donations is a regular source of controversy for organisations accepting money from philanthropic sources.

For universities, recipients of some of the biggest donations in the UK, the most high-profile case in recent years culminated in the resignation of Sir Howard Davies as director of the London School of Economics in March 2011 as the institution was rocked by the fallout from its decision to accept a £1.5 million gift from the Gaddafi International Charity and Development Foundation.

The 2009 donation, the school’s extensive links with the regime and the circumstances surrounding the MSc and PhD awarded to Saif Gaddafi, son of the autocrat who ruled Libya at the time, attracted widespread media coverage in 2011, coinciding with the uprising in Libya.

The LSE commissioned the Woolf inquiry to examine the mistakes made. The Woolf report, published in November 2011, found that “Saif received a degree of assistance with his academic work far beyond that which would be available to most students”. In one example, Philipp Dorstewitz, then a PhD student, “was assigned to Saif as an informal student mentor, who ‘travel[led] with him while he jetted around Europe’ […] tutoring him in philosophy”.

The fact that the donation was agreed on the same day as the graduation ceremony at which Saif received his PhD was “unhappy” timing because “it could result in a misconception that the gift was a quid pro quo for the doctorate. It was especially risky because of […] rumours as to the authenticity of the PhD and that the ordinary rules on admissions had been bent for Saif.”

The gift followed a request by David Held, then co-director of the LSE’s Centre for Global Governance (and now master of University College, Durham), for a donation to his centre in 2008. After the controversy, the LSE decided that it was not appropriate for an individual, centre or department to request a donation on their own initiative without first consulting the institution’s development office.

Lord Woolf’s inquiry also found that the LSE’s council, which decided to accept the gift, was not given proper information about it. For example, the LSE failed to confirm the original source of the funding from the Gaddafi International Charity and Development Foundation and was therefore unable to disprove the “worrying [possibility] that the money was being paid to Saif by contractors for business favours”, Woolf said. It emerged that one of the supposed sponsors had a history of bribery but the LSE’s council was not made aware of this.

Woolf’s report concluded that the LSE’s relationship with Libya had involved failings of governance, management and communication, and it called for clearer ethical guidelines and policies at the school. An ethics code and proper structures of governance were needed to protect academic integrity against influence from the interests of private donors, it said, while a new ethics committee was required to deal with situations involving ethical or reputational issues.

Woolf cited a 2005 Institute of Business Ethics and Council for Industry and Higher Education report, Ethics Matters: Managing Ethical Issues in Higher Education, which suggested that universities did not have a consistent and institution-wide approach to ethical matters and policies despite the attention universities paid to research ethics. Ethics Matters argued that merely defining the mission and values of a university did not go far enough: “Statements of commitment mean little without policies and procedures to translate aims into action.”

The Woolf report observed that “British universities have had to embark on fundraising on the international plane on a scale which until relatively recently was unknown in this country”. Some universities, it said, including the LSE, were “now operating on a scale comparable to that of a global company” yet the LSE’s management lagged behind the standards of many multinationals.

The LSE accepted all Woolf’s recommendations.

While the circumstances of and the media storm surrounding the LSE case may be exceptional, universities regularly face criticism for accepting money from controversial sources.

As previously reported in Times Higher Education, a number of donations made to Durham University have attracted criticism.

One concerned the university’s decision to accept a gift of £125,000 from British American Tobacco in 2010, overruling the university’s ethics committee and amid concern from the university’s communications office that the gift would highlight the lack of “a clear and robust gift and donation policy from certain types of donors”.

The university accepted the donation, which was to fund scholarships for five Afghan women to undertake postgraduate study at Durham, on condition that the donor and the university would not publicise the gift.

However, the donation was reported by the university’s student newspaper in May 2011 and condemned by groups such as Cancer Research UK.

Durham said that it had followed due process and that the acceptance had been made “in compliance with the university council’s policies and processes”.

Durham approved a new gifts policy in January 2012, which stipulates that development staff must flag up donations from firms involved in “caution topics” such as “arms manufacture, tobacco, alcohol, gambling, (or) pornography” to the treasurer.

And, as outlined in Chris Higgins’ article, the university also faced criticism in September 2012 for accepting a £2.5 million donation from Sheikh Nasser Al‑Mohammad Al-Sabah, the prime minister of Kuwait, who resigned from government in 2011 following allegations of corruption.

Times Higher Education reporters

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