Income gulf widens as philanthropy decline affects fundraising revenue

Demise of matched funding leaves majority of institutions worse off. David Matthews reports

April 11, 2013

Source: Kobal

Rare gift: average philanthropic income fell by more than half across the sector – the matched funding scheme ended too soon for some

Inequality among universities in terms of their fundraising incomes has grown hugely after the end of a matched funding scheme to boost philanthropy across the sector, a new report shows.

Even though more than two-thirds of 132 institutions saw their philanthropic income shrink during 2011-12, 10 Russell Group universities raised more than half a billion pounds between them, meaning the sector’s total haul went up.

But the median average income from philanthropy more than halved, from £1.052 million in 2010-11 to £453,000 in 2011-12, according to Giving to Excellence: Generating Philanthropic Support for UK Higher Education 2011- 12, a survey by the Council for Advancement and Support of Education and the Ross Group.

Forty-nine institutions saw their income fall by more than half, while another 26 suffered drops of between 20 and 50 per cent.

But overall, the sector’s income was up by about £2 million to £544.2 million, and the amount of new funds pledged grew by 14 per cent to a record £774 million.

Shirley Pearce, the former vice-chancellor of Loughborough University and chair of a review group that produced a report on UK fundraising in September 2012, said that there was “more of a variation in performance” between institutions, a gulf that could increase in the future.

“What we’re seeing here is a consequence of the end of the matched funding scheme,” she explained.

The £148 million scheme, run by the Higher Education Funding Council for England for three years from August 2008, matched donations to universities up to a certain cap to encourage donors and build up alumni relations offices.

According to Sam Davies, director of development and alumni at the University of Brighton, the scheme boosted the institution’s income but its demise “came too soon for us…we could have done with at least another year or so”.

The proportion of new funds secured by the Russell Group, excluding the universities of Oxford and Cambridge, grew from 26 per cent in 2009-10 to 38 per cent in 2011-12, the report highlights.

This huge growth came at the expense of institutions with no mission group, which saw their share shrink from 15 per cent to 10 per cent, and Oxbridge itself, which dropped from 53 to 46 per cent.

Although the Russell Group has grown by four during the past year, the report controls for this by asking current members for their income during previous years. The report also excludes Hefce income from the matched funding scheme.

However, analysing the figures by mission group is no longer helpful, said Tania Rawlinson, director of campaigns and alumni relations at the University of Bristol and a member of the Ross Group board.

The huge boost for the non-Oxbridge Russell Group was down to the increased success of just eight of its 24 members, she said, identified by the report as having “established” fundraising programmes, ranked one step below the “elite” operations of Oxbridge.

This “established” group, plus Oxbridge, “are getting better at what they do…the best institutions are getting very, very good at securing large gifts”, she said, and added that it was no longer just Oxbridge that could reel in a gift of more than £10 million.

It is unclear if this philanthropic inequality will become more entrenched or the majority of universities will eventually catch up with the established programmes and bring in tens of millions of pounds a year. Bristol vice-chancellor Eric Thomas, speaking as chair of CASE Europe, said: “Growth at the top is great news for the sector: [the] history of the…survey shows that where the best lead, others follow.”

Although for most institutions philanthropy is a welcome extra, rather than essential, form of income, there are signs it could become more critical as government teaching support is cut.

In a report released in February, Completing the Reform: Freeing the Universities, the Free Enterprise Group - a group of Conservative MPs - argues that a significant proportion of the grant awarded by Hefce should be given only if it is matched by philanthropic giving, effectively reintroducing a form of the scheme.

A spokeswoman for the Department for Business, Innovation and Skills said there were no plans to reintroduce the scheme.

david.matthews@tsleducation.com

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Reader's comments (2)

I would really hate any university to read this article and decide it isn't worth starting or continuing with professional development and alumni engagement activities. This is a very long term activity and takes belief, commitment, support and patience. By only highlighting a 'gulf' between institutions instead of focussing on the need to raise awareness about the importance of philanthropic support for universities, I think the article is looking at a glass half empty rather than a glass half full!
It's interesting that the most negative press coverage about the 2012 Ross CASE report has come from the THE. Of course it's right to point out that a significant number of institutions have raised less money in the most recent year. But let's set that in context: overall in the UK the charity sector has experienced a 15% decrease in donations - that the University sector has achieved a 14% increase in that time is good news, and even though some have suffered a significant decrease, this is most widely seen in programmes which are heavily dependent on a small number of big gifts to fill their overall totals. There's a misconception in the suggestion that the growth in some quarters has come at the expense of others. This is nonsense - there will only be rare cases where particular institutions are competing with others for the same pot of money. This is not a fixed-sum game. And then there's the question of language. The tone of this article is really offensive to donors, and I suspect to many fundraisers: it says "the sector’s total haul went up." This makes it sounds like bank robbery or at best a shooting party. And although it's a figure of speech it betrays an attitude still all too common in bits of the HE sector: that donors are there to have their funds liberated from them in a way which involves trickery, raids and rather embarrassing or improper behaviour. Instead fundraising is the business of matching the needs and aspirations of the university and the wider world with those who have the means and the power to make them happen. Big gifts come because deep relationships are forged between donors and institutional leaders who form a powerful partnership for good. And mass participation will come universities powerfully make the case that they are fundamental agents for changing the world for good. Personally, I am hugely grateful for research at UCL / UCH which has, over the years, produced a treatment regime for my sister's cancer which has arguably saved her life. This is why I am involved with University fundraising: it gets money to the causes of things and makes a difference.

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