Staff who donate their home to university could win tax break

Academics who have devoted their lives to their universities could now be asked to donate their homes, writes Claire Sanders.

Reports that Tony Blair is keen to create a multimillion-pound endowment fund for universities and to bring in tax relief on donated homes, have been welcomed by university fundraisers who argue that donation of property might be particularly popular among childless academics.

Mike Smithson, development director at York University, who has headed fundraising teams at Oxford and Cambridge universities and the London School of Economics, said: "It is not uncommon for retired academics without offspring to want to donate their property. This could become more common if the academics could donate their home, continue to live in it and receive tax relief."

Mr Smithson added: "When I was at Leicester University a lab technician in the physics department left his house and £150,000 in savings to the university.

"He had been saying for years that he was going to do something big for his department, and many of the academics simply did not believe him."

The idea of tax breaks on donated property was raised in a government-backed report, Increasing Voluntary Giving to Higher Education , by Eric Thomas, vice-chancellor of Bristol University. It points out that "planned giving vehicles", are popular in the US. "Tax relief rules prevent donors from deriving an income from, or retaining an interest in, gifts or assets or property to charities," it says.

"With widespread ownership of assets among alumni coming up to retirement, and a historically low number of offspring among which to leave this wealth, the time is right to develop such schemes in the UK," it adds.

Professor Thomas, whose 2004 task force report on university endowments recommended that Government give pump-priming cash to help stimulate a culture of giving, said: "If a fund for this purpose were announced, it would be very good news. It would also be great news if the Treasury were to progress the idea of introducing planned giving vehicles."

Joanna Motion, vice-president for international operations at the Council for Advancement and Support of Education, said the Treasury had looked closely at the idea since the Thomas report. She added it was a "complex area and the key is to ensure that any reform is effective".

Universities UK said it welcomed the idea and that it was working closely with other charities to push for changes in tax law.

But some have voiced concerns. When the initiative was mooted in the Thomas report, Sir David Watson, professor of higher education management at the Institute of Education, warned about the dangers of US-style giving vehicles. "They raise the prospect of another 'mis-selling' crisis in the UK, which higher education would do well to steer clear of," he said.

The Thomas report also calls for match-funding for institutions investing in their development offices. It adds that this should eventually be extended to match-funding for donations. To date, the Government has put £7.5 million into a pump-priming scheme for development offices.

Sir Peter Lampl, chairman of the Sutton Trust, said that the trust's report on fundraising had recommended that academics do more to encourage alumni giving and that the Government provide matched funding of up to £5 million at each institution.

Sir Peter added that he welcomed Mr Blair's comments.

WOULD YOU DONATE TO YOUR UNIVERSITY?

"Yes, actually I intend to do this although whether to university or college is a question (Oxford is complicated ...)," said Susan Cooper, professor of physics at Oxford. "But I am unusual in that I have no family to leave it to."Matthew Taylor, chief executive of the Royal Society for the Encouragement of Arts, Manufactures and Commerce and former head of the number 10 policy unit, said: "I think it is generally speaking good to leave your wealth to good causes, but whether I would judge a university as a good cause is another matter."

Joanna Motion, vice-president for international operations at the Council for Advancement and Support of Education, said:"I would not donate my house to a university as I have children, but I do have two universities in my will."

"I am not quite of the age where I would want to be handing over my property, but when the time comes it is certainly something I would consider."

Peter Lampl, chairman of the Sutton Trust Paul Mackney, joint general secretary of the University and College Union, said:

"Universities should be funded from the publicpurse and not from charitable donations. I am against the introduction of benefactions and bursaries."