Posted on 3rd April 2008
A matched funding scheme has been launched by the Government to encourage high-net-worth individuals to make large donations to their former universities.
In an attempt to recreate 19th-century levels of educational philanthropy and civic engagement, John Denham, the Universities Secretary, told The Times newspaper that graduates who had built up great financial wealth in the City or in industry had a responsibility to give something back in order to help others.
The £200m matched-funding scheme, first announced in March 2007, will help universities to create endowments worth billions of pounds, and the money will be used to help students from deprived backgrounds.
“Successful people have a responsibility to enable other people to share similar opportunities,” Mr Denham told The Times. “I would like all graduates to give. But the real challenge is to attract the people who have done amazingly well and who have the ability to make significant donations and to put something back into society.”
From 1st August the Government will pledge to match donations, made in cash or in shares, over the next three years.
Three tiers –
- Top tier - Government to match pound-for-pound all qualifying donations made to the university, up to a limit expected to be about £100,000.
- 2nd tier - Universities opting for the second tier will receive £1 from the state for every £2 raised from donors, up to an expected maximum of about £2m
- 3rd tier - Will offer universities £1 for every £3 they raise, with a cap on government contributions expected at £5m.
The aim is that the scheme will help to raise £600m, with £200m coming from state coffers.
A Sutton Trust 2006 report called for a UK university matched-funding scheme. it compared the endowments received by UK and US universities, stating, ‘combined endowment of all UK universities is £7.8 billion, compared to Harvard's endowment of £13.4 billion and Yale's £8 billion. And the difference between the 10 largest university endowments in the UK and US has widened by some £12.5 billion in the last three years.’
