New survey shows university cash donations rise by more than 18% to record levels despite recession

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

A £5m donation to Oxford University by Hong Kong based Chinese billionaire businessman Sir Ka-shing Li, K.B.E. illustrates the main finding of the latest edition of the annual Ross-CASE survey, which shows big advances in the philanthropic funding of UK universities. Cash donations to UK universities have risen 18.8% in the past year, exceeding an annual total of £0.5 bn for the first time, despite the recession.

Universities also saw a rise in the numbers of major cash gifts worth £500,000 or more – 165 in total up from 119 two years ago. This includes 22 institutions that received a cash donation of £1m or more, and four that received gifts of over £4m each.

Universities received £511m in philanthropic cash income in 2008/09, up from £430m the previous year.

The Ross Group editorial board, commenting on the findings, says cash income received is “generally the most consistent and reliable indicator of fundraising success especially in terms of comparisons between institutions as in this report and longer term financial impact.

“Fundraising is one of the few increasing income streams available to Higher Education Institutions, and the growing consistency and robustness of this income source is to be welcomed.”

The report notes the positive impact of the last government’s £200m ‘Matched Funding’ scheme for English universities, which proposed in a 2004 report, ‘Increasing Voluntary Giving to Higher Education’ by a task force under the chairmanship of Professor Eric Thomas, Vice Chancellor of the University of Bristol, to advise government on how to increase and sustain giving to higher education. The matched funding scheme was eventually introduced in 2008, as reported in Philanthropy UK, and appears to have encouraged donors to give money, especially to the institutions they attended, with 80% of donations coming from the alumni community. A total of 163,547 people gave to universities in 2008/09, a 12% increase on 2007/08 and a rise of 24% on 2006/07.

“Rising alumni participation in the UK may be a positive effect of the matched funding scheme. We are also pleased to note that the median cost per pound received fell back to £0.27, having risen with the increased investment in the previous year. This suggests that it has been possible to generate additional income from additional investment,” says the Ross Editorial board.

Despite the rise in cash donations, the survey reports that universities have seen a drop in total charitable donations, defined as the sum of all pledges, future commitments, new cash gifts and gifts in kind.

In total, UK universities received £532m in new philanthropic funds in 2008/09, down £143m from £675m in 2007/08 – though the report says 2007/08 was an abnormal year attracting an unusually high number and value of exceptional gifts. It suggests the drop in total charitable donations may also reflect the economic climate during the recession.

The board reports that philanthropy is becoming increasingly significant to the Higher Education sector, providing funds equal to about 2.3% of total institutional expenditure. However it says it is important to note that not all funds affect the income and expenditure account, with significant amounts reflected instead in the balance sheet as capital assets or endowments.

Distribution remains highly skewed: 51% of cash income is received by Oxford and Cambridge, and a further 24% by the remaining members of the Russell Group, which is a group of 21 self-defined ‘elite’ universities.

Sir Ka-shing Li’s £5m donation to Oxford University, reported earlier this month, adds to the £800m already donated to the Oxford Thinking campaign, taking it closer to its goal of £1.25bn.

Previous reports of the findings of the Ross–CASE surveys had shown that the higher education sector had been securing steady growth in philanthropic funds in recent years, across a broad range of measures. This newly published survey reports on a period covering the worst four quarters of the deepest recession in the UK since the Second World War and is the first look at the full effects of the recession on the higher and further education sector’s ability to raise philanthropic funds.

The Ross–CASE Survey for 2008-9 is a significant analysis of both the current status and the on-going progress of Development (fundraising) and Alumni Relations in UK Higher Education. It provides detailed analysis, of interest to professionals in the field, together with high level information for institutional heads, policy makers and governing bodies.