An urgent step change is needed to boost fundraising in UK universities, a new report by the Sutton Trust has concluded. This must begin with a Government matched funding scheme of between £125 and £600m to encourage universities to develop their fundraising operations and increase their levels of endowment.

The report – University Fundraising: An Update – finds that although development activities in UK universities have grown during the last three years, the sector continues to lag seriously behind the US, in terms of funds raised, rates of alumni giving and endowment levels. For example, the 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.

The report also finds that significant fundraising activity remains the preserve of the academic ‘philanthropic elite’. Only Oxford and Cambridge compare with leading American universities, raising £185 million in 2004-05, holding endowments totalling £6 billion and achieving alumni giving rates of 10 per cent. The remaining UK higher education institutions have a combined endowment of £1.9 billion, on average raised £1.6 million each and have annual giving rates of approximately one per cent.

The report calls on the Government and universities to:

  • Introduce a matched funding scheme for private donations, capped at £1-5 million per institution
  •  Simplify tax laws to encourage annual giving and introduce tax efficient planned giving vehicles
  • Give high level university leaders (such as Chancellors and Vice Chancellors) a clear fundraising role, and appoint development professionals at the most senior levels
  • Publish more systematic and transparent reporting to monitor fundraising performance

Sir Peter Lampl, Chairman of the Sutton Trust, said: “Oxford and Cambridge and a handful of others are the only institutions where income from fundraising and endowments is a significant source of income. Changing this situation is certainly possible and the model should be American State universities, where annual fundraising and endowments have only been built up in the last 25 or so years.

What is needed is a step change and to make this happen the Government needs to introduce a matched funding scheme of between £1 million and £5 million per institution. It should also simplify tax laws to encourage annual giving and introduce planned giving vehicles to encourage donations for endowments.

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