Liz Johnston reflects on today’s Sutton Trust research on the US-UK university endowments gap.
The University of Cambridge’s endowment stands at almost £5billion.
The sum is staggering, but hearing that Cambridge has had considerable fundraising success doesn’t come as a surprise to me at all. As an alumnus, I’ve had numerous contacts from both the University and my College in the years since I graduated. Many of these have been explicitly aimed at securing a donation of some of my hard-earned cash for the College coffers, and I know how much effort goes into trying to keep alumni engaged. Fundraising tactics vary from drinks receptions in art galleries, magazines, emails from the Master, and phonecalls from current students as part of the annual telethon (who always seem to have an uncanny knowledge of all the teams and activities I spent my free time on at College).
Most of the time I treat these fundraising calls with indifference at best, and as an interruption of my quiet evening in front of the TV at worst. However, Cambridge recently had a concerted fundraising drive to mark its 800th anniversary, where almost one in three alumni contacted gave a donation.
It made me wonder how other universities keep in touch with their alumni, and if they enjoy similar levels of success?
Our newly published research on university endowments in the US and the UK shows that the vast majority of UK universities do not enjoy anywhere near the levels of fundraising success seen at Cambridge.
Endowment funds at American universities continue to dwarf those held by UK universities. They have recovered from the economic downturn better than their British counterparts, even though they were worse hit in the short-term, so that they are now worth a quarter more than they were a decade ago. Meanwhile endowments funds at most UK universities – apart from Oxford and Cambridge – have failed to see any significant growth over the same period.
Oxford and Cambridge have endowments large enough to put them in the top 20 US universities, but no other British university comes close to making this list. Even state universities, the relatively poor relations of the Ivy Leagues in the US system, have billion pound endowments. In the UK, apart from Oxbridge no university has more than £300m invested.
So why does the size of a university’s endowment matter to the Sutton Trust – a foundation concerned with social mobility through education? The fact is a healthy endowment fund allows a university to offer innovative ways of supporting students financially.
Previous Sutton Trust research has shown that there is a significant premium for people obtaining a postgraduate qualification. However, with the significant costs associated with postgraduate study, there is concern (from Alan Milburn, among others) that being able to pay ‘up-front’ is a determining factor in whether or not someone undertakes a postgraduate degree.
This should not be the case.
In the US, many universities use their endowment funds to provide targeted support for postgraduates. In the UK, support for postgraduate students is patchy at best. Explicitly linking some of those funds to support for postgraduates in the UK could open up opportunities for able students who might not otherwise be able to study for a postgraduate degree.
Encouraging donors and Vice-Chancellors to channel donations into an endowment fund, especially when budgets are under pressure, is a huge challenge. There are always more immediate financial pressures which it can be tempting to direct donations towards. But both universities and government need to make a concerted effort to think about higher education in the long-term. Oxford and Cambridge in particular could lead the way in the UK, following the example set by those universities in the US with similarly-sized endowments. Channelling these towards innovative postgraduate support schemes would benefit both the institutions and society in the long-run.
So next time your TV watching is interrupted by a fundraising call let’s hope it will be an opportunity to contribute to a strong endowment that can improve access to university for all.