Opinionista Shelagh Gastrow 10 October 2016

Student protests and third stream income

How universities will be funded in future is of major concern to South Africans, not only the students themselves, their parents, leadership and faculty, research teams, business and government, but also to those private individuals and philanthropic entities that support tertiary education institutions.

The events of 2015 and 2016 have forced many to re-evaluate their commitments. While people who work in the charitable paradigm may make donations in the form of bursaries for needy students, those involved in strategic philanthropy explore how to invest their philanthropic funds for greatest impact. Bursaries and scholarships still remain a priority, but philanthropy has also invested in academic development; student development to enhance access and success; the establishment of academic Chairs; community related projects that are aligned with teaching and research; special courses; sports; equipment and buildings; library collections; student festivals, general infrastructure and, most important, endowment for the future. Along with private research contracts with academics and efforts at income through commercialisation, this is known as third stream income.

Taking a quick view of what universities seek from private funders, the following generally emerge: bursaries for disadvantaged students; research, capital projects and community engagement.

The UCT website is very specific and more imaginative in terms of the strategic focus for which it seeks support. These include advancing African scholarship in the global arena; developing cutting-edge healthcare interventions; cultivating artistic excellence; pursuing innovation and enterprise, creating opportunity and building leadership and promoting good governance and human rights. These key areas will have specific programmes attached to them and could provide many funders with an interesting entry point into various focus areas of interest. The advantage universities have is that they offer diverse opportunities for interested donors, when compared to single issue non-profit organisations, for example.

Philanthropy has become more specific in terms of what it wants to achieve and now it is quite rare for philanthropic funds to be donated to an institution for general purposes or endowment. If we look at the Michael and Susan Dell Foundation’s funding in South Africa, they are exploring what kind of contribution they can make towards education transformation in the country. Besides an investment in basic education, they “support first-generation university students from poor families through their studies to graduation and meaningful careers.” This doesn’t only involve money, but also mentorships and other support. Other philanthropic foundations might focus more specifically on a particular course of study such as engineering where they will provide support for research, computers, research equipment, laboratories, bursaries and doctoral scholarships.

When reviewing the number of bursaries provided by the private sector and private philanthropy in South Africa, we are looking at thousands. How do these donors view the current situation where this funding will have little impact as universities close down? Will they stop their philanthropic investment in the coming years? Will they reduce their risk and insist on only funding high-performing students? Will they cut back on funding while the universities are in such crisis? They may well ask why they should fund libraries and other facilities that remain closed or go up in smoke?

The expectation that the rich are obliged to support the poor views a world through a charitable prism, with power relationships that our own students wish to reject. Charity is patronising, charity involves unbalanced power relations, and charity often removes personal dignity and undermines self-reliance. What is important is how the contributions made to improve society happen, and they cannot take place in a charitable paradigm. Philanthropy has to move from a mechanistic approach to full engagement with multiple participants to ensure buy-in and agreement about what our philanthropic investment is trying to achieve.

South Africans are generous and there are numerous research projects that have concluded that a large majority of South Africans do give, and education is the sector that receives most of the funding. A recent research project , focused on 21 private foundations (and there are hundreds in South Africa), revealed that the annual giving spend was in the region of R764-million. This comes from institutionalised philanthropy and does not measure private individuals who give from their personal pockets. There is a huge amount of goodwill and a great yearning to see South African youth succeed.

We tend to view the incredible successes of university fund-raising in the USA and some universities in South Africa have invested in the development of fund-raising units. These have had various degrees of success. In the 2015 Annual Survey of Philanthropy in Higher Education by Sean Jones and published by Inyathelo, the total amount raised by the eleven universities that participated in the survey came to R876-million; 5 734 donors were involved, yet the proportion of local income compared to international support declined. One university had 521 international donors, while others had none.

Generally South African universities have found it difficult to generate third stream income. Some of the reasons include the poor tax incentives for philanthropy in the country; the lack of linkages between universities and the corporate sector, despite the fact that business is heavily reliant on universities to contribute towards their skills requirements, and that relationships with alumni, even those in positions of influence, have hardly been tapped and some universities are simply situated in isolated and poor environments, particularly the historically disadvantaged institutions.

However, philanthropic funding is still a drop in the ocean in terms of what is required to provide free higher education to all students in South Africa. How should philanthropy move forward in the current turmoil around the future of our universities? There are probably various approaches, from those who are shutting down completely to others who will look for ways and means to contribute towards the long-term survival of what are essentially Africa’s most precious and prestigious higher education institutions.

The latter approach will involve risk, engagement with multiple stakeholders and sophisticated strategy to ensure impact. However, from my perspective, these institutions are too important, not only to South Africa and the continent, but also to the positioning of this country in the global knowledge economy.

South Africa has the ability to generate new paradigms and cutting-edge solutions to modern problems. International researchers come to South Africa to look for solutions from the South. This is a young country with a growing number of young people with so much to offer. Looking inwards creates paralysis and it is important for all of us to ensure that we don’t get trapped in a knee-jerk response to the current crisis but look at unique, groundbreaking and innovative ways for philanthropy to continue its contribution. DM