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Universities see an increase in donations


Shelagh Gastrow provides advisory services to the philanthropy sector, higher education advancement and non-profit sustainability. She works with individuals and families on how to integrate their wealth and their values into meaningful and effective philanthropy. From 2002-2015 she was founder and executive director of Inyathelo and focused her efforts on strengthening civil society and universities through programmes to develop their financial sustainability whilst promoting philanthropy in SA. Her work has gained public recognition locally and internationally.

The evidence is clear that over the past five years, and perhaps particularly after the #FeesMustFall campaign, increasing numbers of South Africans, local foundations and corporates are investing in higher education.

The 2018 Annual Survey of Philanthropy in Higher Education published by Inyathelo has been released and it shows some significant changes from the previous four years of the study. This report is the only resource that provides accurate information about philanthropic and corporate support for universities, although only eleven universities can supply the data required.

Since the advent of the new millennium, universities in South Africa have invested in the establishment of Development or Advancement offices that serve as the basis for attracting donor income which, alongside research income, is known as third stream income, separate from student fees and government subsidy. The best-practice elements in a Development or Advancement operation include marketing and communications, fund-raising and alumni relations.

What is evident, and this is an important lesson for higher education and the non-profit sector generally, is that the greater the investment in Development/Advancement, the greater the income. The survey shows a parallel correlation between the number of staff employed and the expenditure on fundraising and alumni relations in relation to income received.

To quote the author, Sean Jones, “…the gross figures suggest that the more an institution spends on attracting philanthropic income, the higher the amount of such income”.

Measuring return on investment is an interesting concept in the world of “attracting resources” in that some relationships and donations can take years to incubate and negotiate. As a result of work done 10 years prior, a particular year may well show a remarkable increase not necessarily related to the work of the current staff, especially when it comes to the receipt of bequests.

However, taking this into account, different institutions had different expenditure ratios, with the highest at 49% and the lowest at 4%. The lowest expenditure ratio meant that the institution only paid 4c for every rand received. At the same time, the report points out that these offices are often the front line for negotiating SETA funding and if this was also included in the figures, the cost ratios would improve significantly across the board.

To get to the actual figures, the report indicates that a “collective total of R1.71 billion was receipted as philanthropic income by the 11 participating universities in 2017. This was R978 million higher than recorded for the 10 universities in the 2013 sample.” In addition, 9 357 donors made contributions in 2017 compared to 4 355 in 2013.

Of significant note was the fact that the proportion of income from South African donors had risen to 72% of the total, 35 percentage points higher than in 2013. This is a significant shift as the previous pattern had been a heavy reliance on international private philanthropic funding.

This flies against the general view in South Africa that local philanthropy is not pulling its weight, but the evidence is now clear that over the last five years, and perhaps particularly after the #FeesMustFall campaign, increasing numbers of South Africans, local foundations and corporates are investing in higher education.

This augurs well for a possible shift to supporting civil society organisations as well. The statistics are interesting in that they show that while the largest proportion of philanthropic income came from trusts and foundations, this had dropped to 42% of income, a decrease from 61% in 2013. This does not necessarily mean that the amounts had reduced that much, as the overall total raised had increased substantially.

In contrast, the report showed an increase in private sector giving from 14% in 2013 to 25% in 2017, and most important, an increase from individual donors from 4% in 2013 to 20% of philanthropic income in 2017.

The report indicates that “the largest proportion of philanthropic funding from private donors came from inside the country, with 62% emanating from local sources and 38% from international private philanthropists. This represents a significant change from 2013 when 83% of private funding came from outside the country and only 17% from inside. In monetary terms, the amount received from local private donors was R675-million versus R403-million from private donors abroad.”

The mean size of donations from individuals also increased. In 2013 most were under R1,000, but in 2017 this had moved to the R1,000 – R9,999 slot. In addition, the number of donations between R1-million – R5-million doubled and those greater than R5-million trebled. The mean size of donations from local trusts and foundations grew from R600,000 in 2013 to R3-million in 2017.

This research opens up the issue of the lack of philanthropic support for historically disadvantaged institutions and there could potentially be a great deal of criticism related to this fact.

However, this is a two-edged sword and the realities around how philanthropy works means that those institutions that do not receive funding should review their own practice and consider how to build relationships with corporates and the private philanthropy sector.

Philanthropic money is private money, whether from a wealthy or poor person, and they will decide where to spend it. People are unlikely to make substantial grants to institutions they do not know, and where the institution itself has no capacity to connect with possible donors, even their own alumni. It is up to university leadership to engage with philanthropy and to create trust and confidence in the institution.

There is the old adage, if you don’t ask, you don’t get.

However, the world is even more complex than that, as philanthropy has moved far away from the “begging paradigm” to a more nuanced and sophisticated approach as to where their philanthropic rands can be best used for greater impact.

Universities that are receiving substantial income know this and that is why they invest in Development or Advancement units that can undertake the research required into the donor world, identify and approach potential supporters, engage with them personally and share what the impact of the institution is on people’s lives, whether through undergraduate education, research into new knowledge that benefits the world or outreach programmes that impact on communities.

Unfortunately, there is no short cut as the funds don’t fall off the giving tree without effort and commitment from the institutions themselves to personally engage with the philanthropy sector and the many South Africans who are willing to give. DM


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