What Can We Learn From Universities About Philanthropy?

Tobin Aldrich

12th March

As I’ve said before, one of the great pleasures of consultancy is the variety of the projects we get to do.

In the last year we have been working more with Higher Education organisations than in previous years.  It’s a fascinating world and there are definitely learnings for the wider charity sector.

HE philanthropy is very different from charity fundraising. In some ways they can be seen as mirror images of each other.

What HE really excels at is major giving. We have been working with a University in Australia that raises 97% of its over $100m annual philanthropic income from gifts of over $100,000 and nearly 75% from gifts of over $1m. HE institutions are the places where really big giving is happening - the largest gift to an Australian University so far has been $250m.  By contrast, the biggest UK fundraising charities typically raise around 5% of their income from major gifts. And that proportion hasn’t really changed for many years.

Why do universities do so well with larger gifts? They have an advantage with their alumni communities, people who have a lifelong relationship with the institution and to at least some degree, a stake in its success. But only around half of the biggest gifts to universities come from alumni. So what else is going on?

One of the things that has really struck us about working with universities is the sense of possibility and optimism in these places. We’ve always said that to raise a very significant amount of money you need an idea that is big enough. Universities are full of people who can generate very big ideas. That isn’t to say that turning these ideas into deliverable programmes isn’t often very challenging, but this is an environment which enables big picture thinking while the institutions are large enough to be able to pull them off.    

The universities which routinely secure these very big gifts have learned how to build philanthropy into the fabric of the institution. US universities have been doing this for over a century but we are increasingly seeing this in the rest of the anglosphere as well as in other parts of the world such as Asia. Institutional leadership are committed to and prioritise philanthropy, and academics engage more and more with philanthropists.  Major projects are co-created with potential funders and other partners. Donor stewardship is proactive and professionally managed.

This isn’t to say that everything in the HE garden is rosy. The sector has as many challenges as the wider charity world and there is much variation in philanthropic performance across institutions.

Compared to the charity sector, HE is generally much less good at delivering effective programmes to engage large numbers of smaller donors. Philanthropy programmes built around a one-to-one approach can really struggle even to take smaller gifts. Trying to give a small gift to a major university can be a ridiculously difficult process.

Although in theory universities understand how to deliver one-to-many engagement through alumni programmes, these often struggle to convert into effective fundraising, at least outside the US.  There is much the HE sector can take from the best of supporter engagement practice in the more progressive charities.

What universities and charities do have in common is a struggle to effectively deliver engagement progress for supporters who fall between the major giving and mass donor programmes, what is often called “the missing middle”. People who have the capacity to give mid-tier gifts have very significant potential value but too often fall between organisational siloes and do not receive the attention they deserve.

As we hopefully do more work in the HE sector, we will continue to share learnings across sectors. There is much potential for collaboration here in order to engage donors more effectively around ways giving can achieve transformative outcomes.

Universities don’t have the secret to great fundraising any more than the charity sector does but each side has much to learn from each other.