Research indicates universities' reliance on high foreign donations

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A key finding is the heavy dependence on overseas donors – while comprising only 7% of supporters, they contribute more than half (52%) of philanthropic income for local universities. Therefore, it is vital that more local individuals, companies and philanthropists come on board to support universities financially for long-term sustainability.

This is particularly the case for poorer universities, where many students fall outside funding schemes. Higher education bodies would also benefit from upskilling their senior fund-raising and support staff, which already attract around R2 billion every year for the sector.

Closing research gap on funding

“The path-breaking annual survey is the only high-level research into philanthropic funding at local universities and was compiled by Inyathelo Associate, Sean Jones,” said Inyathelo programme manager, Nazli Abrahams.

“Before the first ASPIHE report was published, information about the state of philanthropic support to higher education institutions in South Africa was sparse and scattered. Few universities collected relevant data in a rigorous or organised way for internal purposes, least of all made it available to others, and nothing approaching a national perspective was available.

“This lack of information about philanthropic funding to the higher education sector and indeed about all forms of third-stream income, has taken on added significance in the context of the growing national crisis in university and student funding and the protest actions. A further motivation for the study is to encourage universities to improve data collection and management information systems and to standardise definitions and categories across the sector.”

The research was funded by the Kresge Foundation (kresge.org), an Inyathelo partner for more than a decade.

The 11 universities that took part in this survey are Cape Peninsula University of Technology, University of Cape Town, Durban University of Technology, University of the Free State, University of Johannesburg, University of KwaZulu-Natal, University of Pretoria, Tshwane University of Technology, University of the Western Cape, University of the Witwatersrand and University of Zululand.

The 11 universities which form part of the survey received a collective total of over R1.2 billion in philanthropic income during 2015. This is R515 million higher than recorded for 10 universities in the 2013 sample.

Further highlights

• More donors on board: A total of 8,519 donors made philanthropic contributions in 2015, compared with 4,355 donors in 2013.
  
• The largest proportion of income comes from trusts and foundations (58%) while individuals comprise the largest donor category (83% of all donors). (See figure 1 below.)
  
• Overseas donors contribute more than half of donor income: South African donors accounted for 93% of all donors in 2015 compared with 87% in 2013. International donors comprised only 7% of donors ‒ yet contributed more than half (52%) of philanthropic income. (See figures 2 and 3 below.)
  
• Skewed overseas support: One institution had 466 international donors, while four institutions had only two or less.
  
• International gifts are worth more: In the trust and foundations funding stream, the local mean gift size was R2.3 million in 2015. This compares with R4 million among trusts and foundations based outside South Africa.

“While international funding is welcome and vital at present, this heavy dependence on overseas philanthropists is potentially disastrous given global geopolitical shifts.”

As borne out by new policies in the US, foreign philanthropic income streams are unpredictable and unreliable. Support from abroad can be curtailed by shifting political moods, new crises elsewhere in the world, changing leadership of charitable organisations, foreign exchange fluctuations, and other variables.

“One strategic priority must be strengthening and extending relationships with existing local donors and cultivating new local donors from among those who have yet to fund higher education institutions.”

Professional support staff

“Properly trained and resourced professionals, proficient in matters such as financial management and fundraising tools, are key to sustainability.”

Excluding interns, the 11 universities employed 178 full-time and part-time staff in fundraising, development and alumni relations in 2015 (up from 136 staff in the 2013 sample.) Some 45% worked in fundraising and development, 30% in alumni relations), and 25% in support functions in 2015.

“Ultimately, the game-changing potential of philanthropy in higher education will only be realised to the full if university operations are professionalised, institutionally entrenched and properly resourced. If Advancement professionals are encouraged and supported, the philanthropic appeal of South African universities can be assured well into the future,” concludes Abrahams.
“Inyathelo has always advised that universities diversify their funding streams, and offers training in adopting a systematic and integrated approach to building and managing relationships with key stakeholders,” adds Inyathelo executive director, Jessica Rees-Jones.

“As South Africa marks Youth Month with the theme of ‘Advancing Youth Economic Empowerment’, it is vital that we ensure the long-term sustainability of our tertiary education institutions. They are key to growing the skills and talents of young people so that they can fulfil their potential and also contribute to our country’s economic development and productivity.”

Download the full report.