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Philanthropy’s limits

Prospects for new funding streams are overplayed

It always comes as a relief when a close examination of actual evidence serves to dispel some happy myth, especially when the latter is in danger of crystallising into conventional wisdom. So we warmly welcome the findings of Giving in Evidence, a detailed report released last month on the prospects for fundraising from philanthropy in European universities.

The report, prepared by researchers at the University of Kent, UK, and VU University Amsterdam, punches some very large holes in the idea that a large harvest of low-hanging philanthropic fruit dangles out there for cash-hungry university hands to pluck.

Its message is perhaps best captured by a phrase in the executive summary: “fundraising success should be viewed as a result of what an institution is…as well as what [it] does”. In other words, the status and history of a university will account for a very large part of its likely fund-raising success.

The report is clear that universities lacking long and prestigious histories can still take measures to acquire what it terms “accumulative advantage”, and position themselves as attractive to potential donors. Nevertheless, it should serve as a warning against investing heavily in “philanthropic fundraising” without first taking steps to make sure that such advantages are in place. This might sound like a statement of the obvious; but past trends in higher education have amply demonstrated that university managements are capable of putting considerable effort and resource in pursuit of funding streams that aren’t really out there.

The message of the report is a timely one, when politicians of various hues are imploring universities to make up for increasingly-shaky government support by getting out and tracking down alternative funding streams, primarily from philanthropy or industry.

The reality is that in today’s severely-trying economic climate, the prospects for obtaining research support from these two sets of sources have each sharply diminished—and will continue to do so for the foreseeable future. Donations might fund a new building, scholarship or research project, but the notion that charities or business can somehow ‘fill the gap’ left by public spending cuts has been roundly discredited.

Of course there are things that universities can do to maximise their prospects: most obviously, they can attempt to forge distinct identities that will differentiate them from their neighbours. But their goals need to be realistic, and their approach needs to be carefully tailored to match the actual funding prospects in their territory or region.

Philanthropic funding for universities is more highly developed in some EU nations, such as the UK, than in others. But it is still nothing akin to what happens in the United States. For long-standing cultural reasons—not least the quaint idea that very rich Europeans should pay taxes rather than accumulate vast wealth—that will remain the case.

Before European universities throw themselves wholeheartedly into the US mantra of “ask and you shall receive”, they should remember that only occasionally will immediate success be the first rung on a long ladder to greater wealth. Sometimes what they receive will remain small—too insubstantial, even, to warrant the cost of asking.