FINLAND: New era of private benefactors

A new universities act has transformed institutions from branches of government into independent legal entities. Universities now face fewer restrictions in raising revenue via private donations and bequests.

They started to plan their private fund-raising activities last year but initial efforts were slow to pay off, largely because of the sluggish economy which affected the flow of corporate donations. Their current campaign is more about convincing individuals to start donating.

Although universities had the right to accept bequests and donations from foundations or private organisations before the new Act, these had to be recorded in separate accounts.

There was limited tax deductibility for these corporate donations but no tax break for donations from private citizens. This situation has been amended: donations of EUR850-250 000 (US$1,000-300,000) are now tax-deductible for individuals as well as foundations and companies. In the context of the Finnish welfare state, this is a radical change.

Universities have an extra incentive to maximise their donation pool this year: the government has offered 250% of the sums donated as a mechanism to kick-start universities' private fund-raising.

The offer ends in December. A recent report in Helsingin Sanomat, Finland's major broadsheet daily, says universities will ramp up their fund-raising from August after the 'annual closure' for summer.

Their main push for the remainder of the year will be for individual donations. To this end the University of Tampere, in Finland's third largest city, has already distributed 125,000 fund-raising brochures. Other regional universities might follow suit.

Several, particularly the larger ones, now have fundraising managers so there has been considerable investment in infrastructure to solicit donations.

Using information from universities and the Ministry of Education and Culture, Helsingin Sanomat tabulated targets and donations. The fully public universities set themselves targets of EUR1million-20million and so far have had varying levels of success.

The University of Turku, with 16,000 students, in Finland's second largest city, has achieved 28% of its EUR20 million target. Tampere, with 15,000 students, had a modest target of EUR1million but has over-achieved with EUR1.1million already.

The newly reformed university sector also has two foundation-based or semi-private universities. To become financially viable, they were required to have more privately sourced equity and therefore had much higher targets for private donations.

The 20,000 student-strong Aalto University's target was set at EUR200 million of which 75% has been earned so far. The result of a merger of three universities, Aalto is located in the capital region in Helsinki and nearby Espoo.

The government's desire for universities to generate more of their own income is an understandable one and Finland is not the first country to move down this path. But where donations are concerned, Finland might find itself in the same situation as countries such as the United Kingdom and Australia, where the practice of 'giving' to universities is much less developed than in the US.

Current legislation could even act as a barrier to wider-ranging public donations: they must be at least EUR850 before becoming tax-deductible, a possible disincentive to myriad low to middle income earners that might otherwise make an occasional manageably-sized donation.

At the other end of the donor scale, establishing an upper limit of EUR250,000 might restrict some corporate donors that might otherwise have donated more.

Click here to read about Finland's higher education reforms.

* Ian R Dobson is an Australian scholar who spends much of his time in Finland. He is editor of the Australian Universities' Review and the Journal for Higher Education Policy and Management.