Strong growth in philanthropic giving to universities

Philanthropy to universities in Australia and New Zealand is gathering momentum, according to a new survey, with significant rises in new funds secured and cash income received.

“Australians and New Zealanders are generous people. They will give to education. They do so in increasing numbers and with striking generosity,” said Tim Dolan, vice-principal (advancement), University of Sydney, and chair of the Group of Eight Committee of Chief Advancement Officers.

“This is not just a matter of anecdote and impression. With the survey of charitable giving now in its fourth year, we are accumulating real evidence and can begin to see helpful trends in the data collected.”

The amount of new funds secured rose by 26% and cash income received rose by 25% in 2015 to record levels.

“It reflects strong growth in giving to Go8 [Group of Eight] and, encouragingly, to non-Go8 universities in particular. This growth has continued notwithstanding an economy that was less confident than in recent years and despite political uncertainty over funding structures and deregulation. We can see that the right fundraising behaviour, consistently and professionally followed, produces satisfying results,” Dolan said.

Sue Cunningham, president and CEO of the Council for Advancement and Support of Education, which published the survey, says it shows real evidence that more individuals are increasingly realising the powerful impact that higher education institutions have in their communities and around the world.

“It is encouraging to see such a positive increase in philanthropic investment and donor confidence in higher education in Australia and New Zealand. This is combined with the growth in the total number of donors and particularly in alumni donors,” Cunningham said.

“The survey’s findings indicate that universities are bringing increased focus upon strengthening engagement with their alumni and other supporters and thereby developing strong and sustainable relationships.”

Twenty-four out of approximately 51 higher education institutions in Australia and New Zealand that are involved in some form of fundraising or alumni relations activities participated in this year’s Charitable Giving to Universities in Australia and New Zealand Survey.

This is the largest number of universities to date to have taken part, with more than 50% of eligible Australian institutions submitting a response. However, the number of universities from New Zealand participating dropped from five last year to one this year.

The survey was initiated by the Group of Eight research-intensive universities in 2012. Dolan said 2015 was an exceptional year for income from bequests, standing out more sharply because of a weaker performance in 2014. Total cash income from bequests, at A$72.64 million (US$56 million) in 2015, was 162% higher than the amount received in bequests in 2014 (A$27.70 million).

This income strand is steadily strengthening as universities come to understand the importance of sustaining long-term relationships with donors, he said. “Every university should pay consistent attention to ‘planned giving’ at a time when we can expect a massive intergenerational shift in wealth in the region – further fuelled by rising property prices in our cities.”

He said the headline-grabbing eight-figure gifts that are the real powerhouse of philanthropic success have been achieved more broadly in 2015.

There were 70 pledges of A$1 million or more, with a 60% increase in seven-figure gifts to non-Go8 institutions. The total number of gifts over A$1 million in 2015 (74) was 72% higher than in 2014 (43).

Dolan said: “There is no question that the oldest universities start the process of engaging their alumni and friends with some advantages. But these substantial gifts to institutions beyond the ‘usual suspects’ should encourage all Australasian universities to develop advancement initiatives focused on their particular strengths and opportunities.”

He said it is striking that, while alumni of Go8 universities are more generous to their alma mater than other graduates, non-alumni donors are evenly divided between Go8 and non-Go8 institutions.

“That suggests the universities concerned are doing a fine job in telling the story: presenting their philanthropic projects not as a matter of obligation, or ‘giving back’, but more as a good cause, a project worthy of investment, regardless of whether the donor is a graduate, a student’s parent, a resident of the community or an individual, trust or company who cares about an area where the university has real strengths.”

Last year’s report encouraged advancement offices to rebalance investment slightly in favour of alumni relations, as distinct from fundraising teams and there are now signs of a shift from the era when alumni relations was somewhat nervously characterised as “friend-raising” to a more purposeful, strategic and measurable engagement with an institution’s supporters en masse, Dolan said.

The total amount of philanthropic income secured in new funds increased by 26% since 2014 and reached A$538.19 million in 2015; and the total cash income received increased by 24% since 2014 to A$392.83 million in 2015.

The total number of donors and total number of alumni donors reached a peak of 60,452 and 33,442 respectively in 2015. Again there was a faster increase in the number of donors among non-Go8 institutions (48%) compared to Go8 institutions (24%).

The total number of contactable alumni was also at a record high in 2015, at nearly 3.29 million (median of 136,199 alumni). The share of alumni making gifts is 0.71% of the total number of contactable alumni in 2015, nearly double the share in 2013 when it was 0.37%. In 2015, non-alumni donors accounted for approximately 40% of total donors.

The survey also reveals the cost of fundraising activities. Institutions were investing 21 cents on fundraising activities per A$1 in new funds raised and 28 cents on fundraising activities per A$1 in cash income received.

This has been achieved by increasing fundraising staff. Both fundraising staff numbers and alumni relations staff numbers increased by 13% since 2014 with 406 fundraising staff (up from 359 in 2014) and 226 alumni relations staff (up from 200 in 2014) in employment in 2015.

Performing below capacity

Universities Australia Chief Executive Belinda Robinson said the growth in philanthropy income has enabled Australia's universities to pursue even more of the world-class research breakthroughs and outstanding education opportunities for which they are renowned.

"When the vision of our universities and the generosity of our donors come together, we've seen time and again that truly extraordinary things become possible," she said.

But Dolan warned that despite the promising figures there is no room for complacency, since most universities are still performing below capacity on their advancement potential.

“One reason for this is the ongoing frustration generated by the shortage of appropriate fundraising professionals. We have all found that the right people are hard to find and difficult to keep. If we could double our fundraising teams, the resulting impact would be phenomenal.”

He said encouragingly, a number of initiatives are taking shape to help train personnel in the longer term, including the introduction in Australia of the Council for Advancement and Support of Education’s Asia-Pacific’s Educational Fundraising Graduate Trainee Program, pioneered in Europe.