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UK universities consider higher fees as US institutions’ fundraising drops

Fundraising | Stefan Marseglia | 15 Feb 2010

Universities may have to raise tuition fees in order to maintain teaching standards, according to research released last week.

The research paper by PolicyExchange, More Fees Please? urges the government to “make its first move on fees a bold one” by setting the cap at £5,000 or over, in order to ensure the majority of institutions don’t just charge the maximum fee and prevent a market from being activated.

With the government’s total outstanding student debt currently at £25m, and with an expected increase to £55bn by 2018, More Fees Please? argues that such a rise in fees is necessary to make up for a public funding shortfall, but insists it won’t deter people from lower-income backgrounds from applying to university.

Overall, universities have generated close to an additional £2.7bn in income from top-up fees since 2006, while in 2007-08, there were 341,810 students from outside the United Kingdom registered in universities, making up nearly 15 per cent of the total student population.

Joanna Motion, CASE International vice president for international operations, told Civil Society that as universities face tightened budgets, philanthropic fundraising will become increasingly important.

"We are in for an era of public funding cuts and continuing debate about fees. In that context, the ability to invest independently in the quality of the student experience and to help ensure that costs are not perceived as a deterrent by prospective students provides valuable room for manoeuvre. Expect to see thoughtful vice-chancellors continuing to invest in alumni relations and development offices as the fees debate plays out," she said.

"Bursaries and scholarships are now a familiar item on the philanthropic agenda for most universities. Donors large and small see the value of channelling their giving in this way. And when a university first ventures into fundraising, student support is often the successful entry route."

US university fundraising income takes a tumble

Meanwhile, a report by Voluntary Support of Education in the US reports American universities are facing a funding crisis of their own.

The survey of 1, 027 respondents, which was released in February 2010, found that the top 20 institutions, including the likes of Harvard, raised $1.13bn less than during the same period in 2008 from private donors – a total decline of 11.9 per cent. With state budget cuts, the total decline in funding of universities dropped by 22.3 per cent.

Individual giving by alumni members and gifts for capital purposes for the likes of endowments and buildings also dropped in both dollar and participation.

For Ann Kaplan, director of the VSE survey, the outcomes of the survey were no surprise.

“Charitable contributions to education institutions facilitate the objectives of both donors and institutions in a relationship that has endured through a variety of economic circumstances,” said Kaplan. “2009 was a difficult year for colleges and universities and, indeed, also for the individuals and institutions that care about them.”

However, the survey does not only reveal cost-cutting measures to the United States' educational system.  The University of Washington and a number of other institutions recorded best-ever fundraising years last year.

The number of gifts being receiving by higher education institutions from corporations and religious organisations also rose, from 7.2 per cent in 2008 to 9.8 percent in 2009.

Yet, speaking to The Washington Post, Kaplan said she did not expect the improvement to bring donations back to the 2008 level.

“If the past is an indication of the future, things should start to recover now. How quickly that’s going to happen, I’m not sure,” said Kaplan.

Kate Hunter, executive director of CASE Europe, said that the US is a different and more mature market for university fundraising than the UK.

“Undoubtedly the recession will have had an impact on charitable giving in the UK as a whole, nevertheless in recent years giving to education has increased year on year, as demonstrated by the 2007/8 Ross-CASE survey of HE philanthropy and also the Coutts Million Pound Donor report, released in late 2009,” she said.

“The 2008/09 Ross-CASE survey will be released in the coming months and the Council for Advancement and Support of Education (CASE) expects to see an increase in giving to education as we learn of the first wave of results from the matched funding scheme. Earlier fundraising capacity building and an increasing professionalism combined with the matched funding scheme and an overall growth in educational philanthropy should cushion the sector from some of the effects of the recession."

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