News and Opinions

Philanthropic support to South African universities

Prof. Beverly Thaver, Professor of Higher Education at the University of the Western Cape

Inyathelo is acutely aware of the important role of higher education institutions in terms of education and training for high level skills and creating knowledge for society, especially given the implications of the Fourth Industrial Revolution. Thus, as societies become increasingly complex, the demand is for universities to be more responsive, which in turn places pressure on the funding base. However, currently, the latter is occurring in environments of heightened fiscal austerity.

In other words, there is a narrowing of government allocations and tuition fees. This means that universities have to tap into different sources of revenue, referred to as third stream income. This is very diverse and includes two types, namely altruistic giving (i.e. philanthropy) and contract-based income.

Inyathelo’s programme on higher education support advocates the advancement/enhancement of this broad range of income and support that is providing a key complementary source of revenue for South African universities. In light of this, there is the Annual Survey of Philanthropy in Higher Education (ASPHE), the aim of which is to provide an audit of philanthropic contributions/income to universities. Beginning in 2013, and now moving into its eighth year, the Survey has been administered to 40%-50% of the total number of universities in the South African system. The participating universities represent three types, referenced in the official system as Traditional Universities, Universities of Technology and Comprehensive Universities. We do not recite the content of the 2020 Report, based on 2019 income, as the results of the survey are available online, but highlight some significant findings and implications of the philanthropic and contract income portions pertaining to the budget share of the universities that have been participating in the research.

2020Read the survey: philanthropy-in-higher-education-aspihe-in- south-africa

The Report reveals that local and international philanthropists donated R1.55 billion to 10 South African universities in 2019. When contract income from Sector Education and Training Authorities (SETAs) is added, total Giving (in broad terms) increased to over R1.94 billion. While this figure does not take into account inflationary factors and statistical variances since the inception of the Survey (with the shift in the number of institutions and  fluctuations in the Rand currency, for the duration of the Survey that started in 2013), the figure is nonetheless significant.

On the point of the value of contributions, a further key finding is that the range between the highest and lowest amount of philanthropic and contract income to universities is extremely uneven. For example, one university attracted approximately R413 million, whilst another was able to generate R15 million. A statistical breakdown of, on the one hand, the size of income (donations) with, on the other hand, that of the historical legacies of institutions, is revelatory. The outcome of this correlation in the 2020 Survey (and, similarly, when benchmarked against 2013, which is when this research started) reveals a very skewed pattern.

In other words, the (2019 and 2013) income for historically disadvantaged and advantaged institutions is pegged in the range of 5% -6% and 95%-94%, respectively. (There are strong signals of uneven giving, which is reinforced when measured against certain types of institutions. It would be important to understand some of the reasons for this unevenness and the associated challenges.)

On the flip side, there are positive signals, with opportunities. For example, the data shows an increase in the number of national over international donors, who are contributing to South African universities. While this geographical pattern of giving on the part of donors is not replicated in terms of the actual value of the contributions (in other words, the value of international contributions is still higher), it does send out a positive signal about domestic (i.e. national, which includes alumni) donors contributing to the public good in South Africa. These are heart-warming signals around voluntary giving. Understanding the characteristics of the domestic sources of philanthropy could serve as a basis for further discussion about the most effective way to stimulate and incentivise national giving.

A further finding from the data is the important role of contract income (as outlined earlier in the third stream basket) from selected Sector Education and Training Authorities (SETA). This source of income tends to be channelled towards research, including graduate programmes with high social relevance.

Potentially, this could be seen as a form of giving to research, which is essentially about the production of knowledge. Hence, there are opportunities to consolidate the innovations yielded by this form of income. Innovative programmes could be showcased nationally and internationally.

Notably, the aspect of human resources is always critical, as tapping into diverse sources of income can be labour-intensive. In this respect, the data shows a direct correlation between the number of staff engaged in Advancement offices and the amount of donor income generated.

Simply stated, the greater the investment by institutions in staff for the designated three functions (professional fundraising, alumni relations and support), the higher the income dividend. In the current environment, a key condition for strengthening the function of fundraising would be to optimise the use of digital technologies by drawing on (or developing) diverse platforms.

The area of philanthropic giving in its diverse forms (foundations, trusts, individuals, endowments, private sector) is an important source of income for higher education institutions in South Africa. Undoubtedly, whether from national or international sources, whether small or large, philanthropic giving complements the revenue base and is welcomed as it is a building block for the overall higher education system. In light of this, while certain institutions are well endowed to respond to the call, there are several institutions in South Africa where the inequities of the legacy continue to limit the extent to which they can reach out and access these opportunities.

So, there is an opportunity to establish a national coordinated platform to engage and better understand how to leverage funding globally and locally. There are signs of commitment by domestic donors to raising the knowledge (intellectual-skills-innovation) base of (South African) society. It is important to harness this energy. Understanding, or exploring, relevant contextual and institutional factors, that might hamper or facilitate income from these diverse sources, would be necessary. For example, continuing to find ways to enhance the university environment would be one way to attract philanthropic donors as they are keen to ‘see’ that university structures are efficient.

Globally, it would be important to analyse support from foreign government agencies. Greater understanding of trends and shifts among bilateral and multilateral aid agencies could shed light on how to develop strategies for collaboration. Notably, the United Nation’s template of Sustainable Development Goals continues to shape global philanthropy (i.e. giving). Related to this, is to understand whether the Covid-19 pandemic (given the sea change generated by it) might have prompted organisations and individuals to draw on their personal trusts and other investments for the betterment of society.

Overall the universities have benefitted from different types of philanthropic support, including individual donors, trusts, foundations and the private sector, at both national and international levels. Inyathelo commends all forms of giving and sharing as these can only further strengthen the higher education system in South Africa and, in turn, share this wisdom on the African continent as well as globally.

 Originally published in our 2021 Annual Report


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