Media Statements

Time to attract more local university funders

Sean Jones and Nazli Abrahams

Many South African tertiary educational institutions are acutely dependent on a small number of international donors for their philanthropic income.
For many years, information about the state of philanthropic support to higher educations in South Africa was sparse and scattered. This lack of information took on added significance in the context of the growing national crisis in university student funding, and the protest actions.
To address the need for reliable and consistent information, Inyathelo, the South African Institute for Advancement, released its first Annual Survey of Philanthropy in Higher Education (ASPIHE) two years ago.
Inyathelo, established in 2002, works to sustain and strengthen civil society organisations and grow local giving in support of a vibrant democracy in South Africa. One of its roles is providing higher education institutions (and civil society organisations) with training and technical support in order to strengthen their sustainability.
The third and latest ASPIHE report, conducted by EduActive Solutions on behalf of Inyathelo, and with financial support from the Kresge Foundation, offers some fascinating insights into higher education funding.
The 11 participating universities reported a collective total of more than R1.2 billion in
receipted philanthropic income during 2015. This is R515 million higher than recorded for the 10 universities in the first (2013) sample.

A total of 8 519 donors made philanthropic contributions to the 11 institutions compared with 4 355 donors in 2013 when the sample was 10 institutions. The proportion of income from local sources was however 48%, down from 53% in 2013.

Only 7% of donors – all of whom were international – accounted for more than half (52%) of total philanthropic income to this sample of South African institutions.

The gravity of this situation becomes apparent when comparing the numbers of foreign donors with individual institutions. The median number of international donors per institution was only four, although one institution did have as many as 446 international donors.

Only two universities out of the 11 had more than 30 international donors. This suggests that institutions are, by and large, acutely dependent for their philanthropic income on just a handful of international donors.

While international funding is welcome and vital at present, the heavy dependence of South African universities on philanthropic income from abroad is dangerous and potentially disastrous in the light of geopolitical shifts globally.
As is being borne out now by the new policies in the United States, foreign philanthropic income streams are unpredictable and unreliable. Support from abroad can be curtailed by shifting political moods, new crises elsewhere in the world, new leadership of charitable organisations, foreign exchange fluctuations, and a host of other variables beyond our control.
One strategic priority, therefore, must be to prioritise heavily, in terms of time and resources, strengthening and extending relationships with existing local donors and cultivating new local donors from among those who have yet to fund higher education institutions.
Currently, the largest proportion of income comes from trusts and foundations (58%) while individuals comprise the largest donor category (83% of all donors).
A possible means of approaching this challenge is a concerted national campaign, by or on behalf of the higher education sector as a whole, to recruit local individuals, organisations and companies as donors to higher education.
A second strategic priority should be to convince the corporate sector of the value, both for its own wellbeing and the national good, of serving as a bulwark to higher education.
In terms of the private sector, this study showed that, between 2013 and 2015, the proportion of philanthropic income increased from 14% to 17%. In real terms, this was a shift from around R92 million in 2013 to some R204 million in 2015 – an increase of circa R112 million. (Admittedly with one extra university in the sample, but this accounted for only a small fraction of the increase.)
There is anecdotal information that private sector contributions to universities continued to increase during 2016, at least in some instances as a direct response to the Fees Must Fall movement resulting in protests and other disruptions.
This is an extremely encouraging development, albeit still much smaller in monetary terms than might be desired. It is of fundamental importance to the higher education sector that corporates show confidence in it. If business supports universities, then others – notably high net worth individuals, alumni and a broader range of charitable trusts and foundations – can more easily be persuaded to follow suit.
Third, it is vital that less wealthy universities receive higher levels of support from the donor world, particularly for student funding. This study has shown that so-called non-traditional universities, as well as several poorly-endowed traditional ones, receive gravely disproportionate support from the philanthropic sector. Clearly this skewed distribution of giving perpetuates a raft of other inequalities.
It is important to recognise that it is precisely these non-traditional and less affluent traditional universities which tend to have the largest numbers of students falling outside the various student funding schemes. They are, therefore, most fragile and prone to instability. These particular institutions would naturally be more stable if their students were better supported by the philanthropic offerings of businesses, individuals and others.
There is strong economic motivation too: large numbers of graduates and university drop-outs carrying high levels of debt are a drain on the economy, while graduates with smaller levels of debt and at least some disposable income contribute towards building it.
A systematic and integrated approach to building and managing relationships with key constituencies in order to attract financial, as well as stakeholder support, would go a long way to assist with transformation initiatives at universities.
This multi-layered approach, which Inyathelo refers to as the Advancement method, is considered part of a sustainable solution to the complex circumstances which universities now find themselves in.

To download the full ASPIHE report.

Sean Jones is MD of EduActive Solutions and an Associate of Inyathelo, the South African Institute for Advancement. Nazli Abrahams is Programme Director of Inyathelo (www.inyathelo.org.za).

Universities that took part in the third ASPIHE survey: Cape Peninsula University of Technology (CPUT), University of Cape Town (UCT), Durban University of Technology (DUT), University of the Free State (UFS), University of Johannesburg (UJ), University of KwaZulu-Natal (UKZN), University of Pretoria (UP), Tshwane University of Technology (TUT), University of the Western Cape (UWC), University of the Witwatersrand (Wits) and University of Zululand (UniZulu).