Britain's Universities Go Begging

Cash-strapped colleges are following the U.S. example and turning to alumni for help, so far with no great success

By Beth Carney

Nearly two years ago, graduates of Oxford University's 488-year-old Corpus Christi College had their first taste of a distinctly American collegiate tradition: the fund-raising phone-a-thon. Students paid to dial up the college's alumni during spring break raised $280,000 to support graduate student grants. This spring, thanks to a donor who has offered matching funds, the college is poised to double that amount. "These things are starting to happen," says Peter Lampl, chairman of the educational Sutton Trust charity, who is donating the $188,000 to help Corpus Christi, his alma mater.

Indeed, British graduates can expect more of such calls, as universities facing a cash crunch make fund-raising a priority. Like other European countries where education has traditionally been publicly funded, Britain lags far behind the U.S. when it comes to private fund-raising. But changing long-standing perceptions, and the very nature of philanthropy in Britain, won't be easy.


  Still, government officials and university administrators are trying. The government recently announced that it is making available the equivalent of $14 million in matching funds for a pilot program, starting in April, to help a select group of universities launch professional development offices. "I think, obviously, they've looked across the water [to the U.S.] and seen how successful this can be in some universities," said Eric Thomas, vice-chancellor of the University of Bristol and chairman of a government task force that reported last year on voluntary giving.

Britain's universities have a long way to go before they match the fund-raising muscle of their American counterparts. Figures are only now beginning to be collected for annual giving, but one sign of financial support is in endowments.

Only Oxford and Cambridge have significant endowments, thanks to their long histories and efforts in the past 15 years to step up fund-raising. Oxford's endowment of about $3.9 billion and Cambridge's of $4.5 billion are still small, however, when compared with American universities such as Yale, with $12.7 billion and Princeton's $9.9 billion, not to mention Harvard, with its peerless $22 billion, according to the National Association of College & University Business Officers.

Even more striking is the lack of depth in British university endowments. According to a 2003 study commissioned by the Sutton Trust, the combined endowments of the top two British universities -- often referred to as "Oxbridge" -- were more than twice the value of the combined endowments of every other university in the country. Moreover, far fewer British alumni dig into their pockets. In Britain, Cambridge is a standout, with 9% of its alumni having dominated in 2004. In contrast, Princeton, high-performing by American standards, boasts that 59% of its alumni gave.


  At leading schools, attitudes have been gradually changing over the past 10 years, as select universities began following Oxford and Cambridge's lead by starting professional development offices. Now, about 20 British universities have full-fledged development offices, although half still have no staff at all devoted to cultivating alumni, according to the nonprofit Council for Advancement and Support of Education (CASE).

But years of rising enrollments and lean budgets are putting increasing pressure on all universities to look for outside funds. A momentous change comes next year, when many universities will start charging fees of up to $5,650, an increase from the current across-the-board tuition of about $2,260. Other income-boosting tactics include recruiting overseas students, who pay higher fees than Europeans. Oxford University, for example, announced last week that financial reasons would lead it to increase non-European undergraduate enrollment from 7% to 12%.

"There's been a real focusing of minds in the past year," says Joanna Motion, CASE's vice-president of international operations, who says the impending imposition of variable fees has forced schools to think competitively. By Beth Carney


  Like the rest of Europe, Britain faces obstacles in replicating America's success raising money for higher education. The main factor is that since World War II, universities have been seen as a government responsibility. Many feel that, as taxpayers, they are already supporting education with their taxes.

Moreover, British philanthropic habits differ from those of Americans. First, the tax incentive to give in Britain is not as strong, since charities, rather than individuals, claim the benefit. While the percentage donating is about the same at 70%, Americans give more -- 1.8% of GDP, vs. 0.7% in Britain -- according to the task force report.

In the U.S, education comes second only to religion in receiving support; in Britain, education doesn't even figure among the major recipient categories, which include medical research, children, international aid, and animals. Overall, Americans tend to give to organizations to which they have a personal connection, which isn't the case in Britain. Moreover, some say that British philanthropists operate in a more skeptical climate.

Motion points out that a recent story in

The Guardian

, a liberal newspaper, about Bill Gates's $750 million gift to fight childhood diseases was accompanied by a cartoon featuring one child telling another: "The idea is, we grow up healthy and buy his software." Said Motion: "There remains in this country a profoundly distrustful attitude that says, 'What's in it for the donors?'"


  Some academics, too, are reluctant to take on the task. "I have the British reserve -- I don't like asking people for money," says Peter Knight, vice-chancellor of Central England University, one of the universities without a development office. "The idea that we have a call center pestering people on the phone day and night, I find distasteful.".

Schools in Europe face similar challenges. The private business school INSEAD, with a campus outside Paris, launched its first capital campaign in 1995 and raised $143 million over five years, impressive by Europe's standards. However, about 80% of that money came from corporate sources, with the remainder from foundations and alumni. The school has started another campaign, the focus this time on boosting alumni giving. "This is not something that comes naturally to a lot of our alumni. People in continental Europe simply haven't been used to supporting education," says Ian Edwards, INSEAD's director of development.

By helping more universities start development offices, the British government might speed what everyone agrees is a long-term process. Boosting fund-raising involves time-consuming tasks, such as building alumni databases and cultivating relationships, as well as broader cultural change. Yet the real impetus for increasing giving, according to the universities that have started, comes from competition. In surveys ranking world universities, Britain remains well-represented -- but the top slots are dominated by rich American universities.

"Philanthropy buys excellence," said Mary Blair, an American who came from Johns Hopkins University to direct the development office at the London School of Economics. She says the reason why most Britons don't give is simply that most universities don't ask. "The more you start to, the more you change a public perception." One phone-a-thon at a time.

Carney reports for BusinessWeek Online from London

Edited by Beth Belton

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