Philanthropy and endowment money is becoming an increasingly important source of income for some of the UK’s leading universities, according to the president of one of the world’s top-ranking science research institutions.
Hugh Brady, who took up his post at Imperial College London in August, said that attitudes towards taking gifts from wealthy donors had “changed immeasurably” in the past decade.
Imperial was one of a number of institutions seeking to take advantage of growing interest from wealthy donors in ensuring the global competitiveness of British universities, Brady told the Financial Times.
“The high net-worth community and government are now much more willing to talk about it,” he said. “It allows us [Imperial] to compete with the very best in the world in a way we couldn’t if we had to rely on just the student contribution.”
The higher education sector is facing a funding squeeze as tuition fees, capped at about £9,250 since 2012 in England, decline in value due to high inflation, which stood at 10.7 per cent in November. Meanwhile, international research partnerships, such as Horizon Europe, hang in the balance following Brexit.
Several institutions, including the University of Liverpool, the Royal Academy of Music and Loughborough University, said they had increased their donations intake substantially, and that this would continue to be a priority over the next three years.
The University of Bristol, where Brady was vice-chancellor before joining Imperial, raised its philanthropic income by 219 per cent, from £9.1mn in 2017-18 to £29mn in 2021-22.
“We’re collectively thinking more creatively about how we can diversify our income,” said Andrew Monk, Bristol’s director of development and alumni relations.
However, with philanthropic income still representing only a tiny proportion of higher education funding overall, some educators say it is unlikely and undesirable that the sector will come to rely on donations.
“You’ve got a problem if you become dependent, that possibility would be abhorrent to most,” said Brady.
“We don’t have the century of tradition [of philanthropic giving] that the US has going back to the Carnegies, but . . . in the eight years I’ve been in the UK it’s changed immeasurably.”
Imperial said it had secured £55mn in donations in 2021/22, compared with £5mn in 2011-13.
“What it allows Imperial to do is offer a quality of student experience and a level of research output that wouldn’t have otherwise been possible,” Brady said.
Case-Ross, a research group that compiles data on fundraising, surveyed 95 UK institutions and found that sector-wide donations had stalled after a decade of steady growth up to 2016-17, partly because of the Covid-19 pandemic.
But the amount of new funding secured in 2020-21 was £1.14bn — up 5 per cent from the previous year. Average university investment into fundraising and alumni relations also increased slightly over the same period.
Brady pointed out that money from charitable organisations, alumni and wealthy donors often helps to attract further funding for particular research areas, creating a “leverage” effect that could help UK institutions compete with their US counterparts.
US institutions traditionally hold large endowments — funds that are comprised in part from donations and used to generate income — compared with British universities.
According to Case-Ross, 20 universities in the US hold more than $10bn in endowments. In the UK, only Oxford and Cambridge hold endowment funds of more than £1bn.
