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Section: Telephone and Direct Mail Fundraising

Question
What do you make of the Thomas Report on increasing voluntary giving to Higher Education?

Answer

Thomas Report on Increasing Voluntary Giving to Higher Education

The Thomas report was the result of a call in the 2003 White Paper on Higher Education for a taskforce to look at philanthropic giving to Higher Education in the UK. A press release is here while the full text of the report can be found in pdf format here.

My comments on the report are as follows:

  1. Perhaps the most important thing about this report, amidst a number of very positive recommendations, is that the report exists at all. I have long maintained that “Advancement” is all about Culture Change. The change of national culture represented by the commissioning of this report suggests that Philanthropic Support for Higher Education is on the national political and social agenda in a way that has not been seen for at least 60 years. This is most welcome.

  2. The report argues passionately that, as charitable institutions, Universities have an obligation to be fundraising in support of their aims, and that embarrassment and nervousness about fundraising needs to be overcome.

  3. The report notes that little is known about alumni attitudes towards support for Higher Education, and recommends a national survey be conducted. I think this would be an interesting exercise, but because of the very large number of variables involved, I am concerned that the scope be cast wide enough such that the data would be meaningful.

  4. Since much UK practice is modelled on US experience, the report explores the differences in attitudes towards philanthropy for Higher Education in the UK and the USA. The table below shows the stark contrast in between the two:

    For each 1,000 GDP

    Currency

    Given to charity

    Given to Higher Education

    USA

    $1,000

    $18

    $1.44

    UK

    £1,000

    £7

    £0.10

    In the UK the proportion given to education as a whole is so small that it does not appear in the main categories of charitable giving. The HE figure is thought to be around 1.5% of all giving. The statistics suggest that the US population is around 14 times more generous toward HE than the UK population.

  5. The authors highlight the difference between fundraising in major private US Universities - a world away from the UK experience - and the remarkably similar experience of US state universities. These institutions faced very similar challenges some 15 to 20 years ago to those now faced by UK Higher Education. The report argues that we have much to learn from latter, and recommends fundraising training for Vice Chancellors and other senior institutional leaders and for professional development staff. They note that those public Universities which have achieved significant success in this area are those who have been prepared to take a long view and to build up activity and the donor base over a period of time.

  6. The report identified three areas relating to change of culture in the institution.

    • Institutional Leadership
    • Lay Leadership and involvement (alumni and volunteers)
    • Investment in a professional Development Office

  7. The report highlights the difficulty for UK institutions in releasing enough of the Vice-Chancellor’s time for fundraising. It suggests that some of the models and structures for University leadership may need to change in order to accommodate the necessary change of role for the institutional leader. It also calls for far greater involvement of senior academic staff in building relationships with supporters. This was an area also highlighted by the Lambert review.

  8. The report places great emphasis on long term relationship building with alumni and other supporters; creating greater opportunity for alumni to be involved in the life and work of the University. This can be very challenging for a University used to its own methodology and structures for corporate governance and decision making. Universities are frequently uncomfortable with the idea of opening up these areas to external comment and criticism. Ways of honouring and incorporating this kind of volunteer involvement are urgently needed.

  9. The report underlines the importance of aiming toward a full service integrated development and alumni relations function. It suggests that a return of between 6 to 10 times investment should ultimately be achievable in a “steady state” fundraising operation.

  10. The report considers ways of incentivising voluntary giving, and the extent to the tax regime helps or hinders charitable giving. The report accepts that tax relief is low on the list of motivators for charitable giving, but notes that it has a significant effect on the size of gifts as opposed to the propensity to give. It also argues that for the majority of people the existing Gift Aid system, together with Payroll Giving and other incentives works well.

  11. The report argues for three significant changes in the tax system to encourage much larger gifts to be made by the small number of people who are able to be major donors. Firstly it recommends that an American style system be available for large cash gifts, whereby the gift is made “gross” and the donor receives all the tax relief. This would be a significant change from the existing rather complex Gift Aid system for Higher Rate tax payers. It would have the advantage to the major gift fundraiser of making the explanation of the tax relief very much simpler, although personally I have a degree of doubt about the extent to which this will make a big difference.

  12. Secondly, and in my view much more significantly, the report argues for a very significant extension of tax reliefs on gifts of assets. Adoption of these schemes could have an enormous impact by enabling people who have a substantial asset base to make large gifts tax effectively. It recommends that the existing tax relief on gifts of shares and real property be extended to all classes of asset, subject to a minimum value and a qualified appraisal of value. This would not be difficult to implement, has already been recommended by the Goodison review on support for Museums and the Arts, and is not complicated in legislative terms.

  13. Lastly it recommends the adoption of US style planned giving tools, allowing donors for the first time to give away assets but continue to enjoy some kind of benefit from them. This would be a radical departure for UK law, since currently if a donor continues to enjoy some benefit from a gift, then no part of the gift is regarded as charitable. This change could revolutionise the way in which major donors give, releasing huge asset based gifts. I believe its adoption could release a stream of gifts as significant as those currently given to other charities through legacies. Paradoxically it could slightly reduce legacy income since more assets would be likely to be given away during a donor’s lifetime. It would also give rise to a whole new skill set required by Major Gifts officers, that of understanding sophisticated financial instruments designed to enable this type of giving.

  14. This point leads nicely to the concluding area of the report: that of building institutional capacity to organise fundraising. The authors note that it requires a degree of commitment and risk for an institution to commit to fundraising, and suggests that for a limited period of time the government should match new investment in Development made by Universities. It even raises the question of whether the government should consider matching donations. I regard the former as a distinct likelihood; the latter as a pipe-dream. But 5 years ago I regarded tax relief on gifts of shares as a pipe dream, so maybe we will be surprised.

  15. In summary, the significance of this report can not be underestimated. It expresses at the highest level much of what many of us in Development have been saying for many years, and it gives Development staff a firm foundation upon which to argue for more investment and for institutional change to support the business of fundraising. Its long term impact now depends on the response of three constituencies: the Government itself through the Treasury, the Inland Revenue and the funding councils; University senior management and academic leadership, and professional Development staff.

Adrian Beney

19 May 2004

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