Lesson from America

Universities should ask former students for money, according to a controversial study. Will anyone listen? asks Lucy Hodges
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Professor Eric Thomas's visit to the United States was almost a Damascene conversion. The boss of Bristol University went to see how American universities raise money from alumni, corporations and foundations to boost their coffers. He was heading a government task force charged with looking at how to change the culture in the United Kingdom so that endowments would grow and graduates would give to their former colleges.

Professor Eric Thomas's visit to the United States was almost a Damascene conversion. The boss of Bristol University went to see how American universities raise money from alumni, corporations and foundations to boost their coffers. He was heading a government task force charged with looking at how to change the culture in the United Kingdom so that endowments would grow and graduates would give to their former colleges.

What he saw blew him away. The complexity and sophistication of the American higher education system and its relationship with local communities, businesses, alumni and sports organisations opened his eyes to another way of doing things. His report, published last week ( see box, below right), contains lessons for British universities, particularly on the commitment that vice-chancellors need to show to make the fundraising revolution happen. "I came back from the States energised," Thomas says. "There is nothing more exciting or enlivening than to be in charge of your own destiny. What fundraising does is to put universities in charge of their own accelerator. You are making it all happen, and you are not so dependent on government."

Until now, British academics have been wary of fundraising, regarding it as somehow beneath them to be bothered with anything so vulgar as asking anyone other than the government for money. But the US not only has a strong culture of giving, it also has a strong culture of asking. The Thomas report recommends that British universities change their attitude - and ask their former students for money. If they did, they could bring in the same amount from individual donations, proportionately speaking, that the US universities do. That would produce £600m a year.

"Fundraising needs to be an essential part of the bloodstream of an institution," Thomas says. "It is not peripheral, but involves everyone. It needs to be embraced by staff as a legitimate part of their jobs at every level of the institution."

That, of course, means vice-chancellors as well as heads of department. All leaders of UK universities should visit the US to see how they do it, Thomas's report says. But, critically, all universities should have a properly run and funded office to compile databases and raise money from alumni, major donors, corporations and foundations. That is not the case at the moment - Reading University has only just set one up.

But some universities are making good progress with the help of Case Europe, an outfit specialising in university promotion and fundraising, which runs annual training courses for staff. "Things are changing here," says the vice-president of Case, Joanna Motion. "There are alumni who are giving large sums, such as the entrepreneur Gary Tanaka, who gave £27m to the new Imperial business school. These are transforming gifts. In addition, universities such as Newcastle are now managing to raise a lot of money from alumni."

Around half of British universities, 60 or so, have some kind of development office containing staff who are engaged in fundraising, according to Motion, and 25 of these have substantial operations. But the rest are doing very little.

Newcastle surprised itself last year by drumming up £250,000 through a telephone campaign. For the past five years the university has had an annual alumni "phonathon", which is growing at a rate of 20 to 25 per cent a year, according to Chris Cox, the director of development. Last year, it set up a new development council, chaired by Sir Terence Harrison, the former chief executive of Rolls-Royce, to try to attract gifts from major donors. The key to securing money is to engage donors in the right way, Cox says. It's important not to expect money to be donated at the first encounter. And it's vital to explain that universities need the money to do things better and to bring about necessary changes in society. Once people grasp that, any request for money is almost superfluous.

Over the years, Newcastle has been investing more in the business of fundraising and alumni relations. Now it puts in £500,000 a year. Six years ago, there were two-and-a-half staff members working on fundraising; now there are 12. Its latest target is to raise £20m over the next three years for scholarships, academic positions and capital development.

Another university that has begun to raise money is Sheffield. In 2002, the new vice-chancellor, Professor Bob Boucher, set up a development office. The university had done nothing for years. Now, it has a director of development, Miles Stevenson, and a team of seven staff. In the past two years, a total of £1.4m has been pledged.

Like Sheffield, Warwick University embraced the fundraising cause with the arrival of a new vice-chancellor, David VandeLinde. Before that, there had been no attempt to raise money from alumni. In 1997, there was the first telephone campaign, which has since grown by 30 to 40 per cent annually, according to Ron Gray, the development director, who was hired from America. The university now spends close to £1m on all its alumni and fundraising work, and has a staff of 25 for this.

All the experts say that fundraising is extremely hard work and takes a long time to bear fruit. You can cultivate a potential major donor for years before they decide to give a large sum. The task requires patience, investment and confidence. It is important to pay as much attention to small donors as large ones, because major donors start off by giving small amounts.

"It's about building relationships and sharing a concern for the institution," says Mary Blair, a member of the Thomas task force and the director of development and alumni relations at the London School of Economics. The LSE has one of the best developed fundraising enterprises in the UK, but it only really got off the ground five years ago, in 1999, because the former director, Professor Anthony Giddens, really cared about it. One of the LSE's best decisions was to invest heavily in a top-of-the-range database system, Blair says. The school now has 25 staff in London and five in New York. The fundraising operation costs just under £1m a year, but last year it raised £7m in cash and £12m in pledges.

University College London is also raising money in a big way. It plans a campaign to garner £500m, which it will announce in October this year. A total of £300m has already come in from foundations, says Alisdair Lockhart, the development director who was responsible for starting Bristol's fundraising in the early 1990s.

Bristol's enterprise has now entered a new phase with the appointment of an American, Tania Jane Rawlinson, to build up the alumni giving. She believes two things are essential in Britain: that we develop an asking culture; and that, as alumni, we regard giving as something to do with pride.

The above examples show how the position is changing, says Margaret Simon, the director of development at Birmingham University. "When I started out 10 years ago, people would say, 'Why should I give to my university?' Nowadays, you don't encounter that so often."

Since Birmingham's development office was launched two-and-a-half years ago, it has raised almost £5m. The target is £60m. "As time goes on, giving to the university will become much more accepted," Simon says. "That will make it a lot easier."


Professor Eric Thomas's task force recommends that:

* British universities need to start asking for money from former students. Asking is not un-British

* Everyone in the university should be involved. In the US, deans often spend 30 per cent of their time on securing funds

* All universities should have properly funded offices to raise money from alumni, corporations and foundations

* Universities should stay in touch with alumni throughout their lives

* A good alumni database is essential

* Universities should hold events for alumni - artistic events or gatherings to do with their subject or period at the university - to encourage loyalty and attract media attention

* Donors should be informed what has happened to their gifts

* Vice-chancellors should be committed to fundraising, as they are in America

* All heads of British universities should cross the Atlantic to see how the Americans do it

* The head of development should have direct access to the vice-chancellor LH