STUDENT FINANCE: Finding new gold for the ivory towers

ALISON EADIE

Universities have of necessity become hard-nosed commercial enterprises over recent years rather than just places of academic endeavour. The government squeeze on higher education has forced universities to turn to fund-raising to plug the gap between conventional income and rising needs.

The change of culture has not been easy for some. Bill Squire, Cambridge University's first development director, jokes that when he arrived in 1988 no-one was sure whether he should be shown the front door or the tradesman's entrance.

However, Cambridge and many others have cottoned on quickly to ways of milking both alumni and corporate givers.

Begging letters, requests for tax-efficient covenants, fund-raising by phone, Business Expansion Scheme (when available) to fund student accommodation, and credit cards affiliated to the alma mater are all part of the fund- raiser's armoury.

Bank of Scotland, market leader in affinity credit cards, runs cards for 28 places of higher learning, including long-established universities such as St Andrew's, Manchester and Birmingham and former polytechnics such as the University of Central Lancashire.

More than pounds 500,000 has been generated for universities on BoS cards since the launch of its first for Aberdeen University five years ago. The university receives an initial payment of pounds 7.50 per card in three stages - pounds 2.50 when the card is taken out, pounds 2.50 after 8 months and pounds 2.50 after 20 months.

It then receives 25p for every pounds 100 spent on the card over a 10-year contract.

Before asking alumni for money it is necessary to create a relationship with them or they feel no obligation, says Mr Squire. Cambridge did this through CAM magazine largely written by alumni to interest and inform the rest.

Cambridge has urged famous old boys to persuade people to part with their money: Clive Anderson, chat show host and occasional barrister and Martin Sorrell, chief executive of WFP advertising group, have been wheeled out to front fund-raising efforts.

Telephone calling has been used to good effect. Cambridge was one of the first to use present-day students to phone its alumni. A letter of warning came a few days before the call allowing those who did not want to be called a chance to say so. Mr Squire says the telephone has proved four-times as effective as mailing.

Cambridge is now looking at licensing its coat of arms to derive a royalty stream from its use on consumer paraphernalia. The marque has been registered in the UK, US and Japan.

Individual and business benefactors are of huge significance. Wolfson and Robinson colleges and the Judge Institute at Cambridge bear the names of those who endowed them. On the corporate front scientific and medical charities such as the Wellcome Foundation and Cancer Research are big donors to Cambridge. BP helps support the chemistry department and Hitachi and Toshiba give to the Cavendish research programme. Corporate giving is not pure philanthropy as the companies benefit from scientific discoveries.

Mr Squire points out that Cambridge University has to compete at an international level with universities for the best people. The facilities have to be good enough to attract the top academics, who in turn attract the best students. Cambridge, whose biochemists are still working in pre-war broom cupboards according to Mr Squire, has set itself a 10-year target of raising pounds 250m, pounds 50m from within the university, by the year 2000. So far it has pounds 159m, including the internal contribution.

Universities have to play to their strengths. Cambridge has an international reputation, but some of the newer universities offering more vocational courses have close links with local businesses.

The University of Central Lancashire, in Preston, uses its credit card less as a means of raising revenue than as a way of maintaining links with alumni. Very little of its income comes from alumni donations. More important is its commercial company Centralan Consultants Limited, which sells consultancy and runs short courses for a local and national business customer base.

Whatever the method, most institutions of higher education are finding ways of supplementing traditional sources of income.