Ten universities receive increase in donor funds - R2.31-billion in a year - but disparities persist

26 Nov 2023

The annual Survey of Philanthropy in Higher Education finds that there has been an increase in donor income for participating universities, but disparities in donor funding between traditional and non-traditional universities persist.

Providing infrastructure, student funding and much-needed teaching and learning materials are part of the work performed by universities from generated philanthropy funds, according to annual Survey of Philanthropy in Higher Education.

The study, which was commissioned by the nonprofit trust Inyathelo (South African Institute for Advancement) has revealed a significant increase in philanthropy funding.

This is its eighth Annual Survey of Philanthropy in Higher Education (ASPIHE), which used data covering the 2020 calendar year. The first survey report was issued in 2013.

According to the 72-page report, the latest study was undertaken by independent consultants commissioned by Inyathelo on behalf and in the interest of 10 participating universities: Durban University of Technology, Tshwane University of Technology, University of Cape Town, University of the Free State, University of Johannesburg, University of KwaZulu-Natal, University of Pretoria, University of Stellenbosch, University of the Western Cape and University of the Witwatersrand.

For the 2020 period, the report stated that infrastructure was awarded more (40%), followed by student funding (29%), teaching and learning (12%), community engagement (8%), research (7%), other initiatives (3%) and unencumbered or other financial liabilities (1%).

Inyathelo acting executive director Feryal Domingo said in the report that the Covid-19 pandemic placed enormous pressure on universities.

Before the first report, Domingo said, such information was sparse and scattered. “Few universities collected comprehensive data on this kind of funding and its costs, for internal purposes, and no reliable national perspective existed.”

Details

The study reveals that total philanthropic income reported by the 10 universities for 2020 was R2.31-billion, a significant increase on 2019 (R1.55-billion).

“The mean income per institution was R231-million, again much higher than R155-million in 2019,” Domingo wrote.

When Sector Education and Training Authority (Seta) funding is also included, philanthropic income totalled R2.66-billion in 2020 – yet another increase on the previous two years of R1.94-billion and R1.91-billion respectively.

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Setas are responsible for supporting and overseeing skills development and training within South African industry sectors.

“This income received from Setas was initially excluded from ASPIHE research, as some advancement offices [at universities] view philanthropic income generation as their sole preserve and do not work with Setas.

“However, incomes of universities improve when Seta funding is added to the mix, and some universities, particularly those which offer diplomas and degrees oriented to vocational work, tend to be more successful at attracting this form of income,” Domingo wrote.

Domingo stated that the 2020 increase in total philanthropic support can partly be attributed to fluctuations in the value of the rand and its impact on income from abroad.

It could also be attributed to greater support of universities by South African and international philanthropic organisations and individuals during the Covid-19 pandemic.

“Income escalation can also be attributed to universities investing in professional fundraising, alumni relations and support staff,” she wrote.

The numbers suggested that the more an institution spent on attracting philanthropic income, the higher such income was.

Domingo said these findings on philanthropic support for higher education institutions, based upon robust investigation and thoughtful interpretation, enable universities to better understand the intricacies of donor motivation and to plan accordingly.

Funding

Since philanthropic income was recorded in 2013, the report states that the total has grown from R659-million to R2.31-billion in 2020.

“Universities have over time improved their systems for recording and administering this income and through that benefited from the growth in donor and grant funding available to universities,” the report read.

The highest amount of philanthropic support received by a single institution in 2020 was R766-million and the lowest was R8.5-million.

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The report says there are indications that some universities are growing their philanthropic income streams and that their fundraising machinery continues to improve its effectiveness.

“The disparities in the Covid-19-linked financial support might explain the lower reported median,” the report read.

Donations

The total income of R2.31-billion for 2020 (excluding Seta income), the report states, shows a measurably high increase from 2013. It was “distributed across 11,244 donors, while the total income for 2019 was distributed across 12 554 donors”.

This meant there were fewer donors but they gave significantly more.

Relative to 2013, the report states that there is just under a threefold increase in the number of donors from 2013 (4,355).

The distribution of income from local versus international sources used to be nearly even when this was first assessed in 2013.

“Following this, in 2016, this even pattern changed with the bulk of support coming from local donors, representing 56% total donor income during that year.”

This trend continued in 2017 (72% and 28% respectively for national and international sources), and for subsequent years, up until 2019, at 69% and 31%.

“What is significant is that for the 2020 reporting period, the distribution has reverted to the original pattern where it was again more evenly spread,” the report reads.

It says national philanthropy is keeping up with international giving.

“What is critical though is that relative to international, the national total in rands being very high, signals well-endowed domestic philanthropic vehicles. Thus, the identification of the characteristics of the domestic sources of philanthropy can serve as a basis for discussion that includes the most effective way to stimulate and in certain instances also incentivise local giving.”

The report adds that it is worthwhile to note that there were significant contributions from national donors for the Covid-19 response, relief efforts and medical research interventions.

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The sectors that supported the 10 universities for 2020 include trusts and foundations, which contributed much more (50%) than the private sector (26%) for the 2020 period.

“The support from the private sector decreased from 38% in 2019 and 30% in 2018 but is still much higher than the 14% reported in 2013.”

Generally, according to the report, the higher contribution from international trusts and foundations is again reflected in the sector analysis of philanthropic income for 2020.

The trusts and foundations sector representation was dominant in 2020, as it was in 2013 when it was reported to have contributed 61% of the total philanthropic income of the participating universities.

Significantly, the reasons for a higher representation in 2020 (compared with 2019) might be explained by the mitigating efforts arising from the Covid-19 pandemic.

“In light of this, the trend of giving was towards emergency funds for personal protective equipment, medical research and with the rapid shift towards digital technology [and] much-needed support for learning devices.”

Disparities

The largest single donation received by one institution in 2020 was about R390-million. The lowest total donor income for the year 2020 was R8.4-million (up from R2.7-million in 2013) and the highest was R781-million (up from R181-million in 2013 and R413-million in 2019).

The survey results had, since 2013, “pointed out the extreme inequality in philanthropy income across the sample of universities that participated over the years”.

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Traditional universities attracted the vast bulk of philanthropic resources, which had been the pattern since 2013.

“The top five philanthropic income earning institutions are still all traditional universities. All the traditional universities together in 2020 received 99% of the total donor income, with the non-traditional universities sharing the rest (1%),” the report read.

The report did not disclose the top five institutions.

The stark inequality in the donor income totals between traditional and non-traditional universities has been persistent and the gap is growing.

In 2019, the report states, non-traditional universities garnered 4% of the donor income.

“Previous reports have pointed to deep and complex historical, political and structural factors that continue to disadvantage most institutions that are not classified as traditional by the South African Department of Higher Education,” the report reads. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R29.

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