30th July 2018Tamsin Haigh
Fundraising Growth Falters at UK Universities – Is it a Dip or a Decline?
Our Perspective on The Ross-Case Survey 2018
The Ross-CASE Survey of Charitable Giving to Universities 2018 is a review of the fundraising and alumni relations operations of over 100 higher education institutions. It is run by CASE Europe and now in its 15th year.
This year’s Ross-CASE Survey considers the year 2016-17. For the first time in 5 years, the survey has found a decline of 6.5% in the median total of ‘new funds secured’ per university in comparison to the previous year. Is this a momentary dip, or the sign of something bigger?
Why look at ‘new funds secured’?
New funds secured is the term used by CASE to cover new cash gifts and new confirmed pledges, even if the income has not yet been received. This reflects the way that fundraisers tend to manage their own targets and measures of fundraising success.
Why the median?
Development in the UK higher education sector shows staggering variation, with the two universities at the top, constituting CASE’s ‘Elite’ group, raising around 750 times more, and spending around 95 times more, based on the mean for each cluster, than universities who are just starting out in development. We are interested in trends across the wider sector and, for this reason, we have chosen to focus on the median – the universities sitting right in the middle of the pack. Figures referencing the ‘average’ below refer to the median, rather than the mean, unless otherwise specified.
So there has been a small decline, but isn’t the sector is growing?
It is – at least it has been for many years. The average university is now raising nearly £900,000 more than 10 years ago. The sector as a whole is now raising £300 million more each year than it was a decade ago. New funds secured – for each university and the total across the sector – has shown incredible growth in the last decade.
Nonetheless, as the graph above shows, this growth has not been without its bumps. The most recent Ross-CASE survey reports a decline of 6.5% in median new funds secured – the first decrease since 2011-12, which is also mirrored by a decline of 7.5% in total new funds secured across the sector – the first decrease since 2012-13.
While fluctuation in new funds secured can be expected if we are considering total new funds (which is often skewed by exceptional donations to one of the elite institutions and has shown changes of up to 23% over the last decade), it is a more complicated picture if we consider the median – that is, what is happening for the average university in the sector.
New funds secured for the average university has shown tremendous variation over the past decade – growing nearly 75% some years and declining by almost 50% others. This could be the result of the changes in the Ross-CASE sample over the years – some universities fill in the survey one year, and not the next. This is coupled with the fact that, as more universities start fundraising, and start to fill in their Ross-CASE survey, there will be more universities joining the lower end of the pack.
However, any decrease in the median is worth considering – particularly when also coupled with a decline in new funds secured across the sector as a whole – to see if we can find any hints of something bigger at play.
So what happened? Perhaps universities are spending less on fundraising?
It doesn’t appear so. The sector as a whole is now spending nearly 90% more on fundraising than it was ten years ago.
Median fundraising costs have gone up and down over the past six years (for which data is available). Interestingly, however, we have seen an increase of 38.5% in median spending between 2015-16 and 2016-17 – the largest increase for at least 5 years. This brings the average spend up from £385,000 in 2015-16 to over £533,00 in 2016-17.
Perhaps donors are giving less?
There are various factors affecting the industry at the moment, for which we do not yet understand the impact – reduced public funding and the increased demands on our country’s biggest funders, concerns around the impact of new data protection legislation on prospecting and communications (particularly as it relates to our existing individual donors), and the economic uncertainties of leaving the EU, with an inevitable effect on many of those philanthropists and funders whose giving capacity is inextricably tied to the nature of our ‘Brexit’. Despite this sense of uncertainty, there are a few things we can learn from the data provided by CASE Europe over the past three years.
- Giving from non-alumni individuals stopped growing: Between 2014-15 and 2015-16 non-alumni individual giving increased by an impressive 75%, yet we have seen a decrease, albeit a small one, of 3% in giving from this group between 2015-16 and 2016-17.
- Giving from alumni continued to grow, if a little slower Giving from alumni, however, did increase by 11% in the period – although slower than growth in the previous year (25%).
- Trust and Foundations giving started to grow again There is a more positive picture among trusts and foundations, and corporates. While 2014-15 to 2015-16 saw a decrease in funding from trusts of 4%, 2015-16 to 2016-17 has seen a healthy increase of nearly 14%.
- Corporate giving continued to show strong growth Donations from companies over the same period show a very positive picture – with an increase of 17% between 2014-15 and 2015-16, and another increase of 36% between 2015-16 and 2016-17.
Should we be worried?
Not overly. We have seen big dips before. Between 2010-11 and 2011-12, new funds secured dropped by a staggering 47%, a possible result of the rise in tuition fees brought in near the end of 2012 and the debate surrounding the build-up.
It is possible that the sector is reaching a plateau, although impossible to tell from one year of data, but it is unlikely we are facing a decline.
CEO World reported in 2018 that US development continues to grow, with donations to colleges and universities reaching $43.6 billion in 2017, a 6% increase on the previous year (http://ceoworld.biz/2018/02/09/20-us-universities-that-raised-the-most-money-in-2017/). With UK tending, so far, to mirror the growth of the US (if several years later), it is unlikely that the UK has reached fundraising capacity.
Nonetheless, there are a couple reasons why we might face a plateau over the coming years:
- We could be seeing a shift in the way that universities fundraise – as competition for traditional funders has increased across the charity sector, and with uncertainties around our economic future and new data protection legislation, this could present an opportunity to invest in new types of fundraising and to refresh tired approaches.
- A large number of universities have started fundraising over the past decade, and continued to invest since. We have been through a period of impressive growth. It may be that the sector is starting to stabilise and will, in time, reach a steady state of growth.
What can universities take away from this?
Take some time to have a look at your own data and see if it reflects the trends in the sector.
- Did you feel a slight crunch in 2016-17 and what might have caused it for you? Did fewer asks results in a ‘yes’? Did you struggle to recruit the right team? Did you have to divert your team members to other issues, like preparing for GDPR? What can you, as a team, learn from this in the future?
- Have you seen a decline in donations from non-alumni individuals, like others in the sector? Did you lose individual donors somewhere between 2016 and 2017? Did you postpone your annual fund campaign? Did you stop contacting people for fear of new regulations? Is there a way you can recoup these individuals now?
- Have you seen an increase in company giving at your university, like many others? Is there a way that you too can take advantage of new growth in this area?
- Are you ready for the future? Have you diversified your funding streams, or do you have a plan to do so, to make sure you can withstand fluctuations in the future?
You can read the full Ross-CASE Survey of Charitable Giving to Universities 2018, as well as past reports, here: https://www.case.org/Samples_Research_and_Tools/Benchmarking_and_Research/Surveys_and_Studies/Ross-CASE_Survey/Ross-CASE_2018_Report.html
If you have seen sluggish growth in your organisation, are worried about the results of your giving programme, or are just not sure if you are moving in the right direction, get in touch and we’ll see if we can help.
This blog was produced using aggregate data provided by CASE, as well as findings from the back catalogue of Ross-CASE reports (accessible here: https://www.case.org/Samples_Research_and_Tools/Benchmarking_and_Research/Surveys_and_Studies/Ross-CASE_Survey/Ross-CASE_2018_Report.html). We have endeavoured to ensure accuracy of the analysis above; however, this is written as a discussion piece only and we cannot be held responsible for any errors or omissions in findings, methodology or interpretation, or any decisions you make on the basis of this post.