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The Ross-CASE Survey 2016 - What We Said in Our Webinar

Recently my GG+A colleagues and I presented our analysis of this year’s Ross-CASE survey.

Its publication is always an eagerly awaited event for UK university fundraisers, particularly for those who have access to the full data set and want to see how their institution is performing compared to select peers! But there is also a wealth of insight to be gained from looking at the top-level data, and now that we have 10 years’ worth of results, it is beginning to be possible to make some confident predictions about the future of university fundraising in the UK.

This is the first in a series of three blogs we’ll be presenting, covering everything we discussed in our webinar. Today, we’re going to look at big picture trends.

The Top Line

The following figures will be familiar to anyone who has read the full report:

  • – The total amount of philanthropic income secured in new funds (cash plus future commitments secured in the year) reached £860.9 million in 2014–15, an 8 percent increase from 2013–14
  • – Total cash income (cash received in the year, including payments against commitments made in previous years) was £756.7 million in 2014–15, an increase of 14 percent since 2013–14
  • – Individuals and organisations contributed 53 percent and 47 percent towards cash income, respectively
  • – Investment in fundraising increased by 10.5 percent and alumni relations investments by 7 percent
  • – 55 institutions secured more than £1 million in total cash income received in 2014–15, a 15 percent increase from 2012–13.

Altogether a very healthy picture, and as I showed in a previous post, UK university fundraising has managed to outgrow both the UK charity sector and university fundraising in the United States over the past 10 years, achieving an excellent compound annual growth rate of 9.5 percent:

Ross-CASE graph 1

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Where is UK universities’ fundraising now, compared to the US?

One of the joys of working at GG+A is the wealth of global comparative data we have, going back decades. The chart below shows 40 years’ worth of data from the Voluntary Support of Education Survey, the US equivalent of the Ross-CASE. The blue line shows private institutions, and the red public universities. UK universities’ fundraising total of £861m puts us round about the 1982 mark in terms of total sector income. Or, if you just count public universities, around 1992:

Click image to enlarge graph

Click image to enlarge graph

No surprise here. University fundraising in the UK, though very active in the 19th century and early half of the 20th century, fell into abeyance in the mid-1950s. Only a few UK institutions had restarted by the mid to late 1980s (those of you interested in the historical UK picture should read our distinguished former  GG+A colleague Bill Squires’ excellent ‘University Fundraising in Britain – A Transatlantic Partnership’).

In fact, we at GG+A would argue that this data offers some very encouraging pointers for UK university leaders:

  • – Over the 40-year period shown here, US public universities achieved compound annual growth of 10 percent per year, comparable to that being achieved now in the UK.
  • – This suggests that if the UK sector maintains its current trajectory, philanthropic income could exceed £2B by 2025, £5B by 2035, and £13B by 2045. We are playing a long game here towards incredibly significant success for the sector.
  • – The data also shows the resilience of higher education fundraising to recessionary shocks. Despite significant troughs in the early 2000s (the bursting of the dot com bubble) and 2010 (the global financial crisis) philanthropic income has generally rebounded within no more than 2-3 years.

 

 What is currently driving growth in UK universities’ fundraising?

elephant-in-the-room

 

First, let’s acknowledge that ever since the Ross-CASE Survey began, gifts to Oxford and Cambridge have accounted for around half the philanthropic income received by UK universities. Some might argue that it has been the extraordinary success of these two institutions, both of whom have successfully completed £1B campaigns, that is largely responsible for the 10-year growth we are seeing.

But this doesn’t appear to be the case. In this year’s survey Oxbridge accounts for 44 percent of new funds and cash, down from 51 percent in 2006-7. In fact, comparing the 10-year compound growth rates with and without Oxbridge shows that other universities have been growing at a slightly faster rate than the big two:

Ross CASE 2

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The following are the key factors:

Extraordinary leadership and financial commitment to advancement

The mean investment in advancement (both fundraising and alumni relations) is 0.4 percent of institutional expenditure. That’s equivalent to less than ½ p for every £1 spent institutionally.

Institutions that are investing at or near this level, classed as ‘moderate’ or ‘established’ in the survey, are seeing excellent results. The philanthropic income they receive represents between 1.9 percent and 3.6 percent of institutional expenditure – a return of up to nine to one. Institutions investing below the mean (‘emerging’ and ‘fragile’) are doing much less well, with a return of less than two to one.

The institutions classed as ‘elite’ in the survey (acknowledged to be Oxford and Cambridge) are investing more than four times the mean level, at 1.7 percent of institutional expenditure.  They are seeing a return of nearly ten to one – and their philanthropic income can be expressed as 16 percent of overall institutional expenditure.

We suggest the survey data shows the importance of institutional leaders looking, not so much at hard budgetary numbers for advancement, but at what proportion of institutional expenditure they are prepared to invest in this area.

Big ideas and big gifts

University fundraising’s great strength is its focus on major gifts. Typically 95 percent of philanthropic income received by universities from individuals comes from just 5 percent or so of donors. The institutions that are successful in major gifts fundraising are presenting donors with big, compelling opportunities to invest in the future of their institutions.

Dramatic increase in professional staff and budget support for advancement

In our next blog in this series of three we will look at this in more detail. Suffice to say here that the survey results suggest that university fundraisers do not work most effectively in very small teams. The larger the advancement team a university is able to commit to, the better results it will see from those team members.

A developing institutional culture of philanthropy

All of this adds up to what we can call an institutional culture of philanthropy.

Our 50 years of experience helping institutions grow in this area tell us that, without exception, developing and embedding a culture of philanthropy must first start internally. It is characterized by the following key drivers, which we are seeing operating above in the institutions enjoying the most success:

  • – Extraordinary leadership and commitment to invest from institutional leaders
  • – Broad engagement of deans, programme directors, and selected academic partners in the fundraising process
  • – An integrated approach to alumni relations, annual giving, and major gifts – recognising the long-term value of activity that is not immediately income generating
  • – Commitment to providing extraordinary stewardship experiences for major donors (and indeed donors at all levels)
  • – Social proof – creating a culture of philanthropy is best supported by exposing prospective donors to exemplar donors (colleagues and friends) who share a commitment to that institution, and who have themselves made gifts

Thank you for reading. In Part 2 we will look more deeply at the survey results, and see what the cluster data in particular can tell us about pointers for success.

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About the author

Adrian Salmon

Vice President

Adrian Salmon, Vice President, GG+A Europe, joined the firm in April 2015. He brings nearly 20 years of direct-marketing fundraising experience in the higher education, arts and culture, and wider not-for-profit spheres. His particular expertise includes direct mail fundraising, annual giving program management, and management of contributions from integrated mail…