17 August 2009
Endowments, particularly from alumni, are often bought up as a solution to the funding problem within universities. The inspiration is the multi-billion endowments seen at US universities, and several UK universities are trying to build up similar independent funds. However this drive is doomed to failure, mainly for the following reasons: In other words the university experience puts people off donating.

Lack of culture of charity

In the US, there is more of a culture of charity; this is reinforced by the relative ease at which donations can be dedicated from tax bills. Over there charity is helped because it is known that there is no alternative support beyond this charity, and hence donations are more ingrained into their culture.

In the UK the tax & benefits system provides fallback that is not present in the US, and the perception of being forced to support others results in resentment. This is not helped either by the (admittedly exaggerated) image of benefit cheats, or the often misdirected efforts at weeding them out.

I suspect the National Lottery has also damaged the image of good causes in general. These days lottery funds are more or less regarded as government money in all but name, as shown by the diversion of much of these funds to the 2012 Olympics.

Right rather than privilege

There is a tendency among UK home students to regard university education as a right rather than a privilege, and hence demand that someone else pay for it. When the most vocal people are those demanding free education, there is little desire to support them as a group.

Feeling of being short-changed

There is already a feeling among students that they are not getting value for money, which is partly due to the need of university departments to reduce the "unit cost" of teaching each student. This can appear as reduced contact hours, increased use of automated marking, smaller labs on the assumption that everyone has their own computer, PhD students doing teaching rather than dedicated teaching staff, and so on.

This feeling is particularly acute among overseas students; whereas home students it is more due to the shock of actually having to pay for education, overseas fees include a significant mark-up. Because this leaves overseas graduates with the feeling that they are treated as cash cows, they have minimal desire to give the university any more cash once they graduate.

Government offloading responsibility

Much of the drive for greater alumni support comes comes government "encouragement". Putting it mildly, this reeks of government wanting to offload responsibility; it reeks even more when you know that after years of letting inflation erode existing support, the government then decides to make significant cuts to grants. And that is even before considering the problems positive discrimination brings.

Unclear where money is actually going

In cases where alumni are charitable, they want a clear idea of where the money is actually going; the feeling being that money without strings attached will simply be used to plug whatever black hole is closest to defaulting. This problem is more acute at universities where different departments (and faculties) try to screw each other for whatever money is floating around. One typical hazard is when finance departments treat donations as payment-in-kind to be offset against.

Preference for targeted scholarships

I am aware of various alumni funds among overseas students, but their preference is to fund student directly rather than hand anything over to the university directly; at least then they know they are benefiting specific individuals. Such scholarships are also cases where a few people clearly benefit, whereas if the same money was put into an endowment pot the end result is hard to spot end even harder to audit.