Transparency in University Fundraising

An improbable causal effect of the Arab uprising brings to light the shortcomings of UK universities’ ability to communicate transparently and raise money through alumni giving.

Few people would have thought that the protests in the Middle East would have such a detrimental effect on how universities and higher education institutions in Europe think about where their next round of funding will come from.

But that is what happened earlier this year when Sir Howard Davies resigned as director of the London School of Economics amid revelations of a £1.5 million donation from the Gaddafi International Charity, as well as allegations of plagiarism by the Libyan dictator’s son, Saif Gaddafi.

So, how does a prestigious institution maintain its funding while keeping its reputation intact? There are two solutions to this dilemma. The first, a short-term fix that should be implemented immediately by those institutions who feel concerned, is to communicate more transparently to avoid finding themselves in the middle of a political scandal. The second, a long-term solution, is for institutions to find alternative sources of funding and thus avoid the need to solicit financial contributions from benefactors who can be linked, however remotely, to autocratic regimes and the like.

In the short term then, institutions should consider acting upon any apprehensions they may have about potential scandal-inducing deals and anticipate further potential embarrassment by making public all pledges for large amounts, as well as disclosing any questionable donations made in the past.

In the long term, the reliance on these kinds of gifts should make way for smaller but more frequent donations from alumni. This is the case in the US where top business schools such as Dartmouth’s Tuck School of Business report alumni giving for their MBA programmes at 67 percent, followed by Stanford at 41 percent and Yale at 46 percent.

On the other hand, at Europe’s top business schools, the figures are significantly lower. The alumni giving rate at the London School of Business for example is 14 percent, while at INSEAD and IE the figure is as low as 12 percent.

Last week it was revealed that the French bank Societe General had received and managed $1.8bn of Libyan Investment Authority money. Since then, there have been international calls for banks to be forced to make public disclosures of assets they hold on behalf of states. The same should be applied to higher education institutions; transparency in funding would ensure that no ill-gotten money is received and at the same time force institutions to kick-start a new dynamic of alumni giving, that in Europe, could eventually equal that of the United States’.

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Noir sur Blanc is an international communications agency specializing in higher education. Based in Paris and serving the higher ed community for over 20 years, with offices all over the world, the New York office opened in Spring 2010. Noir Sur Blanc USA is the official blog from the Noir sur Blanc New York office. Follow-us to stay informed on hot topics and trends in higher education.
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