President's Blog

Philanthropy in higher ed in the U.S. and Spain

IMG_3427Many thanks to the president of Universitat Politècnica de Valencia, Francisco Mora, for the invitation to keynote his conference on philanthropy in Spanish universities.  UPV is a young, public, research university, which has achieved a great deal in Spain in a mere four decades (yes, it felt pretty familiar!).

They have had great success setting up so-called “cátedras de empresa” or business-sponsored “chairs”, which may help fund anything from student internships, to research, or other types of academic initiatives.  The university is working hard to set up even more of them and is exploring new avenues to tap philanthropic and corporate dollars at a time of shrinking public support (as I said, a very familiar context!).

UPV also has a great example of innovation neighborhood (CPI, pictured here) which I believe could be a good model for our plans in Fairfax and Prince William to further develop ties with business and cultivate the creation of new ones.

Below I summarize some of my main talking points at the conference.  If you speak Spanish, I recommend two blog posts by UPV’s Carlos Ripoll (this and this), which include some of my slides and a very insightful analysis.

  • American research universities would not be the cornerstone of American innovation and economic competitiveness that they are if it weren’t for the influx of private money.
  • While Spain and the U.S. make a comparable tax-supported investment in higher education (1.14% of GDP vs. 1.36%), Spanish universities receive significantly less private money.  In total, Spanish universities spend about $12K per student annually, while their American counterparts spend $27K.
  • The influx of private dollars in American universities via tuition and private philanthropy in a much less regulated environment (it may be hard to believe but American universities are relatively less regulated) is a big reason why American universities dominate the top tier in international rankings. It is also the cause of a great deal of anxiety related to access, inequality and student debt.
  • Spanish universities are underfunded relative to American universities and very much over-regulated. The advantage is that costs are kept low and access is not an issue. But the system fails to place any university among the world’s elite, which I argue, is key to 21st century innovation and competitiveness.
  • Private donations to higher education have doubled in the last 25 years in the U.S. (in inflation adjusted terms).  Most of that money comes from individuals (alumni or not) and foundations, with only 14.3% coming from businesses (Spain’s only, even if modest, source).
  • Private donations in the U.S. are not evenly distributed. Instead, they follow a consistent rich-get-richer pattern, with the universities with the largest endowments also receiving more new gifts than any one else.  This may indicate a possible first mover advantage for Spanish institutions that organize themselves for fundraising first.
  • Spanish donors give only 0.05% of GDP to charities every year.  That compares with 1.44% of GDP in the U.S. (the first in the world).  This is often cited as a reason not to try to work the philanthropic route in Spain.  I have always wondered if a well organized fundraising effort could not help build up Spanish giving culture.  My hypothesis is that Spain may not just lack a culture of giving but a culture of asking.
  • My summary of a systematic approach to philanthropic fundraising can be summarize with the acronym CASH: Cultivate, Analyze, Solicit, Honor.