University Revenue Diversification through Philanthropy: International Perspectives

Higher education throughout the world faces the dilemma of reconciling its clearly increasing importance—to individuals and nations alike—with its steeply rising costs that almost everywhere seem to be outpacing the ability of government to meet with tax revenue alone. The immediate result in many countries is increasing institutional austerity manifested by overcrowding, demoralization and outright loss of faculty, deterioration of physical plants, and in some cases artificial limitations on capacity (and thus on higher educational opportunities). To most observers, a major part of the solution must lie in revenue diversification via faculty and institutional entrepreneurship, shifting more cost burden onto parents and students, and philanthropy. However, while philanthropy in theory is a most attractive “solution”—particularly when one considers the fund-raising success of US higher education, including the US public higher educational sector—successful higher educational philanthropy requires wealth, favorable tax policies, institutional support, time, and the all-important culture of giving. This culture requires an acceptance not merely of the inability or unwillingness of governments to shoulder the entire cost burden (which inability or unwillingness can conceivably be overcome politically), but of the very appropriateness of a comprehensive (and desirably less politicized) policy of cost sharing that includes reasonable tuition fees as well as the cultivation of philanthropic obligations. In the end, philanthropy must play an increasing role in higher educational finance in virtually all countries. However, the role of philanthropy in securing the overall financial health of higher education will remain—for most institutions in most countries—only importantly complementary. My presentation on university revenue diversification through philanthropy does not emerge from any particular expertise as a higher education fundraiser. As president of a US public college for nine years, which was just beginning serious efforts in fundraising, and later as chancellor of the largest university system in the nation, I have done a bit of fundraising, and attempted to create the kind of administrative support that facilitates additional revenues through philanthropy. However, my contribution to this topic, for whatever this may be, emerges from my work not as the head of a university or a university system but as a scholar of international comparative higher education finance and management—and of the political and ideological climates that are driving—and resisting--revenue diversification throughout the world. It is from this larger and more theoretical perspective, rather than any particular technical expertise, that I wish to ∗ D. Bruce Johnstone is University Professor of Higher and Comparative Education, Director of the Center for Comparative and Global Studies in Education, and Director of the International Comparative Higher Education Finance and Accessibility Project at the State University of New York at Buffalo. This address was given at the annual meeting of the International Conference on Higher Education (ICHE) in Luxembourg, August 26-28, 2004.