University funding by the UK's top 100 foundations: English imperialism but science rules

If you want to get a measure of British philanthropy, or are interested in UK charitable giving, a good starting place is the Association of Charitable Foundations (ACF).

The ACF is the membership association for foundations and grant-making charities in the UK. It matters because it represents the interests of around 400 member institutions which, collectively, hold assets of around £67bn and give – according to its research - over £2.9bn annually. So the insights it shares on the character and patterns of UK foundation philanthropy are well worth a read.

Giving trends

One of its research outputs which catches our eye is its Giving Trends index of the UK’s top 300 foundations which provides a picture of giving among the UK’s leading philanthropic, family and corporate foundations. The Giving Trends index of the top 300 foundations is important because, ACF claims, they contribute two-fifths (42 percent) of the total amount of grant spending carried out through all UK charitable foundations.

Research into the top 300 are an important measure of charitable foundation giving, but it represents less than half of such giving which, ACF estimates, is £6.5 billion. Where are the others you may ask? Well, philanthropic giving is notoriously fragmented and getting a complete handle on all foundations is extraordinarily difficult. But we can safely assume that the balance of foundations which are giving away the other 58 percent of charitable foundations comprise smaller foundations, family foundations (i.e. individuals who have set up some form of family trust to channel their charitable giving) and foundations attached to, or associated with, a business.

The ACF defines the top 300 foundations as charitable grant-makers that:

• derive income from almost entirely private, philanthropic sources (including endowments)

• devote more than half of their charitable spending to making grants

• are principally grant-making and not operating or providing direct services

• are set up with a principal purpose of making grants to unrelated organisations or individuals, and do not support a single institution/ beneficiary or cause; and

• are largest by value of grants.

So the top 300 does not include funders that are ostensibly funded in one form or another by government. One example of this is the National Lottery Community Fund which is not included in the index.

In truth the sums of giving by the 300 philanthropic foundations as a percentage of overall charitable giving are modest. In 2017/8 it was estimated that there was around £20.3bn in charitable giving. ACF estimates that the top 300 foundations make up around 14.3 percent of that total (£2.9bn). Individual giving (including major donors) make up around 63 percent of all UK charitable donations. 13.7 percent of charitable donations (£2.8bn) are made through legacies and the balance is made up through the government’s taxpayer gift aid scheme and corporate donations.

But if you work on the assumption that the UK’s “universe of charitable foundations” (as the ACF coins it) includes the top 300 philanthropic foundations, the plethora of smaller family foundations and company foundations, then they collectively account for 32 percent of all British charitable giving.

Punching above their weight

The important thing about the top 300 foundations is that they are influential, and often set the tone and pattern of giving, drawing attention to causes and geographies which might otherwise be overlooked or forgotten. The ACF says they “punch above their weight” suggesting their “independence means they can take risks, back marginalised causes, work with diverse partners, meet immediate needs, evade the short-termism of political cycles and support long-term solutions.”

“The top 300 foundations are influential because they set the tone and pattern of philanthropic giving.”

The other interesting point ACF makes is that family and personal foundations represent just over half (53%) of the Top 300 giving by value. It also comments that the arrival of new family foundations on the scene points to the attractiveness of establishing charitable foundations for individuals to channel their philanthropy. This brings us back to the point we have made many times before in this blog, which is that growth in philanthropy is driven by the remarkable growth in high net worth wealth.

So when it comes to university philanthropy – and who is giving where – the patterns and behaviours of the top 300 foundations is an important indicator. We researched the giving of the ACF top 300 foundations, looking primarily at which organisations were funding universities and higher education institutions outside the UK. This is the second year we have undertaken this study, so we now have a pattern building of international university philanthropy by the UK’s leading charitable foundations.

Perhaps the first observation to make is that the top 300 index is a very stable list. There is, according to ACF, around 10-11 percent churn each year. As it happens a couple of smaller foundations that were reported to give to international universities in the previous year’s index were not in the top 100 in 2019. They are the Michael Hintze Family Foundation and the Said Foundation. On balance, we identified 20 out of the top 100 2019 index gave to non-UK universities compared with 19 in the 2018 index. In other words 20 percent of the top 100 foundations give to international universities.

According to our study of Britain’s top 100 grant-giving foundations and trusts, as listed in the ACF’s Giving Trends 2019 reveals that 188 non-UK universities have received £400.9m over the past six years.

Wellcome dominance

British foundation funding to international universities is dominated by the UK’s largest foundation, The Wellcome Trust. It dwarfs all the other foundations by the scale of its endowment and annual net disbursements. According to our study, it has given £206.4m (51% of all international funding to non-UK universities) to 140 non-UK universities over the past six years.

“When the top UK foundations fund universities internationally, support to science and/or medical research is the primary motivation for their philanthropy.”

Wellcome sets the pace when it comes to international university philanthropy, and doing so in quite a unique fashion. As we have reported before, African institutions are the largest beneficiaries of Wellcome’s international university giving. This makes the Wellcome Trust really unique, compared to other very large foundations which have a very strong bias to giving to North American or European universities. Moreover, five out of the top 10 Wellcome beneficiaries over the past six years are African universities – in Kenya, Mali, South Africa and Uganda – reflecting the significance attached, it seems, by the Wellcome Trust to funding African science and research.

Another important observation to make is that when the top UK foundations fund universities internationally, science and/or medical research is the primary reason for that philanthropy.

But where Wellcome leads, others follow. Funding from the top 100 foundations to international universities has steadily increased over the past six years. In 2014, £43.4m was shared between 51 universities; by 2019, that figure was £56.1m shared between 73 non-UK universities.

Rise and decline

However, this rise in the number of universities receiving funding is tempered by the fact that overall disbursements have declined notably in 2019 (£56.1m) compared to the previous two years (2018: £79.4m; 2017: £99.0m), the number of non-UK universities receiving funding is at its highest, pointing to the increased internationalisation of UK university philanthropy.

The decline in non-UK university giving over the past three years reflects a reported decline in giving by the ACF in its 2019 Giving Trends, which the association attributes to “tensions in international trade, UK economic uncertainty due to the decision to leave the EU, and the destabilising effect of global politics”.

Taken as a collective, North America is the preferred region for the UK’s top foundations university giving (37.7%), followed by Africa (18.5%) and Europe (16.7%). The fact that North America (read United States) is the main beneficiary of university philanthropy is as predictable as night follows day and confirms the pattern of transatlantic philanthropic flows. And it should come as no surprise that English language universities are the main beneficiaries of higher education philanthropy.

English imperialism?

“English language universities are the main beneficiaries of higher education philanthropy. ”

As the American academic Philip Altbach explains “Academic superpowers like the US and the UK have ensured that English is the predominant academic and scientific language and that the curricula are dictated by trends there. While this has created a global academic environment with a common medium of communication, it has been at the cost of other national languages and research topics of local importance.” It also appears to give the upper hand to institutions that function in English when appealing for funding.

US universities receive the largest amount of UK university philanthropy. According to our study, the top foundations awarded:

• £146.6m between 45 American universities.

• Australian universities are next: 10 institutions received £40.4m.

• Nine South African universities received £34.3m (8.5%)

• 10 universities in Eire received £29.0m (7.2%) putting it in fourth place.

63 percent of UK university philanthropy lands in those four countries. Against this backdrop, it would be reasonable to assume that university philanthropy geared to European institutions is flatlining or in decline.

Brexit remorse?

However, a curious pattern characterises the years since the Brexit referendum in 2016 - a marked rise in funding for European universities. In 2014, 10 European universities received £4.1m – and they were mostly recipients of Wellcome funding. By 2019, 19 European universities shared £14.5m in funding. Moreover, Europe is also the home to the largest number of institutions receiving UK philanthropy. Between 2014-19, 49 European universities shared £66.8m. The high point of philanthropy to European universities was 2017 when 21 institutions received £24.8m. Did the generosity of leading foundations reflect a sense of collective remorse among donors?

The preferred destinations for European-targeted university philanthropy are:

1. Ireland

2. Belgium

3. Germany

4. France

5. Netherlands

The top five funders of non-UK universities are:

1. Wellcome Trust (£206.4m)

2. Arcadia Fund (£53.2m)

3. Children’s Investment Fund Foundation (£35.4m)

4. Aga Khan Foundation (£26.3m)

5. AKO Foundation (£22.5m)

The top five recipients of the philanthropy disbursed by the leading UK foundations are:

1. Monash University, Australia (£33.9m – funded by Wellcome)

2. Yale University, United States (£27.2m – funded primarily by Arcadia)

3. University of Pennsylvania, United States (£21.7m – funded primarily by AKO Foundation)

4. Aga Khan University. Pakistan (£24.3m – funded by the Aga Khan Foundation)

5. University of Cape Town (£19.2m – multiple sources)

So those are the headlines of university philanthropy by the UK’s leading foundations. It doesn’t compare to the scale of philanthropy by the leading US foundations, nor does it match the amounts given out to universities by foundations and trusts in America. But there is a clear trend towards internationalisation of university philanthropy. And the thing to remember, given that the foundation “universe” is so fractured in the UK, the figure of £400.9m disbursed by the top 100 is just one significant – but incomplete - indicator of giving to non-UK universities.

How did we undertake this research?

The purpose of our research was to identify giving to non-UK universities by the UK’s biggest grant-giving foundations and trusts. UniversityPhilanthropy.com and The Cape Partnership drew on the Association of Charitable Foundation’s Giving Trends 2019 as a basis for the research.

Data over the past six years used to compile this study is available at the website of the charity regulator, the Charity Commission for England and Wales, and the Office of the Scottish Charity Regulator.

The Charity Commission for England and Wales and the Office of the Scottish Charity Regulator are non-ministerial government departments that regulate registered charities in Great Britain. All registered charitable foundations and trusts are required to file annual reports annually.

While every effort has been made to ensure the accuracy of this data, it does not necessarily represent a complete picture of giving by leading charitable foundations and trusts.

The overall financial data reported is a conservative figure. While most of the top 100 UK charitable foundations and trusts disclose disbursements, there are a number that do not report grants made. The desk research was conducted in November 2020.