Matched funding scheme for voluntary giving 2008-2011

May 2008 | ref: Circular letter 11/2008

To:

Heads of HEFCE-funded further education colleges, Heads of HEFCE-funded higher education institutions

Dear Vice-Chancellor or Principal

1. On 3 April 2008 the Government launched its £200 million matched funding scheme for voluntary giving, following a Department of Innovation, Universities and Skills-led consultation last year. This letter outlines how HEFCE will implement the scheme.

2. The matched funding scheme for voluntary giving starts on 1 August 2008 and runs for three years. Funding is available to match eligible gifts raised by English higher education institutions (HEIs) and directly funded further education colleges (FECs). This scheme is the first of its kind in the UK and aims to achieve a step change in voluntary giving.

3. All HEIs and directly funded FECs in England can participate in the scheme.

4. Participation in the annual Ross-CASE Survey is a condition of entering the scheme.

5. The scheme will be administered by HEFCE, which will continue to work closely with institutions and sector bodies.

Consultation

6. In November 2007, 95 responses were received to the consultation from HEIs, FECs, sector organisations and donors. Additionally, a number of experts and groups were consulted. The resultant structure and rules for the final scheme are based on this advice and are outlined below.

Structure

7. The matched funding scheme will have three tiers, each with a different funding ratio and cap:

Tier 1	1:1 private to public: Intended for the least-experienced fundraising institutions and those looking to build capacity from a low base. Every £1 raised will be matched in full up to the level of any cap.
Tier 2	2:1 private to public: Intended for the majority of institutions with existing development programmes. Every £2 raised will be matched by £1 up to the level of any cap.
Tier 3	3:1 private to public: This is intended for the most experienced fundraisers. Every £3 raised will be matched by £1 up to the level of any cap.

8. HEIs will be able to request their own tier, with the exception of the Universities of Oxford and Cambridge which will be included in tier 3. All directly funded FECs wishing to participate in the scheme will automatically be included in tier 1.

9. Caps for each tier will not be set until it is known how many institutions have opted for each tier. The lowest cap will apply to for tier 1 and the highest cap to tier 3. Examples of illustrative caps, dependent on numbers opting for different tiers of the scheme, will be published on a dedicated page on the HEFCE web-site.

10. We intend to review the allocation of institutions to the tiers and the level of the caps at the end of the second year of operating the scheme. Any subsequent changes will then apply for the third year.

11. HEFCE will confirm each institution's tier and cap level prior to 1 August 2008, the start of the scheme.

Actions for institutions wishing to participate in the matched funding scheme for voluntary giving

12. Confirmation of participation in the matched funding scheme, and selection of tier, should be made via the HEFCE Extranet. Details and access codes for the HEFCE Extranet will be posted shortly to heads of institutions.

13. Institutions should assess what their institutions can achieve during the scheme, and consider any capacity-building training and workforce needs prior to selecting their preferred tier.

14. Institutions are requested to respond to HEFCE through the HEFCE Extranet by no later than 30 June 2008.

Eligibility

15. The following forms of giving are eligible for match funding:

actual gifts of cash
gifts of shares, with their cash value fixed on the value of the share at the date of donation
gifts from small/medium-sized charitable trusts and foundations (those with incomes of less than £60 million per annum)
gifts through HEIs' own non-consolidated development trusts
corporate gifts, where it fits within the above categories
overseas gifts, where it fits within the above categories
Gift Aid.

16. Legacies and gifts in kind will not be eligible for matching.

17. Subject to further guidance mentioned in paragraph 18 below, gifts from Research Trusts and foundations will be eligible if these are gifts, not contracts, and if they are not restricted for very specific purposes.

18. A sector-led advisory group on voluntary giving, including representatives from HEIs, the Council for Advancement and Support of Education, Ross Group, Universities UK and GuildHE will support HEFCE in administering the scheme. Further guidance and clarification on the scheme will be issued before commencement on 1 August 2008. In particular, we expect to issue further detailed guidance on the status of gifts from research trusts and foundations.

Matched funding

19. Matched funding will be paid annually in arrears. This means eligible gifts received in the year 1 August 2008 to 31 July 2009 will be matched in the year commencing 1 August 2009. The level of funding actually paid will depend on which tier an institution is in and will be up to the level of the cap for that tier.

20. We recognise that generating increased levels of voluntary giving will take time and will build up over the three years of the scheme. Payment of the £200 million available will therefore be lower in 2009-10 than in subsequent years as follows:

Year 1 = 15 per cent
Year 2 = 35 per cent
Year 3 = 50 per cent

For example: if £2 million were raised by an institution in Tier 2 (2:1 private to public ratio) with a cap of £1 million, HEFCE would pay grant of roughly £150,000, £350,000 and £500,000 over the following three years.

21. We may use a very small part of the £200 million to support capacity building and the promotion of voluntary giving.

22. Institutions will not be expected to meet a baseline threshold before matched funding is available. Therefore, all eligible gifts will qualify for matched funding up to the level of the cap.

23. Institutions have freedom to decide how match funding is spent.

Scheme progress

24. Details of the scheme and how it will operate, plus a list of frequently asked questions, will be published shortly on a dedicated page on the HEFCE web-site.

25. We will review how the scheme has progressed at the end of the second year of operation. This will be an opportunity for institutions to propose a change in tier. It will also allow us to revisit the level of the caps to ensure all the available funding is used and the scheme rewards the most successful institutions.

26. The 2006-07 Ross-CASE survey, which 122 institutions in England have recently completed, will provide a basis for assessing the aggregate level of voluntary giving across the sector. Subsequent survey results will be used to measure the levels of voluntary giving and amounts of match funding to be paid.

27. Completion of the Ross-CASE survey for 2007-08 and for subsequent years is a condition of grant for this scheme.

Yours sincerely

Professor David Eastwood
Chief Executive