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Dear Vice-Chancellor or Principal

1.   This letter provides an update on the matched funding scheme for voluntary giving after its first two years of operation.

Background

2.   HEFCE announced the £200 million, three-year matched funding scheme for voluntary giving to universities and colleges in 'Matched funding scheme for voluntary giving 2008-2011' (HEFCE Circular letter 11/2008).

3.   The scheme is the first of its kind in the UK and aims to facilitate a step-change in voluntary giving in the sector. It started in August 2008 and is now at the end of the second year of payments (matched funding is paid annually in arrears). Further details about the scheme and how it operates can be found on the HEFCE web-site.

4.   Circular letter 11/2008 signalled a review of the allocation of universities and colleges to tiers at the end of the second year and this letter fulfils that obligation.

Participating institutions and impact

5.   All higher education institutions (HEIs) and directly funded further education colleges (FECs) in England were eligible to take part in the scheme, subject to participation in the annual Ross-CASE survey.

6.   A total of 137 institutions chose to participate in the scheme including 16 further education colleges.

7.   The annual returns to HEFCE by participating HEIs and directly funded FECs show that over the first two years of the scheme more than £313 million in matchable philanthropic income was raised in total. This is particularly encouraging in the present financial climate and at a time when other areas of philanthropic giving are under pressure.

8.   This has resulted in £22 million in matched funding being paid in respect of claims for 2008-09 and £61 million in matched funding being paid for claims for 2009-10see note 1.

9.   The December 2010 grant letter from the Department for Business, Innovation and Skills confirmed funding of £115 million for the final year, but this will now be available across the academic year to July 2012.

Tier allocation

10.   The matched funding scheme has three tiers, each with a different funding ratio and cap, as shown in the table below.

TierType of institutionRatio private: public fundingMatched funding cap
1 With little or no funding experience 1:1 £200,000
2 With existing development programmes 2:1 £1,350,000
3 The most experienced fundraisers 3:1 £2,750,000

11.   Institutions selected the tier most appropriate to their experience, with the exception of the Universities of Oxford and Cambridge, which were included in tier 3, and participating directly funded FECs which were automatically allocated to tier 1.

12.   Twenty-four HEIs, from all three tiers, reached their tier funding cap in the first two years of the scheme: six in the first year and 18 more in the second year. A number of others are showing clear potential to reach their allocated tier cap in the third and final year of the scheme but at this point it is not clear how many.

13.   We cannot therefore predict with certainty how much scope there may be to allow participating institutions to move up a tier and whether the funding available is sufficient to meet all the liabilities that might arise. Consequently, we are unable to agree to allow participating institutions to move up a tier after the second year of the scheme.

14.   Instead, in early 2012, we intend to consider the success of those institutions that have reached their cap, when final payments against the scheme have been made to institutions and a clear position is known on the remaining funds available. This will allow us to ensure that the scheme rewards those institutions that have been the most successful at achieving the intended step-change in eligible fundraising.

15.   We will continue to not permit downwards movement between tiers.

Support role of CASE Europe

16.   Since December 2008 CASE Europe has been delivering, on HEFCE's behalf, an extensive three-year programme of support for the institutions taking part in the matched funding scheme.

17.   The programmes on offer address the varying needs of development operations including start-up offices in FECs and certain HEIs, small development teams in specialist HEIs, and the well-established offices of Russell Group and 1994 Group universities.

18.   To date, 85 per cent of institutions taking part in the scheme have benefited from CASE Europe training. All of the programmes and other CASE Europe events and programmes of support available for those institutions participating in the matched funding scheme are supported by the dedicated online resource centre.

19.   We are particularly pleased with the success of the CASE Europe Graduate Trainee programme, now in its second year, with a total of 14 trainees having been selected over the two years for employment in the fundraising departments of eight host universities and a further eight co-host partner institutions.

20.   The second Vice-Chancellors' Conference will take place on 23 March 2011 in London. It will be co-hosted by CASE Europe and Universities UK and chaired by Joanna Motion, CASE Vice-President for International Operations. The conference will debate the nature of British philanthropy and its role in supporting higher education. Speakers include Professor Eric Thomas, Vice-Chancellor of the University of Bristol, and Lord Robert Winston.

Audit of the scheme

21.   PricewaterhouseCoopers audited the first year's data returns for the scheme (2008-09), with 10 participating institutions being selected. When the audit's outcomes are finalised, good practice following from the audit will be posted on the HEFCE web-site. Audits of data returns for the second year (2009-10) will be carried out later in 2011 and in good time for lessons learned to be made available ahead of the data submission deadline for the third year (2010-11) in October 2011.

Yours sincerely

Sir Alan Langlands
Chief Executive


Note

  1. £2 million out of the £200 million total is meeting the costs of capacity building and other related support activities.

Date: 9 March 2011

Ref: Circular letter 08/2011

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

Of interest to those
responsible for:

Finance directors and directors of development

Enquiries should be directed to:

Fiona MacMillan, tel 0117 931 7039, e-mail f.macmillan@hefce.ac.uk

Sophie Melton-Bradley, tel 0117 931 7148, e-mail s.melton-bradley@hefce.ac.uk