How can big donors help higher education?

The first report on large donations to higher education providers in China, The 2021 Report on Major Gifts Received by University Foundations in China, was officially released in Beijing last month.

“From a global perspective, large donations are an important method of supporting the development of higher education and an important carrier of wealth for good,” said Wang Zhenyao, former and founding president of China Global Philanthropy Institute.

CDB has identified a few trends from the report:

  • Large donations to colleges and universities increased over the past five years and reached 10 billion yuan ($1.58 billion) in 2020, with “Double First Class” colleges and universities favored

Based on public information such as the annual report of university foundations, the report builds an information database of large donations to universities, by adding up annual statistics of large donations from 2015 to 2020. Large donations are defined as project donations of more than 10 million yuan.

According to the statistics, 78 university foundations received large donations totalling 30.36 billion yuan between 2015 and 2020. And the total amount exceeded 10 billion yuan in 2020 — an increase of more than four times compared to 2015.

Over 100 large donation projects were launched in 2021, with the total amount of agreed donations approaching a record high of 20 billion yuan. Large donations to colleges and universities are on the rise, and college foundations have become the most common recipient of large donations.

The median large donation from 2015 to 2020 was 19.5 million yuan. Donation projects receiving more than 100 million yuan accounted for 15 percent of all 733 projects.

Among the 78 universities that have received large donations, 45 percent are part of China’s “Double First Class University Plan” list, receiving 69 percent of all the large donation projects and 84 percent of the total agreed donations. The plan is a tertiary education development initiative launched in 2015, which aims to comprehensively develop elite Chinese universities into world-class institutions by the end of 2050 through developing and strengthening their individual faculty departments.

Meanwhile, large donations have increased significantly for universities that are not on the “Double First Class” list — as the amount accounted for 23 percent of total donations in 2020 compared to almost nothing in 2015.

Colleges and universities in Beijing, Zhejiang, Guangdong, Shanghai, Hubei, and Fujian have undertaken major large donation projects. Among them, Beijing colleges and universities have attracted more than 15 billion yuan in the past five years — over half of the total amount received nationwide.

  • 26 percent of large donations to universities come from alumni

The report shows that 81 percent of large donation projects are funded by companies, corporate foundations, entrepreneurs, personal foundations, or a combination of the four; 53 percent of donations are made by private companies, while 49 percent are from businesses and entrepreneurs in the real estate, finance, and information technology service industries.

The report also shows that 188 large donations were made by alumni of the universities that are receiving the donations — accounting for 26 percent.

Seventy-two percent of the donated projects disclosed their purposes, and based on that information, the report divides the donations into 10 categories. “Faculty and Departmental Discipline Construction”, “Infrastructure Construction”, “Talent Construction”, “Scholarships Setup”, and “Innovation and Entrepreneurship” are the five major purposes of the donations.

  • Little public information on the management of large donation projects

Information disclosure is an important part of public welfare projects, and these projects from large donations are no exception. The report found that due to information disclosure restrictions, there was little publicly-available information on the management of these large donation projects in colleges and universities.

According to the report, 75 percent of the projects are disclosed on school or foundation websites, 68 percent of projects are disclosed in university foundations’ annual reports, and 16 percent of projects have their own websites.

Only 20 percent of the large donation projects include information about the long-term implementation plan for the sustainability of the projects, 6 percent of the large donations set up a special fund, and just 1.8 percent of the projects have established a special fund and retained the capital for sustainability.

“Donating money to Chinese universities enables education providers to carry out more training and improve discipline development. However, the question of whether the donations received by colleges and universities can fully play the role expected by society remains,” said Deng Guosheng, professor at the School of Public Administration of Tsinghua University.

Deng believes that the report provides an innovative perspective on how to increase the transparency of large donations. For example, it distinguishes between “actual donations” and “agreed donations”, and it also highlights research on the intentions and areas where the philanthropists’ donations flow to, breaking the stereotype of university donations only being used to pay bonuses and construct buildings.