Fundraising complexities for Higher Education in South Africa: a case study of the University of KwaZulu-Natal.

Abstract

Higher education institutions in South Africa are challenged by rising costs that outrun available revenue. With inflation, reduction of state subsidies and the recent student #FeesMustFall campaign, universities are finding it increasingly difficult to retain their academic credibility, research outputs and core infrastructure maintenance in the face of declining funds. Without substantial and reliable funding, they have no option but to source third stream income, primarily from corporates, trusts, alumni and other philanthropic donors. This takes place in a highly competitive environment as South African university fundraisers compete locally and internationally for funding opportunities. The aim of this study was to gain a better understanding of the fundraising complexities for higher education in South Africa, in particular, via a case study examination of how the University of KwaZulu-Natal (UKZN), through its fundraising office, managed its stakeholders towards generating a third stream of income. The objectives for the study were to investigate the status quo of UKZN’s donor groupings and their donor sentiments in relation to UKZN; to examine how the UKZN Foundation managed stakeholder engagement with its donor community; and to develop a conceptual model of best practice for donor management in a university environment. A qualitative research methodology was adopted whereby an on-line questionnaire was sent to individual, corporate and philanthropic trust donees (external sample of 30 with 19 responses); as well as face-to-face interviews being conducted with UKZN Foundation fundraising staff (internal focus group of five with four responses). Knowledge gained through the study uncovered insights and facilitated a better understanding of the highly competitive environment of higher education third stream fundraising. The study revealed the importance of stakeholder engagement. In terms of donor sentiment towards UKZN, donors indicated they wanted to be heard, they wanted feedback, they needed an inspirational cause and they liked to feel connected to a project. Stakeholder engagement was hindered internally by a low fundraising culture throughout the university, low staff morale within the UKZN Foundation and projects that were not strategically aligned to UKZN`s broader vision. External hindrances included a damaged UKZN brand owing to student violence and the #FeesMustFall protests, and a sluggish economy. A model of best practice for donor management was presented that focuses on building donor stewardship, enhancing the university’s reputation, growing the fundraising investment of the institutional leadership, and optimising the fundraising competencies of Foundation staff. A key recommendation is that the leadership and staff of the UKZN Foundation draft a fundraising strategy document in consultation with key internal and external stakeholders. This document should promote positive donor stewardship as the cornerstone to successful fundraising. The primary benefit of introducing a fundraiser and stakeholder management strategy is to encourage the institution to examine its own competitive positioning, including the status quo of its current stakeholder relationships, their strengths and weaknesses and ultimately, the institution’s overall level of philanthropic fundraising success.