UK Matched Funding Initiative Miles Stevenson Director of Development The University of Sheffield, United Kingdom 9 th March 2011

13/10/2015© The University of Sheffield / Department of Marketing and Communications I aim to cover … Incentivising donors Tax efficient giving Gift Aid The UK Matched Funding Pilot Scheme The UK Matched Funding Scheme

Why do people donate? © Miles Stevenson – all rights reserved

Why do people donate? Because they believe and share your vision To make a difference To get a result A sense of “family” and belonging Excellence/Pride A noble cause – transformation Putting something back “Immortality” Tradition and History A debt of honour © Miles Stevenson – all rights reserved

Why do people donate? Feeling very strongly about the cause A memorial to them (a little vanity) A memorial to loved ones A family tragedy No children Spite – Guilt Tax reasons Value for money – multiplier effect Because they are prompted to act © Miles Stevenson – all rights reserved

13/10/2015© The University of Sheffield / Department of Marketing and Communications 6 Tax Reasons Tax rates in the UK – at 20% and at 40% (salary above £43,000) If you make a charitable donation – and are a UK tax payer – and sign a declaration - the charity can claim Gift Aid.

13/10/2015© The University of Sheffield / Department of Marketing and Communications 7 Tax Reasons – Gift Aid Gift Aid increases donations by 25% If you earn £125, the tax man takes 20% - basic rate tax - and leaves you with £100 If you donate £100 to a charity, the taxman gives the £25 back to the charity as a “thank you”

13/10/2015© The University of Sheffield / Department of Marketing and Communications 8 Tax Reasons – Gift Aid For a higher rate tax payer the same rule applies but …. …the difference between the 40% tax and the 20% tax (i.e. 20%) goes back to the donor This is much more like the US system

Inheritance Tax Payable on estate of £325,000 or more, for the tax year 2009/2010 and rising in stages to over £350,000 or over in 2010/2011. It is at 40% It can be described as a “voluntary tax” – because you can leave it to charity. In the UK legacies to charities are free of Inheritance Tax © Miles Stevenson – all rights reserved

13/10/2015© The University of Sheffield / Department of Marketing and Communications The University of Sheffield Founded in 1905 The University of Sheffield has charitable status Exempt Charity X 1089

Value for money The project costs £60,000 But we can get a great discount So we need £25,000 If the donor gives £19,500 we can get £5,500 in Gift Aid And as he is a higher rate Tax payer it will only cost him £15,000! © Miles Stevenson – all rights reserved

13/10/2015© The University of Sheffield / Department of Marketing and Communications13/10/2015© The University of Sheffield / Department of Marketing and Communications A Steinway Grand Piano

13/10/2015© The University of Sheffield / Department of Marketing and Communications13/10/2015© The University of Sheffield / Department of Marketing and Communications Tony Blair Tuition fees brought in Expansion in numbers – aim for 50% Matched Funding Scheme …

13/10/2015© The University of Sheffield / Department of Marketing and Communications 14 Matched Funding Pilot The first scheme began in March 2006 Its aim was to “test the water” and to help build capacity amongst smaller operations – or to create offices in universities that had never had one It could be used for staff salaries, for training or for database and donor research

13/10/2015© The University of Sheffield / Department of Marketing and Communications 15 Matched Funding Pilot The sum involved was modest - £7.5 million The scheme ran - March 2006 to March 2009 It was administered by Universities UK (UUK) 27 English Higher Education institutions were involved – there was a competition The grants ranged from £87,000 to £375,000 Sheffield received £100,500 over 3 years

13/10/2015© The University of Sheffield / Department of Marketing and Communications 16 Matched Funding Pilot As a condition of the grant, the institutions involved had to match the grant with an investment of their own new money. They also had to commit to funding the whole sum in the future (i.e. this was only 50% pump- priming for an initial three year period). Sheffield used its funds to expand its telephone campaign. We were raising c. £80,000 p.a. and now we are raising £250,000 + p.a.

13/10/2015© The University of Sheffield / Department of Marketing and Communications 17 Matched Funding Pilot Notable successes included Bath $550,000 from an American alumnus Birkbeck£200,000 from a UK Trust Greenwich$13 million from the Bill and Melinda Gates Foundation Lancaster£755,000 for a Chair in Nuclear Engineering Leicester£800,000 from a major donor for a new Library Surrey£250,000 from a faith organisation

13/10/2015© The University of Sheffield / Department of Marketing and Communications13/10/2015© The University of Sheffield / Department of Marketing and Communications Expand the scheme

13/10/2015© The University of Sheffield / Department of Marketing and Communications 19 Matched Funding Scheme The new scheme was offered £200 million in government funds to match sums raised. It commenced on 1 August 2008 and is to last for a three year period It was the first scheme of its kind in the UK All directly funded English institutions could choose to participate – with conditions

13/10/2015© The University of Sheffield / Department of Marketing and Communications 20 Matched Funding Scheme Participation in the Ross-CASE Survey was a requirement - i.e. an annual completion of a detailed survey setting out fundraising costs and sums raised There was a concern that a few leading universities would seize all the funds. So there were to be three tiers with “caps” and different levels of match There were a variety a rules about what could be included and what was excluded

13/10/2015© The University of Sheffield / Department of Marketing and Communications 21 Matched Funding Scheme Only actual cash gifts would count Gifts had to be from individuals or from small/medium size charitable trusts and foundations – which donated up to £60 million p.a. Corporate giving would count Overseas giving would count Interestingly, Gift Aid would count Legacies, pledges and gifts in kind would not count

13/10/2015© The University of Sheffield / Department of Marketing and Communications 22 Matched Funding Scheme Tier 1 – a 1:1 match for HE institutions with the least experience of fundraising. With a cap of £200,000 i.e. if you raise £200,000 you will receive £200,000 Tier 2 – a 2:1 match for HE institutions trying to achieve a “step-change” in their fundraising activities. With a cap of £1,350,000 – so if you raise £2.7 million you will receive £1.35 million Tier 3 – a 3:1 match for HE institutions with a lot of experience in fundraising. With a cap of £2.75 million – so if you raise £8.25 million you will receive £2.75 million Payment would be made in arrears.

13/10/2015© The University of Sheffield / Department of Marketing and Communications New government

13/10/2015© The University of Sheffield / Department of Marketing and Communications 24 Matched Funding Scheme Participation in the Ross-CASE Survey was a requirement - i.e. an annual completion of a detailed survey setting out fundraising costs and sums raised. There was a concern that a few leading universities would seize all the funds. So there were to be three tiers with “caps” and different levels of match. There were a variety a rules about what could be included and what was excluded.

13/10/2015© The University of Sheffield / Department of Marketing and Communications13/10/2015© The University of Sheffield / Department of Marketing and Communications CASE-Ross Survey of UK University Philanthropy

13/10/2015© The University of Sheffield / Department of Marketing and Communications Thoughts  It has incentivised some donors (e.g. big ones)  It doesn’t provide the initial spark to give  The universities can decide where the match goes – but donors do have an interest in this!  Each university is using the match very differently  Some universities have found it easy to meet their targets – others are finding it harder … but there is still a year to go  Economics mean that it is unlikely for the scheme to be repeated in the short-term – but a new initiative of a £50 million sum is being proposed for the Arts

13/10/2015© The University of Sheffield / Department of Marketing and Communications Training

Discussion and Questions