Attracting and effectively using philanthropy requires a level of strategic sophistication and professionalism that has been absent until recently in many countries, such as Australia and the UK. This means universities need to be more sophisticated in the way they use donations, not just using them to fill in budget holes. They need to use it to transform.

They also need to employ more and better staff, and have more effective systems and processes in place.

Around one-third of the research budgets of the US’s leading universities come from philanthropic gifts. The impact of these donations is greater than their financial scale would imply. Philanthropic giving, for example, funds longer-term, more adventurous research, and is especially important for younger, less well-established researchers.

It is also impactful. According to one estimate, 47 Nobel science prize winners have had significant funding from Rockefeller philanthropy in one form or another. Philanthropy has also massively improved the teaching and accommodation facilities for students.

One thing for universities to be wary of is the potential dangers posed by the hidden agendas of some philanthropists.The pursuit of smaller donations can also pose difficulties, with the use of wealth identification services infringing the privacy of alumni. There is the reputational danger for some universities being seen as constantly badgering alumni for funds.

Read the full article about philanthropy in universities by Mark Dodgson at The Conversation.