American-Style Donations

Universities Discover Fundraising

Studiernde im Masterstudiengang 'Energieeffiezientes Planen und Bauen' bei Arbeiten am Architekturmodell zum Solar Decathlon 2015 im Technischen Zentrum der Technischen Universitaet Muenchen ; Foto: © Astrid Eckert / TU Muenchen; Verwendung frei fuer die Berichterstattung ueber die TU Muenchen unter Nennung des Copyrights
Architecture students at the Technical University of Munich, where fundraising has become an important part of the administration's work.
  • Why it matters

    Why it matters

    German universities complain they don’t have enough funding to attract the best and brightest teaching staff.

  • Facts

    Facts

    • More Germany universities are focusing on fundraising, asking wealthy alumni and other donors for charitable gifts.
    • This clashes with the common perception that there’s no American-style donor culture in German higher education.
    • The Technical University in Munich, the Goethe University in Frankfurt, the Karlsruhe Institute of Technology and the RWTH Aachen technical university are among the most successful fundraisers.
  • Audio

    Audio

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Two weeks ago, the University of Mannheim announced that Hans-Peter Wild, an entrepreneur who owns the beverage brand Capri-Sonne, had donated €1 million to celebrate his 75th birthday.

It’s not the first time that Mr. Wild, who comes from the region but lives in Switzerland, has donated money to his alma mater. A few years ago, he donated half a million euros to help the university attract outstanding scientists.

The gift highlights a common problem at German universities: Many complain that they don’t have enough funding to offer internationally-competitive teaching positions.

That’s why an increasing number of universities are asking for charitable gifts, going against the common perception there’s no American-style donor culture in German higher education.

“I have never seen companies donating money for purely altruistic reasons - with no expectation of something in return.”

Fundraising expert

“You don‘t hear this excuse anymore,” said Michael Hartmer, managing director of the German association of universities.

Nearly all universities have realized that soliciting donations, passed off as “fundraising” in German, taps into new sources of money. But according to industry experts, only a few players go about this professionally. The Technical University in Munich, the Goethe University in Frankfurt, the Karlsruhe Institute of Technology and the RWTH Aachen technical university are the market leaders, said one experienced fundraiser.

There’s also a history of partnerships with companies, a practice that still leaves many in Germany uneasy. Joint contracts between companies and universities, financing professorships or enter into research partnerships, are controversial because of their secrecy. Equally controversial is the sponsoring of rooms, which is all the rage at technical colleges these days: Corporate logos are on display, hanging from doors and sometimes in lecture rooms.

But this has nothing to do with “donating” in its original sense. That is, giving without expecting anything in return.

More than two-thirds of universities now have a fundraising department, Mr. Hartmer estimates, but only a few technical colleges. The department is called “private university funding” at the Goethe University in Frankfurt, which has been a foundation university since 2008. Donations now exceed sponsoring at the university, said Andreas Eckel, who heads the fundraising department. In 2014, the centenary of the university, private individuals and foundations donated a total of €71 million.

Companies are less likely to make purely charitable donations. “I have never seen companies donating money for purely altruistic reasons – with no expectation of something in return,” said a fundraiser with many years of experience.

Donations are becoming more important for universities in part because basic financing by the states is not keeping up with the increasing number of students. In Mannheim, buildings have been restructured and the international curriculum has been enhanced thanks to donations in the double-digit millions.

“But donations should not be a replacement for state funding, they should complement it,” said Wolfgang-Uwe Friedrich, president of the University of Hildesheim.

Inheritances are also playing an increasing role. Mr. Friedrich already knows of a bequest stated in the will of an IT entrepreneur: It concerns real estate property and returns from corporate profits, which one day will go to the university.

Since 2002, Hildesheim has been a foundation university, but it has not yet succeeded in accumulating capital, which is also a problem elsewhere. The head of fundraising at the university in Frankfurt, Mr. Eckel, said that returns on capital were “comparatively small.” Universities specializing in technical subjects apparently do better, even if they are not foundation universities themselves. But some of them do have university foundations today.

Initial financing for completely new centers or specialist faculties is no longer unusual, either. With the help of donors, the Hildesheim University was able to establish new IT courses of study years ago.

“Nowadays the state of Lower Saxony finances these university places,” said University President Mr. Friedrich. And in 2015 the Klaus Tschira foundation donated €25 million for a new research center at the Technical University in Munich.

In Germany, the best-known examples of such projects are the Hasso-Plattner-Institute in Potsdam, near Berlin and the former Kühne School of Logistics in Hamburg. They ended quite differently, though. Whereas the Hasso-Plattner-Institute, financed entirely by the foundation of the joint founder of SAP, could be upgraded from a research facility of the Potsdam University to a faculty – a first for Germany – the logistics center of the Kühne foundation and the Technical University Hamburg-Harburg no longer exists as such. It has become the independent, private university KLU.

Mr. Plattner, the joint founder of SAP, is not the only one making these kinds of contributions. In 2008 his former colleague Hans-Werner Hector and his wife Josefine donated a fund to the university in Karlsruhe (now the Karlsruhe Institute of Technology), which makes a few million euros available every year to attract particularly good scientists. The overall sum is like donations typically seen in America: €200 million.

If Germany hopes to become more competitive internationally, they can only hope that Mr. Hector’s big gift won’t be the last.

 

Stefani Hergert reports on education for Handelsblatt. To contact the author: hergert@handelsblatt.com

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