A Broken Model or Misunderstood? The “Charitable” Higher Education Model

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Breaking or broken, it’s evident that the financial model of universities in the UK isn’t working. In fact, the sector is in such a state that outside of a surplus of injected cash (we’re talking millions), interjection will need to occur. And while a topic so well debated in the sector and government, we wonder if perhaps, some of the basics have been overlooked.  

Prompted by a recent Times article Charity cases: Why UK universities are really going broke (Martin Mills)which call for the need for institutions, who are essentially non-for-profits, to be supported by profit-making activity, it made us think about more critically about the model itself.  

It might come as a surprise for some, given the constant financial debates and the focus and urgency of institutions to “make money” that universities are in fact non-for-profits (or “charitable”). But over the last few decades, policy changes on universities, particularly regarding their financial stability and cultural orientation, has seen a shift towards treating students as consumers (who have choice) and universities as commercial entities. This has forced the sector to move to a more market-driven approach.  

But we pose the questions: Do universities primarily exist to provide education and conduct research? Have we veered away from recognising other benefits that universities provide that contribute to the public good such as promoting social mobility, contributing to the well-being of society and providing skills into the local economy? Have universities lost sight of the model and it’s a case of going back to basics and understanding the how to make it work?  

We agree with Mills that reversing this trend will need imagination, creativity, and effort from universities, along with a reaffirmed belief in the central goal of universities. To that end we’ve outlined below a few ideas that universities could look toward engaging to support profit-making activities as part of their charitable model.   

 ·         Diversification of Revenue Streams. We believe that universities must diversify their revenue streams to survive. For example, engaging in commercial activities like offering professional development programs, consulting services, or licensing intellectual property, or investment in other income-generating assets.  

 ·         Strategic Use of Resources: We believe a more ‘holistic’ look at the campus and optimising existing real estate can offer plenty of opportunities for universities in generating additional revenue. For example, renting out facilities for events or leasing unused space. 

 ·         Partnerships: We believe partnerships can provide huge strategic benefits – yet we don’t see this enough across the sector.  Universities could collaborate with private companies on research projects, technology, or sponsored research agreements. These partnerships can provide funding while also advancing the university’s research goals. 

·         Philanthropic Support: While not directly profit-making, philanthropic donations can play a significant role in supporting universities. For example, seeking donations from alumni, foundations, corporations, and other benefactors to fund scholarships, research initiatives, and infrastructure development. 

We know that universities need to do more. To support universities and help them operate less as commercial entities with a higher probably of financial success, our UNIAssess tool has been developed.  

 To find out more contact admin@cajagroup.com