Challenge grants as forms of Philanthropy Partnerships

Two case studies from UCT

Max PriceVice-Chancellor

1. The Gordon Institute for Performing and Creative Arts

• GIPCA – long gestation in discussion with key donor – Sir Donald Gordon – who ideally wanted to fund an opera house. Eventually agreed to an institute with capital and endowment components.

• Intention was challenge grant for R50m – i.e. would match what was raised. Project cost was R100m

• After 4 years, nothing raised other than University's own contributions (which did not count toward the challenge). DGF terminated the challenge/donation.

• DGF did grant R2.5m for 5 years operating costs.

GIPCA – What went wrong?

• Performing and creative Arts are hardest to raise funds

• Particularly for an endowment• Funds raised for operations did not count• UCT contributions did not count

Note different purposes of donor challenges– to demonstrate recipient commitment– to promote philanthropy

GIPCA – What went wrong?• UCT Fund-raising efforts possibly inadequate– Project champion/director – delays and

competency mix – 3 in 5 years• OTOH– Fund raising literature– Annual appeals– VC personal effortsYet consistency and relative priority compromise

GIPCA – What went wrong?

• Attitude of potential donors to someone else’s project– Particularly if named– If huge inequality in size of donations

• Unknown total means harder to sell vision

2. Kresge Challenge for Research Summer School

• Summer School in survey methods offered for 10 years free to SA participants – very successful.

• Funded by Mellon• Had relied on annual fundraising – not

sustainable long term, and always uncertain how many participants could be funded

• Decided to create endowment of $1,5m

Kresge case study Challenge strategy

• Kresge Foundation agreed to a challenge grant of $750,000: all-or-none, with 3-year cut-off date.

• Target of additional sources – institutions that had benefited directly– alumni of the programme– those who potentially would benefit directly by

guaranteeing them free access to the course for specified number of participants and a seat at the table

• Other foundations – including legacy grants

Kresge case studyMatched funds raised

• Mellon $335,000• Ford $200,000• 7 Universities each contributed $10,000, an 8th

$20,000• Stats SA contributed $150,000 (informed by

the costs to them of x students over 10 years) • 1 Individual alumnus, but was redirected since

target was met.

Lessons from Kresge case• Value of strong champions (Murray Leibrandt and

Francis Wilson)• Marketable product with financial opportunity costs

and proven track record• Door openers – in government• Offering Universities “a seat at the table” and value

from money in terms of direct benefits (3 students)• Value for money in that their notional fees are 10% of

real costs’, i.e. donation is matched by 10-fold funding• Deadline focuses efforts and urgency

Lessons from Kresge contd.Disappointments/weaknesses

• Disappointment that no alumni gave – still very hard in SA

• Disappointment that amount from universities lower than expected ($100,000)

• Would not have succeeded absent Ford and Mellon legacy grants (themselves unusual!)