The record donation of £100 million to the University of Cambridge by David Harding is a recent example.
The purposes for which funds are raised is obviously diverse, ranging from donations like Mr Harding's, which is to provide scholarships for PhD students, to donations for significant capital projects.
The range of prospective donors is also wide, including alumni, trusts and foundations, high net worth individuals and corporates.
What a particular donor is looking for from the relationship they establish with a university via their donation will differ from person to person. While a high net worth individual may wish to support a purpose which aligns closely with their own interests and values, a corporate donor may be looking for more in return for their donation, including recognition and publicity.
Because of the range and variety of different relationships that a university may form with its donors, a range of legal and other risks should be considered in relation to fundraising, not least the potential damage to a university's reputation that may be caused by association with donors whose own reputation is adversely affected. From that perspective, there is an important governance aspect to a university's approach to fundraising.
Given the ultimate responsibility of a university's governing body for all aspects of its operations, a clear statement of the university's policy in relation to the acceptance and refusal of donations is important to ensure that all members of university staff have a clear understanding of the university's approach.
A policy should be formulated by the governing body in light of its assessment of the university's strategic aims and objectives but it should take into account that, as a charity, a university is obliged to accept all donations made to it unless it would either be unlawful to do so or would be detrimental to the university achieving its charitable educational purposes.
The policy should, therefore, set out the circumstances in which the University will refuse a donation. This could include, for example, refusing to accept a donation which would compromise the university's ability to carry out impartial and independent research and teaching.
In order to manage its fundraising activities, the governing body will need to delegate power to university staff. Typically this would be to the university's fundraising team, but it may also delegate certain powers (including approving high value donations) to the Vice-Chancellor and other members of the senior leadership team who are not typically involved with fundraising day-to-day.
Because the governing body will ultimately remain responsible for the exercise of its delegated powers, it is important that all relevant university staff are given guidance to ensure that they have a clear understanding of the operational constraints within which they must operate. This is important in ensuring that the members of the governing body can comply with their duties as charity trustees under charity law.
Guidance for university staff will typically cover a range of areas, but the key aspects are outlined below.
Due diligence on prospective donors is essential to enable the university to manage any possible reputational risks. This is important generally, but may be a particular risk where a university's relationship with a donor grows "organically" over time, leading to a failure to pause at any point and carry out due diligence.
The due diligence policy and procedures will need to be set out in sufficient detail and it is likely that the university will wish to apply different levels of due diligence according to the status of the prospective donor and/or the amount of the donation. The detailed process should be set out in writing and form part of the operational guidance adopted by the university.
The guidance should set out clearly the authority and approvals process for accepting and refusing donations. That process may differ depending upon the status of the prospective donor and/or the amount of the donation, but it is likely to be important to build in an "override" in relation to any donation, regardless of value, which could give rise to significant risk of public interest or potential controversy or which raises complex questions about whether it would be in the university's best interests to accept the donation.
In those sort of circumstances, there should be provision for a decision to be referred to a higher level of authority, perhaps to the Vice-Chancellor or the governing body itself.
Because of the importance of the approvals process, the university will generally want to ensure that it is articulated in a clear and simple way and there is absolute clarity around the acceptance and refusal of donations.
Sometimes a donor may ask for the return of a donation, perhaps because of a change in their own circumstances. The operational guidance should address this issue bearing in mind that, under charity law, a university should only return a donation if the terms and conditions provide for its return or in line with some very specific legal rules.
The operational guidance should ensure that those dealing with donors are aware that any question of this kind needs to be referred to the university's internal or external legal advisers.
The operational guidance should take the same approach in relation to any significant change to a project or other activity for which funds have been raised and which could prevent the university from applying those funds in accordance with its legal obligations.
It will also be important for the university to ensure that its staff understand that any fundraising activity must comply with a number of different legal and regulatory regimes. Fundraising should comply with charity law and the guidance issued by the Charity Commission (although universities are usually exempt from registration with and direct regulation by the Charity Commission, its guidance on charity law is relevant to universities). The Charity Commission has issued guidance on the duties owed by a charity's trustees in relation to fundraising in its publication CC20.
Following significant controversy around some forms of fundraising by charities in recent years, the government established the Fundraising Regulator which is responsible for maintaining the Code of Fundraising Practice. The university is likely to want its fundraising staff to comply with the Code. Many universities will also wish to consider whether their fundraising should be in line with the ethical principles for fundraisers adopted by the Council for the Advancement & Support of Education.
Finally, the university may find it helpful to identify the duties owed by those people who need to make decisions in relation to fundraising, whether at governing body level or on a delegated basis. This can be a helpful reminder of the key considerations, which will centre on a decision which is in the best interests of the university. Decision makers will also need to ensure that they take account all relevant factors and disregard any irrelevant factors (including personal views on political or ethical issues).