Barry Spicer: Generosity builds wealth and security

The recent $10 million endowment to the University of Auckland Business School by a family who wish to remain anonymous heralds a new era in educational philanthropy in New Zealand.

The business school's campaign to develop a world-class facility, both in terms of the new building named after another donor, Sydney-based Kiwi Owen G. Glenn, and in the quality of its teaching and research, has been very successful. This endowment marks a new kind of giving and is the clearest sign yet that tertiary education in New Zealand cannot rely solely on Government funding and student fees to build a world-class system.

Educational philanthropy, of course, has a long tradition in the United States. Private foundations bearing the names of some of that nation's greatest industrialists and civic leaders have endowed billions of dollars at most leading universities.

Such bequests to learning institutions are the norm and contribute greatly to the opportunities available to their students and staff. These contributions support wealth creation and a strong successful country.

New Zealand lacks such a tradition but the generosity of business school benefactors, such as this latest anonymous gift and last year's $7.5 million contribution from Owen Glenn, suggests this may be changing.

New Zealanders are, in fact, generous people by international standards. Most of our giving, however, goes to medical or social causes. In Britain only 1 per cent of charity is given to education. Here it is less than 1 per cent. We still view education funding as the Government's responsibility.

But Government spending on tertiary education has fallen, relatively, in recent years.

To maintain international-quality teaching and research, universities are now obliged to look for private sector support. In contrast, in the US 14 per cent of philanthropic giving goes to education. About 40 per cent of alumni at the Ivy League universities give money to their college.

The reason for this difference is cultural. America has a long tradition of philanthropy to educational institutions. This is not seen as the domain of the rich, but simply an important aspect of being a good citizen. US Government tax concessions undoubtedly provide a powerful incentive.

Philanthropy - private giving - is the reason the US has developed so many great universities, with tremendous resources and huge capacity and capability.

"Matched giving" is also a powerful driver in US philanthropy, where one potential donor pledges to give an equal amount if another person or company gives the same.

This can work here, too, as demonstrated in 2002 when the Government pledged $25 million to the business school if a similar amount could be raised from the private sector. It was a huge catalyst for our campaign and led to the Partnerships for Excellence programmes that have since sprung up all around the country.

Our endowment fund donor has laid down a similar challenge to other donors - $5 million of their $10 million donation is conditional on the business school raising $10 million from other sources, creating an initial base fund of $20 million.

People give for many reasons. Some, such as Glenn, simply want to give back to the country of their upbringing and believe that world-class business education has a major part to play in training a new generation of business leaders who will help secure NZ's economic prosperity.

Many donors, like our new endowment funder, prefer to remain anonymous. In fact, this is their second anonymous gift to the business school.

Such benefactors are passionate about the need to equip students intellectually to be outstanding business leaders and entrepreneurs.

Some of our benefactors are individual supporters or alumni of the University of Auckland Business School, others are companies or trusts which share our mission. All of them, including overseas donors, love New Zealand, value education and care about the health of the business sector. They have a long-term view and believe that quality business education strengthens the economy.

Donors understand that funds invested in universities directly benefit our community and economy. This has been verified by the NZ Institute of Economic Research identifying the university's annual contribution to Auckland as almost $4.4 billion.

The 40 benefactors who have given to the business school so far provide vital funds for new academic chairs and programmes. Without them these initiatives would not be possible and we are very grateful for their support.

The latest donation of $10 million to the business school is extraordinary by any standard, but if a culture of philanthropy for education were to thrive in New Zealand, all our universities - and the communities they serve - would be much better off.

* Professor Barry Spicer is dean of the University of Auckland Business School.