Donation bubble about to burst as recession rages

28th August 2009 at 01:00
Independent schools facing tough financial year despite record fundraising highs

Donations to top independent schools may have reached record levels last year, but the recession spells tough times ahead for fundraising, experts have warned.

A survey of leading schools by accountant Horwath Clark Whitehill suggests donations leapt more than 9 per cent in just 12 months.

Its research sample of 536 schools raised pound;88 million in donations in 2008, up from nearly pound;82 million the previous year. A total of 23 schools accepted more than pound;1 millon, while a further 68 schools raised more than pound;200,000.

But the report suggests that it is "virtually certain" that fee-charging schools would find it much harder to raise funds in 2009.

While school fee increases were slightly lower in 2008 than previous years, the report predicts that the financial climate could force schools to put up fees quite steeply.

The fall in house prices, volatile stock markets and rising unemployment may have "a severe impact on school fee affordability" over the next few years, it said.

Schools have had to become increasingly more innovative in the way they raise cash, licensing their names to overseas schools, running more profitable shops and even allowing their estates to be used for farming or landfill.

Yet many schools have become reliant on fundraising during the economic downturn because they don't want to raise fees and deter hard-up parents.

But the report's warnings are backed up by individual schools, who say they have noticed that donors are starting to give smaller amounts, or put off making donations altogether.

"People are still giving, but not so much," said Rachel Hindle, development manager at Stonyhurst College, a historic Jesuit boarding school in Lancashire with a long-established fundraising department.

"In our most recent mailshot, quite a few people said they are not in a financial position to give at the moment. There has been more of that than usual. We've also had some quite successful businesses either giving a smaller amount or saying they want to put off donating for a couple of years."

To counter this effect, Ms Hindle says fundraisers are now practising a technique known as "friendraising", the use of networking to raise money, and being more sensitive about how they ask for cash.

Some large, established schools report that they are still doing extremely well during the credit crunch, with Benenden School in Kent reporting its "biggest ever" single donation this year.

However, smaller, less well-known establishments are expected to suffer more deeply.

The report also showed that although overall pupil numbers were up last year, 43 of the schools surveyed saw a decline of more than 10 per cent.

Junior schools, it said, were successfully lowering costs by increasing the pupil-teacher ratio, but senior schools had failed to follow suit.

Jonathan Cook, general secretary of the Independent Schools' Bursars Association, said he wasn't surprised by the report's findings.

"The collapse of Lehman Brothers didn't happen until September 2008 so this data represents quite good times from before the recession, not the current situation," he said. "The report reaches the logical conclusion that times are now getting more difficult."

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