Cash donations to universities rose by £43m last year to £560m

Kate Hunter of the Council for Advancement and Support of Education fears donations will suffer when Budget cap on tax relief comes into play

Universities claim donations are likely to be hit by last week’s Budget announcement limiting income tax relie
Universities claim donations are likely to be hit by last week’s Budget announcement limiting income tax relie

Cash donations to universities increased by £43m last year, but some fear that government plans for a cap on income tax relief will put the brakes on giving.

In 2010/11, cash donations excluding pledges rose to £560m, according to a survey of 151 universities and higher education institutions carried out for the Ross Group of university fundraisers and the Council for Advancement and Support of Education, which represents communications professionals in the sector.

The numbers of donors rose by 10 per cent in the year to a record high of 204,250, the report says.

But universities said donations are likely to be hit by last week’s Budget announcement limiting taxpayers' income tax relief to £50,000 a year or a quarter of their income, whichever is higher, from April 2013.

Kate Hunter, executive director of Case Europe, said: "It’s fantastic to see an increase in cash income over the past year and a growing number of alumni and other donors getting involved.

"We are, however, concerned that after years of hard work to grow a genuine culture of giving to higher education, the plans to introduce a new cap on income tax relief could be a disincentive to some donors.

"We feel this sends entirely the wrong message to donors about the need for and value of their gifts to the sector."

Hunter said the amount donated in 2010/11 had increased because universities had rushed to maximise the level of donations before a £200m government scheme to provide match funding for voluntary donations in higher education came to an end in 2011.

Growing professionalisation in university fundraising had also boosted donations, she said.

Hunter said it was hard to know how much the sector would lose as a result of the income tax relief change, but she said higher education was likely to be hit because of all charitable causes it had the largest number of million-pound donors."

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