Original article published in the newspaper O Estado de São Paulo
“Tag three friends to donate”, asks a post by alumni of the University of São Paulo (USP) on Instagram. The objective is to increase the donation fund, called endorsement, from the Polytechnic School, one of the pioneers in the country. Following a few successful experiences, Brazilian universities are trying to leverage the creation of these savings. In addition to wealthy alumni, institutions are now targeting small donors interested in supporting social impact projects and boosting Brazilian research.
Common in the United States, endowments These are long-term funds, formed by donations. The money is invested in the market and the university only uses what it yields, for actions such as improving laboratories, research support and scholarships. The idea is that the fund is permanent: the bigger the donation pool, the higher the income and the more projects are supported. The funds do not replace the public budget, but are used for complementary actions. In Brazil, a 2019 law gave guidelines to create endowments, but the government vetoed tax incentives for donors, which is seen as an obstacle to the initiatives.
In recent months, state universities in São Paulo have advanced in their endowments. The State University of Campinas (Unicamp), for example, opened the donation channel four months ago. USP, which already has endowments linked to schools such as Engineering, Administration and Medicine, hopes to consolidate the fund for the entire university by the end of the year. And the Universidade Estadual Paulista (Unesp) started contacts with potential donors to put the measure into practice.
Strategies for engaging donors range from social media posts to easy payment. Millionaire supporters, generally former students, are still welcome, of course, but the groups also invest in “retail fundraising” of modest amounts, such as R$20. Transfer via Pix and subscription plans, such as a “Netflix of donations”, shorten the path. In addition to fattening the coffers, small contributions from many pockets give legitimacy to the funds.
“We have received donations of small amounts, people asking if they can donate a little every month”, says Andreia Marques, institutional development manager at Unicamp's Lumina Fund, which has already raised R$500 from 65 donors. Transfers via Pix represent a third of the total.
The value of R$50 million is the expectation of Unicamp's fund collection over the next 10 years. The university hopes that in 2 years it will be possible to use income. There is no minimum contribution amount. “Any donation is welcome”, states the rectory.
The endowments of universities “surf” in the emphasis on scientific work during the pandemic and, at the same time, in the reaction against the anti-science discourse and the funding cuts by the Jair Bolsonaro government. “Today, donating to the university is almost an act of resistance.”
A pedagogue trained at Unicamp, Helena Whyte, aged 60, says she admires universities abroad that have savings from large donations. She was one of Lumina's first donors. “The fact that the (federal) government denies science and puts obstacles in the way for those involved in research made me worried.” Helena hopes that the fund's income will prioritize students from the periphery.
At USP, the impulse to create the permanent fund came from the health crisis, says dean Vahan Agopyan. The emergency increased the participation of companies and civil society in projects for covid-19, such as respirators. Almost 2 thousand individuals donated in a program that raised R$4,4 million. “From a teacher who donated her entire salary to a person who gave R$50”, says the dean. “We realized that the lack of a donation channel did not allow interaction with society.”
Agopyan hopes to open USP's endowment fund to donations later this year. And it foresees participation even from those who did not graduate from USP, but support the public university. The know-how for this type of investment comes from within. It was at the USP Polytechnic School that one of the first successful funds in Brazil emerged, in 2012. “There was no legal model, we had to structure it from scratch. And the difficulty was enormous in attracting the first donors”, says Tiago Ziruolo, president of Amigos da Poli. Today, he celebrates the amount of R$36 million and the investment of R$1 million in dozens of projects, from drones to health equipment.
The Friends of Poli rely on large donations. And, over the years, they diversified channels to reach even undergraduate students. Mechanical engineer Gabriel Borrasca, 26 years old, for example, is a frequent donor – small amounts and a lot of work. He deposits R$50 a month into the fund, through the automatic collection system, and is also a volunteer, managing 160 other people who work for the endowment for free. “I started donating as a student.” He had a project supported by the fund when he was in college and even managed to travel to compete abroad - so he felt the desire to give back.
The experience at Poli encourages other groups, such as former students from the School of Administration of the Federal University of Bahia, which in July launched Conecta EAUFBA. “The purchasing power in the Northeast is different from the Southeast”, says the president, Luciana Ferreira. “We thought that, from the beginning, we couldn’t count on just a few people. We need to disperse, engage more, even if at a lower cost.” The group plans “ambassador” posts on social media and contact with graduates. With a subscription donation model - and immediate cancellation -, it expects to reach R$1 million by the end of the year.
At the Pontifical Catholic University of Rio (PUC-Rio), the endowment fund created at the end of 2019 with the support of the Alumni Association (AAA) has on its management board personalities such as the former Minister of Finance Pedro Malan and the former president from the Armínio Fraga Central Bank. Now, AAA maps the 200 students - most of them anonymous - who passed through PUC-Rio. “We seek a change in culture where everyone donates what they want”, says Ricardo Lagares, president of AAA. The focus is to provide scholarships to low-income students. “Popularization is important because it brings legitimacy to the organization,” says Paula Fabiani, CEO of the Institute for the Development of Social Investment (Idis), which supports institutions in creating their endowment funds. Capturing the small donor, she adds, is also strategic. “He could turn into a great donor. Some will emerge as entrepreneurs,” she predicts.
The path to building a culture of donation in Brazil, however, is still long. It comes up against the lack of tax incentives, the population's distrust about the use of resources and even the fear that the government will not be obliged to invest. The crisis imposes even more difficulties. Showing concrete actions, even if small, resulting from the funds, is one of the strategies to engage.
In the US, where endowments have had incentives for more than a century, donations to universities reached US$49,5 billion (R$257 billion) in fiscal year 2020, according to the Council for Advancement and Support of Education. In the country, even before graduation, young people are encouraged to participate in the alumni community. Donating is easy: Harvard, for example, has online mechanisms for recurring contributions, with a minimum of US$25 - and has raised US$41,9 billion in the last five decades. Tax incentives and the chance to give names to buildings encourage more - in Brazil, naming public spaces is a more complicated process. In 2020, there was an increase in the participation of individuals who are not alumni in the USA.
The anti-racist Black Lives Matter movement also played an important role. Netflix CEO Reed Hastings and his wife, for example, gave $120 million to universities dedicated to teaching black people.
Veto on tax incentives is an obstacle to more contributions
The 2019 endowments law provided legal certainty to create endowment funds at universities, but threw a bucket of cold water: the veto on tax incentives for donors is considered an obstacle. Today, only a quarter of foundations supporting universities have already started the process of creating endowments, reveals a survey by the National Council of Foundations for Supporting Higher Education and Research Institutions (Confies), with 50 foundations. Most of them (78%) consider that tax incentives are the most important aspect for leveraging funds. Only three have already received donations.
As these funds cannot, by law, be created in the same university account, foundations are one of the channels. “There is no endowment fund without incentives, there is no point in taking courses or training”, criticizes Fernando Peregrino, president of Confies. The Ministry of Science and Technology has provided training for research institutions to create endowments. When asked about how to overcome the lack of incentives, the department did not respond.
In 2019, the Ministry of Education (MEC) proposed Future-se, a program that envisaged raising private resources, among other actions. The idea, subject to criticism and little discussed with institutions, never got off the ground. When contacted, the MEC did not comment.
Dean of the Federal University of ABC (UFABC), Dácio Matheus says that federal universities are still in their infancy in this area. “The lack of tax incentives is a limiting factor for putting energy into an endowment fund.”
For Paula Fabiani, CEO of the Institute for the Development of Social Investment (Idis), the lack of tax exemption puts off those who have not yet been convinced to donate. Idis tries to reverse the veto in Congress. Despite the barriers, she says, interest from universities in consultancies to create endowments is growing. The Confies study indicates that 95% of foundations intend to create funds.
Confies requests that supporting foundations be able to invest the resources they move in financial investments, the surpluses of which would be transferred to the endowment fund.
In debates with the academic community, the fear that donations relieve the government from investing is still weighing against the funds. Leaders are careful to make it clear that the endowment cannot be used for teacher expenses or bills - they are supplementary funds. “A research university needs government investment,” says Vahan Agopyan, dean of USP.
They also eliminate the risk of private interests overriding those of the university. “We always respond if there is a conflict of interest in any specific project evaluation”, says the director of Poli-USP, Liedi Bernucci. A member of the deliberative council of Amigos da Poli, she highlights the participation of teachers in the evaluations of supported projects.
How to help:
Friends of Poli: Endowment created by former USP Engineering students. Donations via the website amigosdapoli.com.br
Lumina Fund: Unicamp’s donation fund, is now open for voluntary contributions via the website www.funcamp.unicamp.br/fundolumina
USP's endowment fund: Launched last year, it should start receiving donations by the end of the year. Information at uspfundopatrimonial.org.br
Conecta EAUFBA: Endowment created by former students of the UFBA School of Administration. Information at contatoeaufba.com.br
PUC-Rio: Created with the PUC-Rio Alumni Association. Information and donations at endowment.aaa.puc-rio.br
