University revenue from donations is likely to be cut by tens of percentage points over the next several years, according to senior sources from Israel’s higher education system.
Donations are down an estimated 30-40% this year, while other sources say the hit is probably even larger – down as much as 50% from what universities took in last year.
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The immediate impact of this will be on the universities’ capacity to build new buildings and improve research and teaching over the next several years. They will also be less capable of assisting students in financial crises.
The universities are also facing budget cuts from other directions, such as charging students lower tuition to assist them. They are also concerned that they may face government budget cuts over the next few years due to the country’s economic state.
Donations are down because the coronavirus crisis hit some of the universities’ major donors abroad. In addition, many foreign donors who donated to Israel in the past are now redirecting their money to their own communities in the wake of the coronavirus crisis.
The universities raise hundreds of millions of shekels in donations every year, primarily from U.S. Jewish donors. Most of the donations are intended for building new buildings, supporting research and developing research infrastructure. Other donations are earmarked for assisting students. Over the past year, the universities began ramping up fundraising for assisting students in financial distress.
According to the universities’ financial reports, in 2018 they raised 585 million shekels ($173 million) in donations, but in practice they actually raised more, as most donations are not used entirely in the year that they are received, but rather over the course of several years, or set aside for a predetermined use. Many donations are immediately put into an investment fund until they are used, and do not appear in the university’s annual budget.
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On Sunday, Israel’s national students association demanded a 30% tuition cut for the current academic year, explaining that many students had been adversely affected by the coronavirus crisis and because remote learning would necessarily not be as effective as in-person instruction. In May, after the first wave of coronavirus infections hit Israel, the student union reported that 45% of students who were employed had been placed on unpaid leave, and 50% of students reported leaning on their parents for financial assistance.
The Finance Ministry stated that it opposes cutting tuition, saying that the state would not compensate the universities should they charge less from students.