Fundraising principles and permits
Aalto University has a fundraising permit granted by the National Police Board.
The permit is valid from 1 January 2018 to 31 December 2022 throughout Finland, except for the Åland Islands. The number of the fundraising permit is RA/2017/1277.
The donations received will be placed in special purpose funds and invested in capital markets according to the University's investment strategy, together with the University's other funds.
The Aalto University Board decides on the size of the return paid on the capital in special purpose funds and, based on the proposals made by the president and the deans of the schools, decides on how the funds will be used.
The special purpose funds make up part of the University's equity. A summary of the transactions in the special purpose funds is published annually as an appendix to the Aalto University financial statements, in the section Special purpose funds.
Financial management and investment activities
The goal of the investment activities of Aalto University is to provide additional funding for high-quality teaching and research. The aim is to cover approximately 5% of the university's annual operating expenses through investment returns.
The goals of Aalto University's investment activities are to provide a steady and predictable cash flow to fund university operations as well as to maintain and achieve long-term growth in the real value of the capital. Preserving the real value of the endowment capital secures equality across generations by enabling the preservation of the same purchasing power of the endowment capital and the funding it provides to the University’s operations over time. This means that, in the long term, the value of capital must increase in an equal proportion to inflation in order to maintain its purchasing power over time and to enable financing the University operations with the return on the capital to an equal extent over time. In the calculation of real value in investment activities, the so-called university index is used, which has historically been approximately 1 percentage point higher than the consumer price index.
Donations the return on capital of which is used to finance the University operations:
Fixed capital consisting of capitalised donations has a very long investment horizon, and a long-term real income target of 3% has been set for it. This is intended to cover approximately 5% of the University's annual operating budget in the years to come. In practice, this is estimated to equal a long-term nominal yield of approximately 6%.
Donations the full capital of which can be used to finance University operations:
As regards capital consisting of donations entered as income, the goal is to maintain the nominal capital value, since the investment horizon is shorter.
Use of return on capital
An expenditure policy has been prepared for the use of return on capital, and this policy determines the maximum sum of money available for financing the university's operations on an annual basis. The expenditure policy has been created to balance the goals of investment activities. It takes into account both the capital's market value trends and use levels from previous years. Therefore, the expenditure policy secures the maintenance of the capital's real value in the long term while also protecting the annual use from the short-term fluctuation of investment returns.
Due to the purpose and goals of the university's investment activities, the investment horizon of the university's fixed capital is very long. Therefore, the University's investment activities focus on a long-term approach, diversification and controlled risk-taking. The investment portfolio has been distributed globally and in different asset categories. The investments have been implemented through funds.
Aalto University has also committed itself to complying with the principles for responsible investment. Some 98% of the investment portfolio is managed by external asset managers, who observe the principles for responsible investment. Aalto University is a member of Finland’s Sustainable Investment Forum (FINSIF).
The University Board decides on the University's investment strategy and the annual use of returns.
Organisation of investment activities
The University Board is in charge of the University's investment activities and approves its investment strategy. The university investment team consists of a head of investments and two portfolio managers. The investment team is in charge of planning and implementing investment activities according to the investment strategy. The head of investments makes decisions on investments and is in charge of fund selection. In addition, the university has an advisory investment committee consisting of external members. The chair of the investment committee is Hanna Hiidenpalo (Director, Investments, Elo).
Aalto University communicates the results of its investment activities twice a year. Furthermore, the university's financial statements and annual report, published once a year, explain the university's investment activities and portfolio in more detail.
Aalto University's fundraising principles are public, transparent principles aimed for the University's existing and prospective donors:
Aalto University principles in fundraising (26 August 2015)
The fundraising principles of Aalto University are public, transparent principles aimed for the University's existing and potential donors.
Aalto University focuses on top-quality research and teaching. Supporting the enthusiasm of our students and preparing them for future working life are the University's most important objectives. By conducting pioneering research and educating new experts, the University generates new jobs, economic growth and well-being in Finland.
It takes hard work and investments to be a pioneer. Donations are an important part of Aalto University's fundraising and improve the University's opportunities to develop its operations as an international high-quality university.
The following principles are observed in fundraising and donations:
1. General principles
The donation culture of Aalto University is based on respecting the will of the donor, ethics and openness.
Aalto University accepts donations that are related to the implementation of the foundation's purpose: to promote free research and scientific and artistic erudition, provide higher education based on research and educate students to serve their country and humanity. (Aalto University Foundation Constitution).
- Honesty: Fundraising at Aalto University is honest, responsible and truthful. Fundraising acts and donations are used in a way that promotes the purpose of Aalto University.
- Respect: Aalto University's fundraising acts with respect to the university community, the donors and the beneficiaries. Privacy and the freedom of choice in all its forms are valued. The will of the donor is respected.
- Integrity: Aalto University's fundraising acts openly. All actual and potential conflicts of interest regarding fundraising are disclosed and any personal and professional misconduct is avoided.
- Transparency: Aalto University reports on the donations, their usage, administration, costs and returns in a clear, accurate and comprehensible manner.
2. Donation opportunities at Aalto University
The University provides up-to-date information on all of its donation opportunities on its donor website. The donation opportunities are divided into the following funds:
- Aalto University General Donation Fund (endowment fund)
- Study Field-Specific Funds (endowment funds)
- School-Specific Funds (endowment funds)
- Strategic Initiatives (fixed-term, expendable funds)
- Designated Funds (possible for prominent donations)
Based on their judgement, donors can earmark their donation to the general development of the University, study field-specific funds, school-specific funds or fixed-term project-specific funds that support the implementation of the University's strategy. As regards prominent donations, designated funds can be established on a case-by-case basis.
3. Accepting donations
Donations to existing funds and specified strategic projects can be made continuously without a separate deed of donation. An exception to this are possible campaigns with government capitalisation complying with instructions from public authorities regarding the documentation of deeds of donation as well as prominent donations made using a deed of donation.
As regards donations made using a deed of donation, Aalto University requires that:
- The donation and its terms are in line with the University's values, strategy and mission
- The donor and the source of the donation are known
- The payment methods used by the donor are reliable
- The donation and its use do not conflict with the University's ethical principles
- Accepting the donation and its terms does not risk the University's reputation of the University or the reputation of the other donors
- The expenses or other liabilities arising from the donation are estimated to be reasonable.
Donations made using a separate deed of donation are accepted by the president.
4. Usage, administration and management of donated funds
The Aalto University Board decides on the return of the capital of donated funds and the use of the funds on an annual basis as part of the University's annual budget.
The annual maximum use of the endowment funds is determined according to the spending policy approved by the Board. The goals of the endowment management are to provide a steady and predictable income to fund University operations as well as to preserve and accumulate the real value of the endowment capital in the long term.
The annual use of expendable funds is based on the fund memoranda, the progress of strategic projects and the development of the market value of the funds.
The decisions on targeted use of the funds at the University level are made by the president. The decisions on targeted use of study field-specific and school-specific funds are made by the deans in accordance with University's general strategy. The decisions on targeted use of strategic project funds are made by a person authorised by the Board/president based on the project memoranda.
Stakeholders receive an annual report on the administration of the funds, the fundraising costs and their justifications. The fundraising activities, accounting and reporting are open and unambiguous.
The Aalto University Board is in charge of the University's endowment management and approves the University's investment strategy. The University's endowment management is organised in a professional manner. Aalto University is a member of FINSIF (Finland's Sustainable Investment Forum ry) and is committed to complying with the principles of responsible investment.
The goal of endowment management is to provide additional funding for high-quality teaching and research. The investment horizon of the fixed capital is extremely long. Investment management focuses on a long-term approach, diversification and controlled risk-taking. The investment portfolio has been distributed globally and in different asset categories.
The donations whose entire capital can be used to fund University operations by a set time limit are aimed at maintaining the nominal value of the capital. The investment horizon is short and the risk level in the investments is low.
5. Donor relations
Aalto University maintains and develops good and diverse relationships with its donors and offers the donors the opportunity to be involved in developing the University.
Voluntary donations are the best way alumni can show their gratitude to the University and a guarantee that the high standard of teaching and research will continue also in future. Donations are an important part of Aalto University's extensive long-term alumni activities.
Aalto University respects donor rights by providing timely information on how the donations are used, taking into consideration donor privacy and honouring donors' wishes.
The University maintains regular contact with its donors. Donor communication is based on a donor report, in which the University communicates information on the use of the funds, the results and costs of fundraising, investment performance and donor events.
Aalto University communicates information on the performance of its investments regularly. Furthermore, the University's financial statements and annual report explain the University's endowment management and portfolio in more detail.
Aalto University shows its gratitude to the donors by organising seminars, campus visits, donor events and other high-quality events. The most prominent donors may be acknowledged through specific designations. Timely information on opportunities for acknowledging donors and for donor visibility is published by the University on the website. An exception to this are possible government capitalisation campaigns complying with terms issued by public authorities regarding the acknowledgement of donations and donors.
Aalto University aims at establishing long-term donor relations by offering diverse donation opportunities and donation arrangements to private individuals, foundations, companies and other types of donors. Donors are offered legal advice for arrangements concerning wills and other donation arrangements.
In addition to donor relations, Aalto University aims to establish important research collaboration with companies. A clear distinction is made between a gratuitous donation and compensable cooperation by the University in all its operation.
6. Communication, marketing and campaigns
Donations are based on the University's general reputation, the high quality of its operations and its good communication. Continuous, high-quality and timely communication with the existing and prospective donors supports building and maintaining long-term donor relations. Sufficient allocation of resources ensures first-class management of donor relations and donor communication.
Communication in support of donating is carried out in several channels. The methods used include personal meetings, events organised by the University, online visibility, visibility in different events, printed material such as the Aalto University Magazine, information packages, and visibility and campaigns in the social media.
A versatile and up-to-date website with information on donation opportunities, campaigns, forms of donation, the accumulation and use of the donations, and the documentation related to donating is available for those interested in making a donation.
7. Endowed professorships
Endowed professorships are professorships the costs of which, including all incidental expenses, can be covered entirely or mostly with a donation or its returns. A significant donation can help increase the resources in a particular field of science over the University's normal resources. If the donor so wishes, Aalto University can acknowledge a significant donation by naming the professorship in a way that honours the donor.