The Changing Funding of Universities in Finland with Special Reference to Strategic Funding, Donor Funding, and Accountability

Key words: strategic finance, donations, university accountability The idea that universities should diversify their revenue sources is well-established. This was also one of the ideas behind the 2010 Finnish government... [ view full abstract ]

Key words: strategic finance, donations, university accountability

The idea that universities should diversify their revenue sources is well-established. This was also one of the ideas behind the 2010 Finnish government transformation of the country’s fourteen universities proper from units of public administration and public financial management into legal persons and economic entities of their own. The 2015 government cutbacks in the core funding of the Finnish universities have further pushed the universities towards new sources of funding over and above their core revenue from the government budget and their other governmental funding sources. One alternative comprises elaborating ties with businesses and other institutional actors to raise strategic funding and to attract donations. These prospects give rise to accountability questions many of which are new.

• First, this paper asks: What roles do strategic funding and donations play in the Finnish university sector at the present time and in the foreseeable future?
• Second, the paper asks: What are the accountability implications for the universities of attracting strategic funding from other sources than the national government and attracting donations? 

The paper uses the Actor-Network-Theory (ANT) as its principal theoretical framework. This means that the relevant dynamic networks of relational ties must be constructed. The emphasis has to be put upon mediator entities, which multiply influences, and upon the translation of the challenges into a network forum concerning the worth of which actors agree. We also deepen on strategic funding utilizing S.J. Bailey’s “4Es” framework (“efficiency”, “economy”, “effectiveness”, and “equity”) originating from public finance studies. Preparing this paper, two types of empirical research material have been used. First, the paper builds upon documentary analysis, such as budgetary and other funding documents including available financial statements. Second, semi-structured interviews were carried out putting the focus upon two fully-fledged multi-faculty universities, the University of Tampere and the University of Helsinki.