POPPEK LAW FIRM

Sponsorship by Companies for Research and Education in Germany

Mr. Reinhold Poppek,Lawyer

Düsseldorf, Germany

Amman, Jordan, December 13, 2011

Panel Discussion

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Overview of the German higher education system

418 higher education institutes in Germany 105 of which are universities 2007:

21.6 bil € of public funding 25.9 bil € of total funding

2009: 449,400 people graduated from high-school (Abitur) 170,900 entered higher education

universities and higher education predominantly state funded and run

however, increasing private involvement since the 1980s private funding is rapidly increasing in public universities private Universities as a new development

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Public universities

higher education as a public function post-war: higher education made available to all student loans (BAföG) made available to those in need of financial

support public universities under the auspices of the federal states’

ministries of education, but with a high degree of autonomy on the other hand: increasing private involvement in public

universities industry and academic interest in improving the practical relevance

of university teaching and the preparation of students for work life industry interest in attracting talent at an early stage universities increasingly unable to secure sufficient funds without

outside help 2007: 4.3 bil € of corporate funding at public universities companies finance additional places at universities, bursaries,

lecturers, institutes and specific scientific projects 40,000 bursaries available at German universities (estimate) of

which only 14,000 are state funded

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Mechanisms for private involvement in the public universities

donations general donations and donations earmarked for certain purposes

possible “Stiftungen”

often very old German institutions which provide outside financial support for the universities

comparable to charitable trusts, but independent legal entities therefore able to manage and assign funds as institutions funds are generated through capital gains, the capital itself is not spent involvement usually possible at any time by adding to the capital stock

Sponsoring usually for short-term, specific projects matter of individual negotiation between the sponsor and the

institute/university

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Company benefits of private involvement

tax benefits: donations of up to 0.4 % of the sum of the annual turnover plus

wages are tax deductible as “special expenditures“ sponsoring costs considered operational costs of the company

influence: “Stiftungen” manage and assign donations as well as their own funds formally independent institutions headed by an executive committee however, composition of the executive committee often reflects the

most important donors (Volkswagen AG, Deutsche Bank AG, Roland Berger Strategy consultants)

marketing display of the company name, f.e. “Volkswagen-library”, Berlin supporting education considered an important part of corporate

social responsibility in Germany recruitment:

careers presentations, career days, open days at companies etc.

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Outlook and criticism

corporate involvement in- and funding of higher education has seen a rapid increase over the past 10 years, aided by legislative liberalisation

concern amongst academics of a “market dictate” in higher education the executive committees or sponsors may exert too much

influence over the content of teaching and scientific research

economically less relevant disciplines may be cut off from important funding (ancient history, philosophy, classics etc.)

funding for basic research more difficult to procure due to its lack of an immediate economic use

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Private universities

12 private universities in Germany to date relatively new development (since the 1980s) 100 % privately financed charitable status limited spread of disciplines: overwhelming majority focuses on

economics governing principles (examples)

combining academic rigor with practical relevance emphasizing the global dimension of business supporting an entrepreneurial culture creating a stimulating intellectual and international environment

very different conception compared to the public universities some founding members of private universities:

Henkel AG, Allianz SE, Metro AG, Bosch AG, German Chamber of Commerce, Siemens AG, BMW AG

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Organisational structure of private universities

founding members set up a German trust fund or “Stiftung”

the trust fund is controlled by a board, where members are represented relative to their investment, and managed by an executive committee

the trust administers all university funds

board and executive committee are therefore the highest decision making bodies within the university

executive officers are appointed to run the day-to-day business

an academic “rectorate” is responsible for the most important academic and scientific decisions

trust fund

members board

CEO / CFO rectorate

facultiesadministrative

staff

9

Thank you very much!

شكرا !جزيال