Britain's Universities: Funding Excellence

BREAKING TRADITION: Oxford's Hood has launched a major drive for private funding

Kevin Davies for TIME

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If you're lucky enough to figure among the alumni of the University of Oxford, you're likely to have heard the news: your place of learning needs cash. Lots of it. In late May, Oxford launched the most ambitious fund-raising drive ever undertaken by a European university, aimed at boosting its coffers by at least $2.5 billion. The eager among you have chipped in already — helping Oxford to more than $1 billion so far — but there are many that haven't. Still need convincing? "The task before us is to guarantee Oxford's future pre-eminence," announced Vivien Duffield, chairman of the campaign, "in a world now changing so fast that we must lead or fall behind."

It's a test being sat on campuses all over Britain. Short of cash, and jostling colleges from America to China for the smartest students and staff, universities across the country are rethinking fund raising. The need is obvious: investment in British higher education stood at 1.1% of GDP in 2004, according to the most recent data from the OECD, while the U.S. spent 2.9%. From medieval Oxford and Cambridge to ambitious modern universities like Warwick, institutions are slowly sharpening their competitive edge. As worldwide college entry rates and numbers of students learning overseas soar, "no matter which way you look at it," says Heather Bell, appointed last year as Oxford's first director of international strategy, "higher education is internationalizing and the competitive intensity is increasing."

The challenge is a familiar one to universities throughout Europe. Low investment means institutions across the European Union pocket an average of $16,000 a year less per student than their U.S. rivals, according to a 2006 report by the European Commission. Lower revenues mean lower spending, and the result is bleakly evident in rankings of the world's best universities. In the highly regarded table published annually by China's Shanghai Jiao Tong University, European institutions fill just four of the top 25 places; wealthy North American institutions account for almost all the rest.

There are signs that Europe has awakened to the problem. On June 2, for instance, the University of Toulouse 1 inaugurated the Toulouse School of Economics, offering English-language graduate courses, thanks to $52 million in donations from corporate donors. A change in French law last year granted state-run institutions like Toulouse more autonomy, so such fund-raising efforts could become widespread in France. In Germany, where local governments have been free to levy tuition fees since 2005, federal and local governments have earmarked some $3 billion to promote excellence in research at selected universities through to 2011. Others spy money-spinning opportunities abroad. At the Paris-Sorbonne University Abu Dhabi, opened in late 2006, students are carefully selected for entry and required to pay $20,000 each year for tuition. Despite France's reforms, the Paris-Sorbonne University — the Gulf school's publicly owned parent — is forbidden to do either back home.

British universities have been even busier than those on the Continent in responding to the challenge from the U.S., but the private funding gap remains enormous. While U.S. public investment in higher education, relative to GDP, is similar to that of the U.K., eye-popping tuition fees and generous philanthropists have endowed American higher education with more than six times more private investment.

Students and their families spend more than ever to go to private four-year colleges in the U.S. — last year alone, average annual tuition fees to such institutions shot up by 6% to just over $22,000. In comparison, fees in England, although higher than in much of the rest of Europe, are modest: the government only introduced its current system in 2006, and has capped fees at roughly $6,000 per student. Even after adding the state's own contribution — and until the government reviews fee levels next year — Cambridge is short by some $10,000 for each student.

Plugging that gap means tapping a university's endowment. That "is no different from U.S. universities," says Alison Richard, vice-chancellor of Cambridge. "But our endowment isn't sufficient, so it's a real stretch." Private donations invested by Yale University are currently worth some $23 billion; the endowment fund of rival Harvard is $35 billion. Dozens of other American universities boast funds valued at more than $1 billion. Even Britain's wealthiest universities are poor by comparison. The central endowment fund at Oxford is about $1.3 billion, and Cambridge's stands at roughly $2 billion. (The universities' individual colleges — Oxford has 39, Cambridge 31 — separately hold endowments worth a total of $11 billion.) At London's Imperial College, one of the world's best for scientific research, funds amount to around $115 million; and the endowment at the London School of Economics (LSE) is worth some $110 million. Over the last 50 years in Britain, says Richard, who was Yale's Provost before moving to Cambridge in 2003, "the great efforts that were taken in the U.S. to call upon the alumni and friends of universities did not happen here."

A Nonacademic Approach
But that was then. Money raised through Oxford's appeal will be poured into new facilities and the endowment. Scholars at Cambridge needn't feel outdone. Under its own campaign, launched in 2005 to mark the university's 800th anniversary next year, Cambridge hopes to bring in $2 billion by 2012, and has already raised some $1.3 billion.