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The Anglo-Saxon Model and Higher Education in the United States

Philanthropic Capitalism and the American Funding Model of Higher Education: An Example for Europe?

Le capitalisme philanthropique et le modèle américain de financement de l’enseignement supérieur : Un modèle pour l’Europe ?
Carole Masseys-Bertonèche

Résumés

Le capitalisme et la philanthropie ont toujours eu un important effet sur l’enseignement supérieur américain. Néanmoins, si leur influence a été étudiée séparément, leur effet conjoint a rarement été un objet d’étude. Le but de cet article est donc de tenter d’analyser l’impact du capitalisme philanthropique sur le système d’enseignement supérieur américain, et de voir si cette expérience typiquement américaine peut être transposée au modèle européen. Depuis la fin des années 1970, le domaine privé a clairement pris l’avantage dans l’enseignement supérieur américain, et c’est ce « mouvement privatif » que cet article examine. Il se focalise plus particulièrement sur les universités de recherche les plus sélectives, celles qui ont toujours donné l’exemple aux autres institutions éducationnelles aux Etats-Unis comme dans d’autres pays du monde. Après un bref rappel des réformes entreprises à la fin des années 1970 sur le financement des universités, l’article détaille les nouvelles méthodes qui ont été mises en place pour s’adapter à ces réformes et la manière dont le capitalisme philanthropique les a encouragées. Dans un deuxième temps, l’article présente l’impact de la crise économique de 2008 sur la durabilité des universités, ainsi que sur les avantages et les faiblesses du capitalisme philanthropique.

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Texte intégral

  • 1 Philanthropic capitalism, as defined in this paper, differs from the concept of philanthrocap (...)

1Capitalism and philanthropy have always had a great impact on American higher education. However, if their influence has been studied separately, the combination of the two has rarely been a subject of research. The aim of this paper is therefore to try to analyze the impact of philanthropic capitalism on the American higher education system and to see if this typical American experience can be transferred to the European model. Philanthropic capitalism is defined here1 as the existence of a privately supported and managed funding system which has helped, throughout American history, to create and sustain a network of nonprofit institutions, the strongest of which are research universities, either to compensate for the weakness of the state or to counterbalance the power of the state.

  • 2 Karl Barry, “Philanthropy and the Maintenance of Democratic Elites”, Minerva 35, 1997, (...)

2The balance between the power of philanthropic capitalism and the power of the state in managing and financing public services has varied in the different periods of American history and the frontier between the two powers has never been clear-cut. One can therefore agree with Barry Karl, that “where in many other modern societies the maintenance of a stable, educated and productive society, via public services, has been assigned to government, Americans have sustained a dual system, public and private”.2

  • 3 To better understand the organization of the American Higher Education System, see The Chroni (...)
  • 4 On the influence of Research Universities on American Higher Education, see Roger L. Geiger, (...)

3Since the end of the 1970s, the balance of power in American higher education has clearly shifted to the private side and it is this “privatization movement” that this paper analyzes. It more particularly focuses on the top research universities,3 which have always set an example for other educational institutions in the United Sates as well as in the other countries of the world4. After a brief recall of the changes that took place at the end of the 1970s in the funding of universities, the paper explains the new methods that have been developed to adapt to these changes and how philanthropic capitalism has helped to foster them. Then, in a second section, it studies the impact of the 2008 economic crisis on the sustainability of universities and the strengths and weaknesses of philanthropic capitalism. It notably underlines the “embeddedness” of philanthropic capitalism in the history of the American higher education system and the permanent features which characterize it. The conclusion draws a parallel between the pressures exerted on European universities to become more competitive and to diversify their sources of income and the American philanthropic-capitalist system.

Philanthropic Capitalism and the Re-privatization of American Higher Education

1. The end of the golden age in the funding of American higher education

  • 5 The for-profit institutions of higher education started to be created only in the 1970s. (...)
  • 6 The system of governance of American public universities is particularly complex and vari (...)
  • 7 We have not mentioned income from auxiliary enterprises (e.g., athletics, dorm (...)

4The “marketization” or commercialization of American higher education has taken on many forms but its main characterization is the fierce competition between universities to increase their sources of income. The governance of American institutions of higher education differs depending on whether the university is public or private. Private universities are non-profit corporations5 managed by an independent, self-perpetuating board of trustees, which is accountable to no one, whereas public universities are more or less regulated by state governments.6 Their sources of income, however, are the same whatever their status with the exception of state money which is reserved to public universities. Revenues for American universities come from five main sources of income : student tuitions, endowment income, private gifts, federal funding and state appropriations.7 The difference between the funding of public and private universities, lies in the balance between the sources of income.

  • 8 See Carole Masseys-Bertonèche, Philanthropie et grandes universités privées américaines, (...)
  • 9 See Carole Masseys-Bertonèche, « Impact de la politique du président Nixon sur (...)
  • 10 See Carole Masseys-Bertonèche, Philanthropie et grandes universités privées américaines, (...)
  • 11 Patrick Moynihan, “The Politics of Higher Education”, Daedalus vol.104, n°1, Winter (...)

5At the end of the 1960s, public universities were almost entirely financed by public money – operating costs were covered by the states and money for research and financial aid was coming from the federal government. Private universities also greatly benefited from taxpayer money with, for some of them, more than 40 % of their budget financed by direct public funds.8 This golden age of generous public financing of higher education ended in the 1970s with the 1974 economic crisis. Public money also came with strings attached like, for instance, the implementation of affirmative action policies.9 Different voices in the academic world then started to call for a greater diversification of university sources of funding.10 Some commentators, like Daniel Patrick Moynihan, went so far as to say that private universities were running the risk of disappearing altogether if they continued to be so dependent on public funds. The prospect, he predicted was that “one by one the great private universities would be incorporated into state systems”. In his opinion, it would only be “another melancholy chapter in what Schumpeter years ago foresaw as the conquest of the private sector by the public sector in the later stages of a declining capitalism”.11 To this somber prediction of the likely disappearance of the American higher education private sector Ivy League universities were the first to react and they set the pace for the re-privatization of higher education.

2. Venture capitalism as a new method to manage university assets: the Yale endowment model

  • 12 For a more detailed account on the evolution of the management of Harvard and Yale endow (...)
  • 13 For more details on Yale endowment policy, see David Swensen, Pioneering Portfolio Manag (...)

6The first decision taken by elite universities to diversify their sources of income was to improve the management of their endowment. Harvard, whose endowment has always been bigger than its competitors, was the first to innovate. In 1974, it created the Harvard Management Company, an investment company whose main goal was to manage the endowment of the university.12 Yale, which is second behind Harvard, very quickly followed in its footsteps. However, unlike Harvard, it did not create a separate entity to run its endowment, choosing instead to organize a “homemade management” under the leadership of one of its alumni: David Swensen. David Swensen, together with Jack Meyer, the man who ran Harvard Management Company from 1990 to 2005, became the gurus of the new investment strategy of university endowments based on investing in hedge funds, private equities, real estate, commodities, venture-capital funds, and all other kinds of exotic and less liquid investments with very high returns.13

  • 14 Brian J. Hall, Jonathan P. Lim, Incentive Pay for Portfolio Managers at Harvard Manageme (...)
  • 15 Ibid., 3.
  • 16 Chronicle of Higher Education, “Colleges and universities endowments, 2006-200 (...)
  • 17 Chronicle of Higher Education, “Colleges and universities endowments, 2011-2012,” The Ch (...)

7This new innovative investment policy attracted the best money managers in the country. All the more so since, to motivate them, the portfolio managers at Harvard and Yale were paid according to their performance, just like in hedge funds or investment companies trading floors. Therefore, as the endowment got bigger, their incentive bonuses got bigger too. Very quickly they earned much more money than any administrator or professor at the university they worked for. Harvard’s top earner in 1995, aged 34, a former trader at Shearson Lehman Brothers, made $6 million that year, roughly 25 times more than the university’s then president, Neil Rudenstine. By 2000, Harvard Management Company’s top managers were making as much as $15 million to $20 million a year.14 Complaints about excessive compensation gathered force – academic members wondering whether HMC should pay its managers the same kind of bonuses that are typical of Wall Street.15 But, despite critics accusing Harvard and Yale of having made the accumulation of money their main objective, their capitalistic portfolio management policy was followed, with great success, by all the other research universities in the 1990s and 2000s. In 2007 a record 76 American universities passed the $1 billion mark in total endowments.16 This trend, however, has been accompanied by rising inequality among institutions as the first 20 richest universities own more than half of all the institutions’ total endowment.17

3. Getting money from philanthrocapitalists : A very competitive, Darwinian business

  • 18 The Chronicle of Higher Education, “Voluntary Support of Higher Education 1999-2000”, (...)
  • 19 On the emergence of fund-raising at public universities, see Aaron Conley and Eugene R. (...)
  • 20 Between 1978 and 1998 direct state appropriations as a portion of the total re (...)
  • 21 Erin Strout, “U. of Virginia unexpectledly opens $3-Billion Campaign to become a (...)
  • 22 Quoted in Priest and John, op. cit., 158.
  • 23 “We used to be state-supported, then state-assisted, and now we are state-located,” (...)

8The endowment policy could not have been such a success without the large amount of money which kept flowing towards research universities in the 1990s and 2000s. During the 1999-2000 academic year American universities set a $23.2-billion fund-raising record, a one year increase of 13.7 percent. The gains marked a fifth consecutive year of double-digit increases in private giving to higher education.18 However this money does not come so easily and the business of raising funds has become very competitive. Competition in fund raising is not new. What is new is that the number of universities seeking private funds has increased with the arrival of public universities on the market of philanthropy.19 Even if public research universities have always benefited from philanthropic support, this was limited to a small number of flagship state universities. There was a kind of agreement on the fact that private funds were primarily reserved for private universities as they did not have any support from the states. But in the 1980s and 1990s, with the diminution of state appropriations,20 the search for private funds became a necessity for all public universities. From 1979 to 1984 the percentage of public universities launching fund-raising campaigns had more than doubled and the number continued to increase in the 1990s. In 1990, the University of Michigan was the first public institution to launch a billion-dollar campaign and the University of California, Berkeley followed in its footsteps. The success of fund-raising campaigns has now become a priority goal for every actor within the university system: presidents, deans, administrators, academic members, professors, alumni. Development offices have become a key feature of the university organization. In this search for funds elite, private universities lead the game but public universities fare also rather well. In 2004, University of Virginia, a publicly supported institution founded by Jefferson in 1819, launched a $3-billion fund-raising campaign to become a “private public university”. Its president John Casteen, explained that “the last two years preceding the campaign the university had experienced a 31-percent cut in state funds and that the university has therefore no choice but to turn to private donations to remain competitive”.21 As it was already noted by Clark Kerr in 1991, “private fund-raising by both public and private institutions has increasingly become a mechanism for competitive advantage”.22 And even if some academic leaders deplore this harsh competition and what they call the privatization of public universities, they cannot but accept the fact that philanthropy has become an imperative source of funding for all research universities.23 However, this reliance on philanthropy has also made them dependent on the fluctuations of the financial market.

The impact of the economic crisis on American elite universities: weaknesses and strengths of philanthropic capitalism

1. The impact of the economic crisis: The resilience of elite universities

  • 24 Harvard University Financial Report, Fiscal Year 2009.
  • 25 Tamar Lewin, “Investment losses cause deep steep dip in university endowments”, New York (...)
  • 26 Bernard Condon and Nathan VARDI, “How Harvard’s investing Superstars crashed: when geniu (...)
  • 27 Chrystia Freeland, “Lunch with the FT : David Swensen”, Financial Times, Octobe (...)

9The most visible consequence of the economic crisis on elite universities was the collapse of their endowments. Between 2008 and 2009, Harvard lost 30 % of its endowment, almost $10 billion, the equivalent of the total value of every other university endowment in the world with the exception of Yale, Princeton and Stanford.24 If the amount of money lost is not as spectacular for other elite universities, as their endowments are not as big as Harvard, they nevertheless lost on average more than 20 % of their endowment in fiscal year 2008, the worst return since the Great Depression according to a study by the National Association of College and University Business Officers.25 The reason for the collapse of the research university endowments was an explosive mix of leverage, financial risk and lack of liquidity. Indeed, in order to boost the profitability of their portfolios, the managers of endowments used a significant level of leverage by borrowing a big amount of money to invest in highly risky financial assets. In doing so, they hoped to make much more than the cost of the borrowing, and they did it for a long while.26 However, in 2008, when the crisis occurred these financial investments turned out to be totally non marketable at a time when there was an urgent need to sell them in order to face the loan repayments. Forced to liquidate these risky assets, the universities had to take dramatic losses. The managers of endowments were well aware of the high level of risk but for them it was the price to pay to harvest spectacular returns year after year.27 Whatever their arguments, in 2009 there was no one to defend the Harvard and Yale investment model.

  • 28 The Chronicle of Higher Education, “College and University of Endowments, 2010-2011”, Th (...)
  • 29 Yale Financial Record, 2010-2011.
  • 30 Harvard University Financial Report, Fiscal Year 2011.
  • 31 Tamar Lewin, “Investment losses cause deep steep dip in university endowments” (...)
  • 32 Council for Aid to Education, Colleges and Universities raise $30.30 billion i (...)

10However, only two years after the 2008 financial crisis, endowments started to soar again. In 2010, Harvard endowment net assets increased by $4.5 billion to $32 billion, meaning an investment return of 21.4 %. Yale did even a little bit better with an investment yield of 22 %, carrying its endowment value to 19.4 billion. In two years the Harvard and Yale endowments managed to almost recover from their losses. And this is also true for the other elite universities, private or public, which all had positive returns on their endowment in 2010 and even better results in 2011 with an average investment yield of 18.7 % for the top 20 endowments and an amazing 28.4% return for the University of Virginia.28 This spectacular recovery was due in part to the flourishing year on the financial market but also to the generous increase of alumni donations towards their alma mater. In 2011, Yale completed a seven-year campaign of 3.9 billion in gifts whose initial goal was $3 billion and which was raised to $3.5 billion in 2008 to face the economic crisis.29 The same year, total donations at Harvard increased 7 % to $639 million representing the third highest total in the University’s history.30 Harvard’s 2011-fund-raising performance was beaten, the following year, by Stanford that managed to raise, for the first time in the history of American higher education, more than one billion dollars in less than a year.31 Research public universities fared also rather well in 2011. In the top 20 fundraising universities, which reported sharply higher giving in 2011, nine were public institutions.32 These nine universities managed to raise, only three years after the economic crisis, a yearly total of almost $3 billion that is to say around $330 million per institution.

11This resilience of top research universities to crises is not new. The fact that these elite universities have managed to survive over the years and to dominate the world of higher education is greatly due to the main features of philanthropic capitalism.

2. Philanthropic capitalism and the American model of higher education: the main features

  • 33 Andrew Carnegie, “The Gospel of Wealth,” North American Review, 1889, <https:/ (...)

12The first feature of philanthropic capitalism is the “gospel of wealth”. This concept, which draws on the philosophy of Social Darwinism, developed by Herbert Spencer and his American counterpart William Sumner, has been popularized by Andrew Carnegie in an essay published in 1889.33 The first main idea is that social inequality and the unequal repartition of wealth come from human nature and the law of competition, and even if it is “sometimes hard for the individual, it is best for the race, because it insures the survival of the fittest in every department”. The novelty of Carnegie’s essay, compared to the ideas of his time, is the solution he proposes as remedy to this inequality. Rich men, he says, have to distribute their wealth during their lives to benefit mankind. This principle that the man of wealth can bring to the service of his poorer brethren “his superior wisdom, experience and ability to administer, doing for them much better than they would do or could do for themselves” constitutes the bedrock of American philanthropic capitalism. It justifies the accumulation of wealth as long as rich people accept to voluntarily redistribute it and that it is believed that in doing so they will do a better job than the state.

  • 34 See Ernest Victor Hollis, Philanthropic Foundations and Higher Education, Columbia Unive (...)

13The second main feature of philanthropic capitalism is the gospel of efficiency. This principle very dear to Rockefeller and Carnegie but also to their “philanthrocrats” consisted in “giving to him that already had”, in order to reinforce the most promising institutions to make them even better. This concentration of giving to a few carefully chosen institutions was the philosophy of all the foundations of Rockefeller and Carnegie.34

  • 35 Guy Neave, “On incorporating the university”, Higher Education Policy, 2006.

14The third main feature, following in line with the first two ones, is the differentiation between institutions and the acceptance of a stratified world. As Guy Neave has underlined, institutional stratification and differentiation are salient features of mass higher education driven by competition.35

15These features are embedded characteristics of the American higher education funding model and they are as true today as they were yesterday. But how could they apply to the European higher education model ?

3. Can American philanthropic capitalism be an example for European higher education?

16The second volume of a report published by the OECD in 2009 and entitled Higher Education to 2030: globalisation, states that Universities are becoming or will become “disembedded” from their national context due to globalization and the intensification of transnational flows of people, information and resources and that the first area experiencing this potential for “disembedding” is funding. However, it is also noted that elite institutions are less affected by the “disembedding” process as they continue to be the national standard bearers of prestige and high quality. That is why, according to the authors of the Report, globalization has often had a greater impact on second-tier institutions which may have to merge or reorganize in order to address new forms of competition.

  • 36 Thomas Estermann and Enora Bennetot Pruvot, Financially Sustainable Universitie (...)

17In the course of this “disembedding” process which is taking place today in the different European higher education systems, two main features of the American system emerge, the gospel of efficiency and the acceptance of a stratified higher education world with a differentiation between institutions. However, the third feature “the Gospel of Wealth” is not yet part of the European higher education systems. Indeed, direct public funding continues to be the most important income source for universities in Europe, representing, on average, close to three quarters of an institution’s budget, as it is shown in a 2011 European University Association (EUA) publication on the financial sustainability of universities.36 In the same report, EUA calls for a diversification of the sources of income. For the authors, it is not very likely that public expenditure will grow sufficiently to allow universities to cover their rising costs. Developing additional funding streams has now become a necessity for European universities, according to the report, if they want to keep their competitiveness in the higher education global market.

  • 37 Congressional Budget Office. Trends in the Distribution of Household Income from 1979 to (...)
  • 38 Stanley Katz, “Philanthropy’s New Math”, The Chronicle of Higher Education, Fe (...)
  • 39 Thomas Schultz, “The Second Gilded Age: has America become an oligarchy,” The Spiegel, 2 (...)
  • 40 “In 1890, when for the first time, the federal census calculated the distribution of the (...)

18In this global competition, money has become the sinews of war and, in this search for money American elite universities are at the cutting edge. They are sustained by a philanthropic capitalism which despite the economic crisis has never been so powerful but also never so inequitable. In a report, released in 2008, the United Nation Development Program (UNDP) reported that in 2000 the world’s richest 1 % owned 40 % of the entire planet wealth and the richest 10 % of adults accounted for 85 % of the world total of global assets. The wealth of the three most well-to-do individuals exceeded the combined GDP of the 48 least developed countries. This growing inequality is particularly obvious in the United States. A very recent study by the nonpartisan Congressional Budget Office states that the top 1 % of American households saw their after-tax incomes grow by 275 % from 1979 to 2007.37 “This upward redistribution of wealth that began in the late 1970s has recently recreated almost the same concentration of wealth in the possession of top 1 % of the population as in 1929” remarks Stanley Katz, in an article which draws a parallel between the role of philanthropy today and in the Rockefeller and Carnegie era.38 Stanley Katz is not the only expert to have made this correlation; many observers have recently called this period “a second gilded age”39 in which inequality is even greater than it was at the time of the first gilded age.40

19This disparity of wealth has always greatly benefited philanthropy and, by the same token, elite universities, as the historical pattern of private philanthropy has always been to favor top research universities. It seems to be a feature of philanthropic capitalism that golden ages of wealth creation give rise to golden ages of philanthropy. By the middle of the twentieth century, the world had come to see the welfare state, not the generosity of the rich, as the means to solve the biggest problems facing society. Carnegie’s Gospel of Wealth seemed obsolete, and philanthropy an anachronism. This was particularly true in Europe. In the United States, however, despite a growing influence of the state, the alliance that was sealed between the philanthrocapitalists of the “first gilded age” and university presidents to work hand in hand to improve the higher education system has endured throughout the years. It has allowed American elite universities to diversify their sources of funding, to thrive even in periods of economic crisis and to dominate the world of globalized higher education.

  • 41 Joan Roelofs, “The Third Sector as a Protective Layer for Capitalism”, Monthly (...)

20Today, in this highly competitive world in which public money is in increasingly short supply the American model of philanthropic capitalism is gaining ground throughout Europe to finance public services. The exportation of this model, which according to some authors, like Professor Joan Roeloff, can be traced back to over a century,41 is a relatively new phenomenon in the higher education domain. We can therefore wonder whether European universities, and especially French universities which have always been nurtured by the idea of an almighty state, will accept the same alliance between philanthropy, capitalism and higher education as their American counterparts.

  • 42 Enora Bennetot Pruvot and Thomas Estermann, Define Thematic Report: Funding for Excellence, (...)
  • 43 A league of European Research Universities (LERU), which is a consortium of some of the m (...)

21To answer that question and as a conclusion we can say that predictions are often hazardous and it is particularly true concerning higher education. Indeed, not only has Patrick Moynihan’s 1974 provocative prediction saying that private universities would be incorporated into state systems been proven wrong but the reverse also occurred with public universities being progressively privatized in the last forty years. However, even if the state is still the major source of revenues for higher education in Europe, the 2008 economic crisis has tightened the squeeze of general public funding even more. We can also notice that fundamental features of the American model of higher education, such as the research of excellence by the concentration of funding and the creation of hierarchies between institutions, are already being implemented in most European countries.42 It, therefore, seems very likely that the leading European research universities,43 which need money more than other higher education institutions to be able to compete in this globalized world, won’t have any other choice in the coming years than to increase their private sources of revenue to complement the decrease of public funding and in doing so to adhere to philanthropic capitalism.

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MASSEYS-BERTONECHE Carole, « Impact de la politique du président Nixon sur les relations entre la Maison Blanche et les universités d’élite : la mise en place de la discrimination positive », Politeia, n°14, 2008.

MASSEYS-BERTONECHE Carole, Philanthropie et grandes universités privées américaines : Pouvoir et réseaux d’influence, Bordeaux : Presses Universitaires de Bordeaux, 2006.

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ROELOFS Joan, “The Third Sector as a Protective Layer for Capitalism”, Monthly Review, vol. 45, n°4, September 1995, <http://archive.monthlyreview.org/index.php/mr/article/view/MR-047-04-1995-08_2>, accessed in October 2015.

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STROUT Erin, “U. of Virginia unexpectedly opens $3-Billion Campaign to become a ‘Private’ Public University”, The Chronicle of Higher Education, Tuesday, June 25, 2004. <http://chronicle.com/article/U-of-Virginia-Unexpectedly/9589/>, accessed in October 2015.

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Notes

1 Philanthropic capitalism, as defined in this paper, differs from the concept of philanthrocapitalism that has been popularized by Matthew Bishop and Michael Green as the practice of applying business methods and measures to philanthropy. See Matthew Bishop and Michael Green, Philanthrocapitalism : How Giving can Save the World, New York, Bloomsbury Press, 2008.

2 Karl Barry, “Philanthropy and the Maintenance of Democratic Elites”, Minerva 35, 1997, 207.

3 To better understand the organization of the American Higher Education System, see The Chronicle of Higher Education, “2005 Carnegie Classification of Institutions of Higher Education,” The 2006-7 Almanac, vol.53, Issue 1, 35.

4 On the influence of Research Universities on American Higher Education, see Roger L. Geiger, To Advance Knowledge : The Growth of American Research Universities, 1900-1940, New York, Oxford University Press, 1986 and, from the same author, Research and Relevant Knowledge : American Research Universities since World War II, New York, Oxford University Press, 1993.

5 The for-profit institutions of higher education started to be created only in the 1970s. There are, therefore, not very many and none of them belongs to the top research universities.

6 The system of governance of American public universities is particularly complex and varies deeply from one state to the other. It is, therefore, impossible to do a general analysis for the whole higher education system. Hence, this paper focuses on the funding system of American universities rather than on their governance.

7 We have not mentioned income from auxiliary enterprises (e.g., athletics, dormitories, bookstores, meal services, and hospitals) because not all universities have these kinds of revenues.

8 See Carole Masseys-Bertonèche, Philanthropie et grandes universités privées américaines, PUB, 2006, 175, table 2.

9 See Carole Masseys-Bertonèche, « Impact de la politique du président Nixon sur les relations entre la Maison Blanche et les universités d’élite : la mise en place de la discrimination positive », Politeia, n°14, 2008.

10 See Carole Masseys-Bertonèche, Philanthropie et grandes universités privées américaines, PUB, 2006, 198-201.

11 Patrick Moynihan, “The Politics of Higher Education”, Daedalus vol.104, n°1, Winter 1975, 128-147, 146.

12 For a more detailed account on the evolution of the management of Harvard and Yale endowments, see Carole Masseys-Bertoneche, « Les réserves incommensurables des universités d’élite aux Etats-Unis », in Lionel Larré, Véronique Béghain, Jean-François Baillon, Paul Veyret, Paradoxes de la réserve, Climas, 2011, 215-227.

13 For more details on Yale endowment policy, see David Swensen, Pioneering Portfolio Management, New York, Free Press, 2000, Harvard Business School, “Yale University Investments office : July 2000”, Harvard Business School Case n°9-201-129, Boston, Harvard Business School Publishing, March 4, 2001.

14 Brian J. Hall, Jonathan P. Lim, Incentive Pay for Portfolio Managers at Harvard Management Company, Harvard Business School Publishing, March 27, 2002.

15 Ibid., 3.

16 Chronicle of Higher Education, “Colleges and universities endowments, 2006-2007”, The Chronicle of Higher Education, January, 10, 2015, <http://chronicle.com/premium/stats/endowments/results.php?offset=75&year=2008&sort=market&state=>, accessed in October 2014.

17 Chronicle of Higher Education, “Colleges and universities endowments, 2011-2012,” The Chronicle Almanac, 2012, <http://chronicle.com/article/CollegeUniversity/136933>, accessed in October 2015.

18 The Chronicle of Higher Education, “Voluntary Support of Higher Education 1999-2000”, The Chronicle of Higher Education, May 4, 2001, <http://chronicle.com/article/Voluntary-Support-of-Higher/32467/>, accessed in October 2015.

19 On the emergence of fund-raising at public universities, see Aaron Conley and Eugene R. Tempel, “Philanthropy,” in Douglas M. Priest and Edward P. St. John, Privatization and Public Universities, Indiana University Press, 2006.

20 Between 1978 and 1998 direct state appropriations as a portion of the total revenue of public universities declined by nearly 25 percent, see James J. Duderstadt and Farris W. Womack, Beyond the Crossroads: The Future of the Public University in America, The Johns Hopkins University Press, 2003, 103.

21 Erin Strout, “U. of Virginia unexpectledly opens $3-Billion Campaign to become a ‘Private’ Public University,” The Chronicle of Higher Education, Tuesday, June 25, 2004, <http://chronicle.com/article/U-of-Virginia-Unexpectedly/9589/>, accessed in October 2015.

22 Quoted in Priest and John, op. cit., 158.

23 “We used to be state-supported, then state-assisted, and now we are state-located,” explained Dr. James Duderstadt, former president of the University of Michigan, in David Breneman, “The privatization of public university: mistake or model ?” The Chronicle of Higher Education, March 7, 1997, <http://chronicle.com/article/For-Colleges-This-Is-Not-Just/27351/>, accessed in October 2015.

24 Harvard University Financial Report, Fiscal Year 2009.

25 Tamar Lewin, “Investment losses cause deep steep dip in university endowments”, New York Times, January 28, 2010, <http://www.nytimes.com/2010/01/28/education/28endow.html?_r=0>, accessed in October 2015.

26 Bernard Condon and Nathan VARDI, “How Harvard’s investing Superstars crashed: when genius fails it fails big”, Forbes, February 20, 2009, <http://www.forbes.com/2009/02/20/harvard-endowment-failed-business_harvard.html>, accessed in October 2015.

27 Chrystia Freeland, “Lunch with the FT : David Swensen”, Financial Times, October 8, 2009, <http://www.ft.com/cms/s/0/dd91a3ec-b461-11de-bec8-00144feab49a.html>, accessed in October 2015.

28 The Chronicle of Higher Education, “College and University of Endowments, 2010-2011”, The Chronicle of Higher Education, January 10, 2015, <http://chronicle.com/premium/stats/endowments/results.php?offset=0&year=2012&sort=market&state=>, accessed in October 2014.

29 Yale Financial Record, 2010-2011.

30 Harvard University Financial Report, Fiscal Year 2011.

31 Tamar Lewin, “Investment losses cause deep steep dip in university endowments”, New York Times, January 28, 2010. <http://www.nytimes.com/2010/01/28/education/28endow.html?_r=0>, accessed in October 2015.

32 Council for Aid to Education, Colleges and Universities raise $30.30 billion in 2011, Council for Aid to Education Press, February 15, 2012, <http://www.cae.org>, accessed in October 2015.

33 Andrew Carnegie, “The Gospel of Wealth,” North American Review, 1889, <https://www.carnegie.org/media/filer_public/ab/c9/abc9fb4b-dc86-4ce8-ae31-a983b9a326ed/ccny_essay_1889_thegospelofwealth.pdf>, accessed in October 2015.

34 See Ernest Victor Hollis, Philanthropic Foundations and Higher Education, Columbia University Press, 1938, 42.

35 Guy Neave, “On incorporating the university”, Higher Education Policy, 2006.

36 Thomas Estermann and Enora Bennetot Pruvot, Financially Sustainable Universities II : European universities diversifying income streams, EUA publications, 2011.

37 Congressional Budget Office. Trends in the Distribution of Household Income from 1979 to 2007, October 2011, <http://cbo.gov/doc.cfm?index=12485>, accessed in October 2015.

38 Stanley Katz, “Philanthropy’s New Math”, The Chronicle of Higher Education, February 2, 2007, <http://chronicle.com/weekly/v53/i22/22b00601.htm>, accessed in October 2015.

39 Thomas Schultz, “The Second Gilded Age: has America become an oligarchy,” The Spiegel, 28 October 2011, <http://www.spiegel.de/international/spiegel/0,1518,793896,00.html>, accessed in October 2015; Larry M. Bartels, Unequal Democray: the political economy of the new Gilded Age, Princeton University Press, 2008; Louis Uchitelle, “The Richest of the Rich, Proud of a New Gilded Age”, The New York Times, July 15, 2007.

40 “In 1890, when for the first time, the federal census calculated the distribution of the nation’s wealth, they found that 71 % of the nation’s wealth was held by 9 % of American families”, Ellen C. Lageman, Private Power for the Public Good : A History of the Carnegie Foundation for the Advancement of Teaching, Wesleyan University Press, 1983, 13.

41 Joan Roelofs, “The Third Sector as a Protective Layer for Capitalism”, Monthly Review, vol. 45, n°4, September 1995, <http://archive.monthlyreview.org/index.php/mr/article/view/MR-047-04-1995-08_2>, accessed in October 2015.

42 Enora Bennetot Pruvot and Thomas Estermann, Define Thematic Report: Funding for Excellence, European University Association, December 2014, <http://www.eua.be/Libraries/Publication/DEFINE_Funding_for_Excellence.sflb.ashx>, accessed in January 2015.

43 A league of European Research Universities (LERU), which is a consortium of some of the most renowned research universities in Europe, was founded in 2002 on the model of the Ivy League universities. In 2010, it expanded its membership to 21 universities. For more information, see : <http://www.leru.org/index.php/public/home/>, accessed in October 2015.

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Carole Masseys-Bertonèche, « Philanthropic Capitalism and the American Funding Model of Higher Education: An Example for Europe? », Revue LISA/LISA e-journal [En ligne], vol. XIV-n°1 | 2016, mis en ligne le 23 février 2016, consulté le 26 septembre 2017. URL : http://lisa.revues.org/8846 ; DOI : 10.4000/lisa.8846

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Carole Masseys-Bertonèche

Carole Masseys-Bertonèche est maître de Conférences à l’Université de Bordeaux. Ses domaines de recherche sont le secteur non lucratif, la philanthropie et l’enseignement supérieur aux États-Unis. Elle travaille plus particulièrement sur le rôle du réseau philanthropique dans le fonctionnement des universités américaines. Après avoir centré son travail de recherche sur les États-Unis, elle a évolué ces dernières années vers une vision comparatiste entre les États-Unis et l’Europe.

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