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How to fund a European university

These are tough times for Europe’s 5,000 or so universities. As public funding is slashed as a result of the financial downturn, universities must now look elsewhere to galvanise their financial security (see Nature’s coverage of the financial crisis).

A report published today from the European Universities Association, a group representing EU universities, assesses how institutions are currently financed and recommends where they should look to in the future for funding.

Currently, universities receive the lion’s share (75% on average) of their funding from the public purse, the study found. But institutions are beginning to diversify, and many receive at least 10% of their income from other sources, excluding tuition fees, it says. For example, business contracts provide 6.5% of their income, and philanthropic funding makes up 4.5% of their budgets.


The study involved an online survey of 150 universities across 27 countries, and also included site visits and workshops at numerous other institutions.

Tuition fees vary widely across EU institutions, but on average they contribute 9% to university income. The report suggests that student financial contributions will in future provide a larger income stream for universities, and “will continue to be at the heart of the debate around funding models for higher education in the coming years”.

A lack of institutional authority is hindering universities’ from generating additional income, the report finds. “Universities that can enter into partnerships with private partners, have the ability to create for-profit entities, or that can borrow money on the financial markets, will be more successful in pursuing additional funding,” it says.

But, the study concludes, institutions will continue to depend on public funding in the long run. Private sources of funding “remain limited in scope and their growth often requires important upfront investments,” it says.

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