Investment practices of endowment funds in higher education: lessons for the developing world
1. Introduction Public funding of higher education has been a very important issue in economically developing countries. As one of the ways to institute social mobility, education and especially higher education is a central public policy agenda. However, in the last two decades or so, public deb...
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| Main Authors: | , |
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| Format: | Conference or Workshop Item |
| Language: | English |
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Centre for Islamic Economics (CIE) Kulliyyah of Economics and Management Sciences (KENMS), International Islamic University Malaysia (IIUM)
2016
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| Online Access: | http://irep.iium.edu.my/67445/1/67445_Investment%20Practices%20of%20Endowment%20Funds.pdf http://irep.iium.edu.my/67445/ |
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| Summary: | 1. Introduction
Public funding of higher education has been a very important issue in economically developing
countries. As one of the ways to institute social mobility, education and especially higher education
is a central public policy agenda. However, in the last two decades or so, public debt levels as well
as increasing demands for public funding have required alternative sources of funds. The private
sector has played a role and there is a significant presence of private higher education institutions
in most, if not all countries with many successful examples that one could cite. However, seen as
a ‘public good’ and as an effective means of social mobility and development, ‘profit motivated
private higher education’ raises many challenges such as its costs and access. While mainstream
economics posit a public-private conflict model, a three sector model that has a positivecomplimentary
role for the not-for-profit or voluntary sector offers not only an economically viable
alternative, but an ethically superior one.
In the context of higher education, the role of foundations and endowment funds in particular has
become the focus of attention for researchers. Historically, foundations and endowments were
always related to universities. This tradition has actually continued throughout the decades, albeit
in a lesser degree. Foundations and endowments have always been a significant source of funding
for scholarships, professorships, academic programs, scientific researches, and other operational
activities in universities. In many cases, a significant portion of universities’ operating budget is
financed through endowment funds. For instance, as the largest university endowment fund in the
US and Canada, Harvard University covered its operating expenses by 36% from its endowment
fund (Harvard Financial Report, 2013). |
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