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

Abstract

Capitalism 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. Since 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, which have always set an example for other educational institutions in the United Sates as well as in the other countries of the world. 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.