Chinese Colleges Need More Endowment

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【Abstract】In this paper I talk about the importance of increased college endowments. First I will introduce the limited financial situation of current chinese colleges. Second， I will present an analysis on the financial reports of STU and Yale. Thirdly， I will describe the current Chinese College endowment situation. In conclusion I will present four suggestions for enhancing current Chinese college endowments.

【Keywords】Endowment；Chinese；College；Finance

1.The General Financial Situation in Chinese Colleges

Since 1999， China began to dramatically expand its higher education system through larger student body size and rapidly increasing number of learning institutions. In 1978， all China only had 598 colleges， while in 1999 number became 1071. Over the next four years the number of colleges in China increased 50%. By 2006， China had 1967 public colleges and 994 private colleges.

The number of students in college in 1998 was 3.41 million and rose to 7.19 million in 2001. Considering the fact that it took six years for the number of students to rise from 2 million to 3 million during the years of 1990-1996， the recent jump in attendance is rising rapidly. China had 4.134 million students in college in 1999 but the number rose to 17.388 million by 2006. Student enrollment had increased four times in seven years.

In 1990 less than 4% of the 18-22 age group enrolled as students in higher education institutions as compared to 22% in 2005. That means one fourth of the 18-22 age people can enter college. The enrolment rate of higher education in China went from 4% to 22% in only 16 years. The amazing growth rate brought not only surprises but additional problems. Providing adequate financial support is one of them.

In 1999， Chinese government had invested 29.77 billions RMB in colleges. The number in 2000 was 40.65 billion RMB and the next year it was 49.02 billion. By 2002 the government had invested 55.81 billion. The amount had increased to 63.99 billion in 2003 and 102.04 billion RMB by 2006.

2. Analysis of Shantou University and Yale Financial Reports in 2006

The Shantou University financial report of 2006 can tell us that with increased endowments， higher learning institutions function more efficiently.

Shantou University （STU）， located in Shantou City， Guangdong Province， the government investments made up 29% of their entire income. Tuition and fees only allowed for 20%. The main income for STU was from the Li Ka Shing Foundation endowment which was 156，718 thousand RMB. The endowment in 2005 was 188，408 thousand RMB which made of 46% of the total revenue. In 2004 is was 42.8%， 2003 and 2002 the amount was 41.2 % and 37.6% respectively. In China， STU is a typical university that uses endowment money to support higher education. Li Ka Shing is the wealthiest Chinese man in the world， thusly he devoted large amounts of money through his foundation to improve the health and educational systems in China.

In China， STU is one of the few colleges that is relatively debt free. This tells us that with a strong and stable support system of regular endowments， government investments and the college itself having an organized system of financial management， Chinese public colleges can solve their fiscal short comings including large debts.

STU has a clean， fair and highly efficient financial management system set up which provides a basic premise for any educational foundation world wide to donate. STU has a long tradition of endowments received for the school due to the exceptional donating culture of it’s graduates.

3.The Endowment Situation in Chinese Higher Learning Institutions

In September of 2006， Zhejiang University Education Foundation received 40 million USD donations from its alumni which is the largest money donation so far received by a Chinese college. Zhejiang University Education Foundation is a private foundation at a national level. All the donations received are used for educational and scientific research， introducing talent and providing for overseas exchanges， fundamental campus construction projects， scholarships， student activities and much more.

Peking University has also started a donation program. The Peking University Education Foundation （USA） is one of the most successful donation programs registered in the United States. All foundation money will be spent on the programs relevant to the educational undertakings of the University. The Peking University Education Foundation （USA） has seen a large increase in the total sum of donations granted to the foundation in 2007. The number of projects funded also continues to grow steadily. By December 31st， PKUEF （USA） acquired a total of 3，268，800 USD in donations from 214 gifts with a growth of 84.9% in donation total and a growth of 11.5% in donor numbers from 2006. Among those individual donations reaching $1，000； alumni contributed 35 donations， 70% of the total.

Tsinghua University and Xiamen University are examples of Chinese schools that have similar donation foundations.

4.What Should We Do to Enhance Endowment to Chinese Colleges

1.1The government’s work is a key factor to the development of endowment

The key step to promote the endowment in higher education in China is the legislation. Now the whole society needs a specific law on the endowment to colleges. The government first job is to establish a law on this affair. To make sure the obligation and rights of the donators and the colleges， even some specific regulations are also necessary. With a legal protection， the endowment in China will surely enjoy a better improvement.

In the taxation， government must give more support to the colleges and donators. Tax reduction， tax free and other policies are very helpful and necessary to the endowment in Chinese colleges. Only the colleges and donators acquire the real permissions and support from the government and society can the endowment be truly accepted and well grown. In taxation， government needs to do more to guide and support endowment to facilitate Chinese higher education.

1.2 The whole civic responsibility

Higher education benefits the whole society. Colleges， institutes and universities provided countless high quality professionals to the society. With those professionals， Chinese enterprises can restore their strength， survive and battle in the cruel international competition. Our enterprises should do more to help our education， our colleges， which can bring an even more repay to our enterprises and our society. Funding a relative college to acquire mental or high tech support is a good choice for some enterprises. That actually is double-win cooperation.

1.3 Colleges have a lot work to do to promote the affairs

Right now， Chinese colleges have too much work to do， even in some top universities. The first job is in mind. We Chinese colleges must realize that the endowment is a very important resource to fund the colleges operation and development. Continue to open our mind， to free our mind， to realize the importance of endowment is just the beginning of colleges’ jobs. Specific administration is necessary. Professional staff and offices is a basic step to improve it. Of course， the training to the staff is necessary.

5.Conclusion

Now Chinese higher education develops so fast that we need more funding-support to the colleges. Shantou University and Yale University provide an excellent example for us. That is we must pay more attention on the endowment which is an important resource to help our higher education. Our government and our colleges have too many things to do to guide the whole society， to provide legal protection， to set necessary surroundings， to build an donating culture etc. If we do the work correctly and properly， Chinese higher education surely will go up to a new higher stage.

References：

[1]Thierry Chevalier and Jean Claude Eicher Higher Education Funding： A Decade of Changes[J].Higher Education in Europe， Vol VXⅡ

[2]Xin Wang， A Policy Analysis of the Financing of Higher Education in China： Two Decades Reviewed[J].Journal of higher Education Policy and Management， Vol 23， No. 2： 205-217.

[3]Chen Guowei， The Compare of Higher Education Funding Resource in China and in US.Journal of Guangxi Financial Research.

[4]U.S.Department of Education National Center for Education Statistics.Digest of Education. http：//www.ed.gov.1999-03-20.