A new Government initiative to help generate endowments for UK Universities has been officially launched today, with £200m set aside to add a bonus to donations received. Universities will receive £1 for every £2 they raise.
Imperial has high hopes of raising a large sum of money from alumni in its Centenary year, but there is a risk of peaking too soon: the scheme only comes into effect from 2008 and will run for three years. Ironically, a briefing from the Prime Minister's Strategy Unit names Imperial (alongside LSE) as one of the "world class" institutions with endowments of less than £50m, even though it will be disadvantaged by starting the scheme next year instead of now. Imperial's endowment fund is growing dramatically, with a target of £300m over the next few years through investment and donations.
£200m across nearly 150 Higher Education Institutions is not a great deal, particularly as the extra grant to each institution will be capped, in order to prevent the money being sent to just a few Universities. At the end of the first three years money set aside for institutions which have not met their cap will be returned to the funding pool for re-allocation to those which have raised more than their cap.
The NUS, of which Imperial College Union is now a member, has greeted the move with caution, sending the message that a US-based system with large endowments and large fees is not appropriate for the UK.