The development of university foundations in China

Abstract

University foundations in China have existed for less than 30 years. As of December 2017, less than 20% of Chinese universities (525 foundations) had registered a foundation. Considering the scarcity of reports on this topic, the increasing importance, and the difficulty in accessing specific data, this study identified Chinese foundation characteristics, confirmed factors that predict total contribution amounts, and presented a comparative case study between a representative Chinese and a representative U.S. university foundation.The study utilized a mixed method to optimize results: descriptive analysis, document analysis, interview analysis, multiple linear regression, and the Dupont equation. Descriptive and interview analyses were applied to 42 “World First-Class Universities” foundations in China, and a document analysis selected pertinent items from annual foundation statements. A multiple linear regression model revealed that a total contribution amount is positively predicted by the following factors: number of full-time staff, number of graduate students, a higher university ranking (top-ranked), and foundation longevity. A comparative case study revealed a very small operation expense ratio for a Chinese foundation versus a U.S. counterpart. The Dupont equation and other financial analyses indicated that Chinese foundations have had a lower return on investment (ROI), a lower return on total revenue, and a lower change in net assets (net profits) due to their conservative investment portfolios. It is suggested to establish a shared dataset of Chinese foundations for data accessibility. Chinese foundations are recommended to cover their own operation expenses to generate accurate metrics and improve data transparency. Their investment portfolios could be more diversified to elevate return rate. This exploratory study serves as reference material for future research.