Improved tax breaks should be offered to those making donations to universities and other charities, a government task force on fundraising will propose next week.
The long-awaited report on how the country's universities might enhance their endowments will call for tax rules to be simplified to offer incentives to those giving to higher education, as well as to those receiving donations.
Under the government's current gift aid scheme, charities can claim back basic-rate tax on gifts, and higher rate taxpayers can claim back the high rate element of tax on the value of their donation.
But one task group member, Sir Peter Lampl, the millionaire financier who has donated millions to underprivileged youngsters, has argued that this should be replaced by a system that gives all the benefit to the donor.
During a visit to the US, the Higher Education Endowment Task Force was impressed with the country's tax incentive system, where nearly 2 per cent of all income goes to charities, with universities among the main beneficiaries.
The task force will also call for a cultural shift in how universities attract donations from alumni and corporate sponsors and other sources - following the example set by US institutions.
The report will highlight the central role of vice-chancellors and chancellors in establishing a fundraising culture in British universities.
"One key message in the report is that if the leader is not right behind fundraising efforts, you are not going to get anywhere," said one member of the task force, which has been told not to speak to the media ahead of next week's launch.
The report is also expected to recommend:
- More government investment in universities' fundraising offices, to strengthen and professionalise fundraising drives
- A model for the government to match donations made to universities from the public purse, as mooted in the January 2003 white paper on higher education.
The task group, chaired by Eric Thomas, Bristol University vice-chancellor, was set up last year to "encourage institutions and potential donors to promote the existing incentives for individual and corporate donation and to encourage change in university and individual behaviour".
The white paper says that accumulating large endowment funds should become "the way forward" for British universities, so they become less dependent on government funding. But it warns that while institutions would be expected to find money to fund student bursaries if top-up fees were introduced, they lack the fundraising culture and expertise of their American counterparts.
It says that at Harvard University an $18 billion (£10 billion) endowment fund pays for $100 million a year on financial support for students. This compares with Oxford University's endowment fund of about £2 billion.
Task group member Sir Peter is chairman of the Sutton Trust. A report from the trust last year warned that the best endowed UK universities, Oxford and Cambridge, would come 15th in a league table of US institutions, while the next best endowed - Edinburgh - would come 150th with its £160 million endowment.