During the past fifteen years, the rapid expansion of higher education in Taiwan has reduced the government's allocated budget for each university, which consequently has affected the improvement of the quality of universities. In the current situation, with a limitation on the increase of both government support and tuition, it is crucial for both public and private universities to construct a more diversified financial framework for the sake of future management. This paper discusses the following issues: (1) the current status of financial reform in American and British universities in recent years; (2) the outcomes of the university fund initiative, implemented by public and private universities since 1995, and its influence on the government and universities; (3) the question of whether public and private universities can increase their budgets and improve the quality of universities by pursuing profit; (4) the question of whether the pursuit of profit weakens academic values or creates a win-win situation; (5) the problem of maintaining a balance between ideals and reality in higher education.