Functional differentiation of higher education institutions has long been discussed in Japan. Implicitly, it has been argued against a background of the problem of resource constraints. If there are resource restrictions, duplication of functions among various institutions is considered problematic. However, when discussing functional differentiation, the difference of financial bases among different institutions of higher education has been rarely examined in detail. We should consider how financial resources are distributed unevenly among higher education institutions. In this study we take the US higher education system as an example in order to better understand the relationship between the functional differentiation and financial basis of higher education institutions. The US higher education system is comprised of a great diversity of higher education institutions, differentiated further into various types of institutions. Fortunately, the “Carnegie Classification of Institutions of Higher Education” is very useful. Moreover, the IPEDS (Integrated Postsecondary Education Data System) provides the financial data that enables comparison of higher education institutions. In this article (part1) we examined where financial resources are unevenly distributed among various institutions of higher education. We focused on the difference between public, private, and forprofit institutions, and the difference of the institutional types as defined by the Carnegie Classification of Institutions of Higher Education. One result found that more than 60% of the total income of institutions of higher education is concentrated on the “Doctoral Universities”, although the number of institutions is relatively small. This is due to the large scale of student numbers and the high cost per student for doctoral programs. Endowment assets are also concentrated in the “Doctoral Universities”, as well as in the private “Baccalaureate Colleges”. This uneven distribution of financial resources among institutions and the factors behind the uneven distribution are discussed.