Vowing to address the University of Cambridge’s financial difficulties, former Yale Provost Alison Richard was installed Wednesday as the 344th Vice-Chancellor of the prestigious British university.

Richard, who was tapped for the school’s chief administrative position 10 months ago, faces the challenges of cuts in government funding, an increasing university deficit and an expanding student body. Members of the Cambridge community and outside observers said they hope the formidable fund-raiser and financial manager can ensure that Cambridge, which has far fewer fiscal resources than many comparable American institutions, maintains its place among the world’s top universities.

In her inaugural address Wednesday, Richard recognized that Cambridge’s deficit will be one of her priorities.

“The university is running a modest deficit, which is currently projected to grow,” she said. “We have to wrestle this to the ground, support better what we are already doing and make room for new investments.”

Cambridge’s financial woes stem in part from a long-standing tradition of governmental support for higher education in Great Britain. In recent years, the British government has reduced funding for education per student, forcing institutions like Cambridge to look for nontraditional means of support.

Peter Agar, director of development at Cambridge, said one of Richard’s goals is to shift the focus of fund raising toward greater alumni giving.

“We have to get a lot more involved in keeping alumni connected to the university,” Agar said. “We need to communicate our needs and financial position much more clearly [to potential alumni donors].”

But even soliciting alumni donations may prove difficult for Richard, herself a Cambridge alum, because fund raising at Cambridge centers around the university’s 31 different colleges rather than around the institution as a whole, said Yale economics professor Timothy Guinnane, who spent the 2002-03 academic year as a fellow at Cambridge.

“The Cambridge colleges own and control most of the endowment, and the university itself has a relatively small endowment,” Guinnane said. “Some of the colleges are very wealthy, but most are not. Colleges can and do share their wealth, but many worthy goals are starved for funds because no college will support them, and the university lacks the funds to do so on its own.”

Agar said Richard does not appear uncomfortable with fund raising at a university-wide level. He said Richard actually seemed quite at home a few days ago during an alumni weekend, even though she had not yet officially assumed her position.

“Richard made a special effort to participate in the weekend, while still unpacking,” Agar said. “That in itself demonstrated that she was very committed to this and to meet as many alumni as possible.”

Cambridge officials had already begun to consider other means of increasing revenue before Richard arrived. Agar said one possible option was to increase tuition, should the British Parliament pass a bill increasing the maximum permitted tuition to 3,000 pounds, or approximately $5,000.

Susan Hockfield, Richard’s successor as Yale’s provost, praised Richard’s accomplishments during her tenure at Yale.

“[Yale’s] finances when [Richard] became provost were nowhere near as good as when she left,” Hockfield said. “[Richard’s appointment at Cambridge] is an extraordinary opportunity on both sides.”

Richard will face nonfinancial challenges as well, as she deals with a growing and increasingly diverse student body. Richards said in her inaugural address that Cambridge must fully welcome every enrolled student.

“I believe a diverse university is richer and more interesting than one that is homogeneous, and I also believe it is morally incumbent on us to do everything within our power to open the doors of this university to the most qualified scholars and students, regardless of gender, socioeconomic background or ancestry,” Richard said. “We work hard at this already, but there is more to do and we need to keep our ambitions bold and our energies high.”

Many of the changes Richard proposes may be controversial, but this will not deter her from implementing change, Agar said.

“[Richard] said she would much prefer to work somewhere where people get heated, because that means they really care,” Agar said.