Over the last few decades, performance-based funding models of universities have been introduced and have made universities build and implement different strategies to enable them to compete and be viable in changing circumstances. In turn, national governments are focused on providing universities with more opportunities to run efficient programmes that advance higher education. This paper includes a detailed review of various taxonomies for structuring university. More importantly, it develops a typology of higher education institutions that is relevant for the Russian context. The Ward method is used to cluster universities on the basis of university distinctions in terms of the availability of resources, education, and research and development. This typology of universities is verified by assessing their efficiency score gained from modified Data Envelopment Analysis, incorporating universities' heterogeneity. Finally, the paper gives a decision tree for classifying universities bearing in mind their diversity. It might be expanded for a broader set of inputs and outputs, namely external projectbased research funding modes and cooperation between universities and industry to pursue the development of innovation. The results can be used for shaping targeted policies aimed at particular university groups.