The donation - which will ultimately amount to around ?26 million - was made by Mica Ertegun, a renowned interior designer and the widow of Atlantic Records founder Ahmet Ertegun. Expected eventually to create at least 35 scholarships for humanities graduates at Oxford every year, the gift is the most generous for the study of the humanities in the institution's 900-year history.
However, some observers fear that cuts to universities' public funding will mean that only elite institutions with access to substantial donations and endowment income will be able to fully support postgraduate provision.
Postgraduates are not able to access the publicly subsidised student loans system. A recent report from the 1994 Group of smaller research-intensive universities warned of the dire consequences for postgraduate provision across the sector if future students, laden with debt from higher undergraduate fees, were not offered support for postgraduate fees.
Shearer West, head of humanities at Oxford, said the donation, which will fund master's and research students, would enable it to expand the number of fully funded scholarships for postgraduates in the humanities, a key factor in helping to attract the best applicants.
"Every year we lose outstanding students, particularly to the Ivy League, because we are not able to give enough fully funded scholarships," Professor West said. "It will help people around the world realise that there is a possibility for them to come to Oxford that they may not have had before."
Ms Ertegun said the humanities had helped transform her life and that of her late husband. "My dream is that one day, Ertegun scholars will be leaders in every field - as historians and philosophers, as archaeologists and literary scholars, as writers and composers, as statesmen and theologians," she said.
On postgraduate provision across the sector, Geoff Whitty, professor of public sector policy and management at the University of Bath, said that if the government failed to address the issue of postgraduate funding, subjects lacking obvious financial returns for individuals would suffer.
"The government has to confront the threat to provision where there is less incentive for individuals or employers to contribute," he said. "Donations will not solve that issue."
Malcolm McCrae, former chair of the UK Council for Graduate Education, said that without offering home postgraduates a way to fund their studies, there was a risk that the "bottom will fall out of the market", with less well-funded universities cutting provision first.
But Professor West said that while there was clearly concern about postgraduate funding, the Ertegun programme should be celebrated: "This is a sign that the humanities is a very healthy and important set of disciplines that transform people's lives, and people are willing to give very large sums for its sustainability."