Indian universities launching endowments face bumpy start

Academics expect a bumpy start – and a steep learning curve – for Indian universities that are starting to raise endowments to support their activities.

Indian media have reported that several central universities have begun creating endowment funds, following 2022 guidance from New Delhi that encouraged institutions to be more self-reliant amid cuts to government support.

Scholars believed that even as institutions appear likely to become more dependent on self-generated funding, many will need to start from scratch, without a culture of giving or the know-how of managing an endowment.

Although some prominent public institutions – including a few Indian Institutes of Technology – have endowments, most Indian central universities have no experience of what it takes to build these funds to generate a return on investments, said Shahid Jameel, a professor at the Oxford Centre for Islamic Studies and former chief executive of the Wellcome Trust-DBT India Alliance.

“While philanthropy-based funding is not new to prominent Indian institutions, organised donations, especially endowments, are an emerging trend,” he said.

He expected universities new to this to face “a lag phase” in getting operations running. “Most don’t have adequate structures for money management. But they will get there.”

“There will of course be a learning curve,” agreed Sriram Ramaswamy, professor of physics at the Indian Institute of Science.

But he said that successful examples of endowments already exist in the Indian context. A couple of institutions, Aligarh Muslim University and Banaras Hindu University, got their start through large philanthropic contributions.

“I think alumni and general philanthropists in India are interested in donating to institutions that they hold in high regard,” Professor Ramaswamy said.

He noted that there are other ways of enticing alumni or philanthropists to donate money, with many universities having privately endowed professorships, such as the Palit chair of physics at the University of Calcutta.

Rafiq Dossani, director of the Rand Center for Asia Pacific Policy, agreed.

“Usually, donors prefer to donate towards infrastructure because they get their name on the building. There are creative ways around it, such as naming faculty, chairs and even departments,” he said.

But Professor Dossani, who was previously involved in fundraising at Stanford University, cautioned that raising money is as much “a science as it is an art”, with a few years needed to convince each potential big donor.

“One needs to have campaign material, knowledge about the alumni’s interests, a hit list of the top 200 alumni, support from the vice-chancellor…student involvement…and well-paid dedicated head of development.”

Still, he was optimistic that central universities, which have hundreds – and potentially thousands – of “well-settled alumni” who remember their university years with “great fondness”, could tap into this resource.

“There is no reason to expect that alumni in India will be less generous than [those in] the United States. In fact, it should be the other way around since a donor could finance the same infrastructure much more cheaply in India.”

Philip Altbach, professor of higher education at Boston College, agreed that Indian universities have a promising potential donor base. But he predicted that they would have an uphill battle, with most lacking detailed records of their alumni.

Another issue is lack of trained staff. At his own institution – a college of 16,000 students that has an endowment of $3.7 billion (£2.9 billion) – a full-time staff of more than 100 are engaged in fundraising.

“It takes money, and expertise, to earn money,” Professor Altbach said. “That means that a university will need to have staff and expertise and data to raise funds. Most Indian universities have none of these things.”

pola.lem@timeshighereducation.com