Indian Institute of Management (IIM) Ahmedabad on Tuesday launched an endowment fund similar to foreign universities with an initial commitment of Rs 100 crore from its alumni.
The institute is the first among the IIMs to start such a fund. IIM Ahmedabad aims to raise endowment funds of Rs 1,000 crore over the next five years, according to a release.
The funds will be kept as a corpus and the interest accrued will be spent on the growth of the institute.
Since its inception in 1961, IIM Ahmedabad has produced over 33,000 alumni who are well placed in the corporate world.
The alumni members who have made a commitment to contribute to the endowment fund are Sandeep Singhal and Kavita Iyer, co-founder of WestBridge Capital, Sanjeev Bikhchandani, founder and executive vice-chairman, InfoEdge, Deep Kalra, founder and group CEO, Makemytrip, Ramesh Mangaleswaran and Meenakshi Ramesh, senior partners, McKinsey and Company, Kuldeep Jain, founder, Cleanmax Enviro Energy Solutions, V.T. Bharadwaj, co-founder, A91 Partners, Peeyush Misra, partner, Growth Source Financial Technologies, G.V. Ravishankar, managing director, Sequoia Capital India, Arun Duggal, chairman, ICRA and S.K. Jain, co-founder of WestBridge Capital.
Prof. Rakesh Basant, dean alumni and external relations, said the institute is yet to decide on any specific project or area for which the funds would be utilised.
“There will be a board comprising alumni representatives and members from the institute. This board will decide the areas on which the funds will be utilised. The donors can also specify any particular purpose they want the money to be used. The board will examine the proposals,” he said.
The practice of having an endowment fund is a recent phenomenon among Indian institutes. IIT Delhi started its endowment fund last year with a donation commitment of Rs 255 crore from its alumni.
However, foreign universities started endowment funds long ago and are dependent on them for spending on scholarship, research projects and other development activities.
Among the Ivy League universities, Harvard University has the highest endowment fund of $39 billion followed by Yale ($29 billion), Stanford ($26 billion), Princeton ($25 billion) and Massachusetts Institute of Technology ($16 billion).
According to the Harvard University website, the university spent $1.9 billion of its endowment fund on operating expenses in the 2019 fiscal. The contribution from the endowment fund amounted to 35 per cent of its operating expenses.
