NEW DELHI: Indian Institute of Management in Ahmedabad (IIM-A) on Tuesday launched an endowment fund, with an initial commitment of ₹100 crore by its alumni. The fund plans to raise ₹1,000 crore over the next five years and is a first of its kind by an IIM.
Ten alumni founders, including Sandeep Singhal, co-founder, WestBridge Capital; Sanjeev Bikhchandani, founder, Info Edge; Deep Kalra, founder, MakeMyTrip, have committed to the fund.
The elite B-School said it hopes have more people contributing to the endowment corpus via funds, wills, equities and other means. The move, it said, will help in taking IIM-A to the next level in research, strategic initiatives, and innovative projects.
"It took us three to four months to decide and put in place a structure. We are ready with ₹100 crore and from there the target is to get to ₹1,000 crore in the next five years. And all of us are going to reach out to as many alumni as possible, not only for live contribution but also for small contributions," said Singhal, an alumni of IIM-A, who is also helping IIT-Delhi with its endowment initiative.
Errol D’Souza, director of IIM-A, said it was important to get the structure of the endowment fund right so that a large number of participants can be brought in. The idea is to make it available as a vehicle for the growth of the institute, D.Souza said over a video call from Ahmedabad.
"Alumni are a source of strength. While they have contributed in many ways to support the Institute’s priorities, the endowment corpus will be impactful as we expect it to emerge as an important source to support key strategic initiatives and innovative projects. Such a critical funding support has been missing for most Indian educational institutions and we are happy to create a benchmark," said D.Souza.
Rakesh Basant, dean at IIM-A, said the transparent structure of the fund will help IIM-A engage more actively with its alumni and will also help the Institute deliver greater value through contemporary, high quality teaching and research.
Endowment funds are a big source of income for top global universities who use a portion of it for development work and for students' scholarship. For example, Harvard University has an endowment corpus of over $39 billion and Stanford has an endowment corpus of over $27 billion.
When asked if the funds can be used for paying back the government a portion of loans institutions take from the higher education financing authority (HEFA), D’Souza said IIM-A has not yet availed any HEFA loan but the endowment fund “does not foreclose the fund from actually being used for any purposes".
"One of the main ideas of the fact is that some part of it will be actually unencumbered and be used for whatever growth purposes or thought to be important for the furtherance of the goals of the Institute," said the director.
Other contributors to the IIM-A endowment fund include GV Ravishankar, managing director, Sequoia Capital India, Ramesh Mangaleswaran, and Meenakshi Ramesh, senior partner, McKinsey & Co. and co-founder of Citizen Matters respectively, SK Jain, co-founder of WestBridge Capital, V.T. Bharadwaj, cofounder of investment firm A91 Partners.
"Endowments form the backbone of all great universities around the world. Endowment is the glue that binds the university with its alumni…greater the university, larger is the endowment. With this initiative, the management and the alumni have sowed a seed for what will one day be a large endowment proportionate to the stature of IIM-Ahmedabad," IIM-A said in a statement quoting Bikhchandani and Singhal.