Endowment Funds can be a tool to secure the financial autonomy of the Higher Educational Institutions. How IIT Delhi is surging ahead in this direction.
IIT Delhi which is looking forward for its golden jubilee celebrations has started efforts to garner $1 billion dollars over the next six years as endowments from industry and alumni.
What is an Endowment Fund?
An endowment fund is an investment fund established by an organization which makes consistent withdrawals from invested capital. The capitals in endowment funds are generally utilized for specific needs or to further a company’s operating process. Endowment funds are typically funded entirely by donations that are deductible for the donors.
Financial endowments are typically structured so the principal amount invested remains intact, while investment income is available for immediate funding for use to keep a nonprofit company operating efficiently. Most large endowments are structured so a portion of the principal is released for use only after a period of time.
Plans of IIT Delhi
Endowment funds are a big source of income for top global universities who use a portion of it for development work and students scholarship. For example, Harvard University has an endowment corpus of over $39 billion and Stanford has an endowment corpus of $27.7 billion.
IIT Delhi is aiming for an endowment fund with an initial capital of around ₹175 crore to ₹225 crores. The fund is expected to grow gradually with the contributions from industry leaders and alumni who are now in senior management positions at companies in India and abroad.
Not just monetray contributions the institution is also looking for accepting company shares which will grow with time.
This endowment fund will give the IIT Delhi more financial freedom in designing its research projects and centres of excellence, hiring needed scholars and students financial help systems.
IIT-Delhi is planning to spend over ₹2,500 crores on research activities over a five year period and the money for this will come from both external sources and the ₹1000 crore government commitment to it as part of the IoE status it got last year.