Indian Institute of Management or IIM Ahmedabad has formed an endowment fund with a starting amount of INR 100 crore. It is the very first B-school in India that instituted such a fund.
Above 10 alumni members of the best business schools that include SK Jain and Sandeep Singhal, co-founders of WestBridge Capital, V T Bharadwaj, co-founder of A91 Partners, Sanjeev Bikhchandani, founder of Info Edge, Kuldeep Jain, founder of Cleanmax Enviro Energy Solutions, Arun Duggal, Chairman of ICRA, Deep Kalra, founder of MakeMyTrip, Meenakshi Ramesh, co-founder of Citizen Matters, Ramesh Mangaleswaran, senior partner of McKinsey, G V Ravishankar, MD of Sequoia Capital India anchored the fund.
The intention of the fund
- The intention of the endowment fund is helping IIM-A make a huge effect in the sphere of education, management practice, entrepreneurial leadership, and public policy. It is expected that IIM-A will expand this corpus to INR 1000 crore in the following 5 years.
- According to Bikhchandani, executive vice-chairman, Info Edge, many people believed that IIM-A happened to be a transformational experience. And if people can return then, they should as well as allow others too to do this.
- The endowment is meant the money that colleges receive in the form of donations, and this fund commonly supports financial aid intended for undergraduates, professorships, academic programs, fellowships, art museums, libraries, and facilities.
- Singhal believes that endowments work as the backbone of every university from all across the world. This is the glue that sticks the universities and their alumni. When the university is bigger, the endowment too becomes bigger. With the help of this creativity, the management, besides its alumni, has become successful in sowing a seed that will turn into a huge endowment that would be equal to the figure of IIM Ahmedabad.
How useful will it be?
In India, the concept of endowments is comparatively new, though, in the West, this is pretty common. For instance, Harvard University in the US does operate an endowment fund of $40 billion.
The endowment funds help ensure an institution’s financial health. And so, it encourages self-sufficiency and growth. The funds play a vital role in realizing the institutes’ long-term goals, and they also retain their autonomy, according to Kumar Mangalam Birla, who is the Chairperson of the Board of Governors of IIM-A.
Only in 2019, IIT Delhi officially launched its international alumni endowment fund. It made a starting commitment of INR 250 crore by ten founder alumni. According to the university, it will expand to $1 billion over the subsequent 6 years.
The endowment funds will commonly have a distinct management committee that will manage as well as govern the processes that comprise confinements on the method of withdrawing funds every year.
Additionally, it puts restrictions on the usage of these funds too. Based on the version of Kalra, the following five to ten years is about receiving a huge number of alumni that are included.
In this regard, Ravishankar opinioned that this fund would be conservative for the following several years regarding investments. It plans to invest the money in government securities.
From the time IIM-A was conceptualized in 1961, it has created more than 33,000 alumni that are working all across India Inc, and it has one in 7 CEOs having an mgmt. Degree from IIM-A.
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Source – The Economic Times.