President Ram Nath Kovind launched the IIT Delhi global alumni endowment fund on October 31 that will have an initial commitment of more than Rs 250 crore, nearly half of which will come from Flipkart co-founders Sachin Bansal and Binny Bansal.

For the fund with an initial seed capital of Rs 255 crore, IIT Delhi has set an aggressive target of raising Rs 1,000 crore by 2020 and Rs 7,000 crore by 2025, according to IIT officials.

“Endowments globally have become integral to the financial health of educational institutions over time. While we are still far from the size and importance of endowment funds of institutions such as Harvard, Yale or Columbia, it is the right first step in this direction. By giving through endowments, alumni are not just giving to their institution but also supporting and nurturing future generations of learners,” Kovind said while launching the fund at Rashtrapati Bhavan.

What is an endowment fund?

An endowment fund is an investment fund established by a foundation that makes consistent withdrawals from invested capital. The capital in endowment funds, often used by universities, non-profit organisations is generally utilised for specific needs or to further its operating process. Endowment funds are typically funded entirely by donations that are deductible for the donors.

IIT Delhi aims to raise $1 billion over the next six years and the fund will grow gradually with help from industry leaders and alumni who are now in senior management positions at companies in India and abroad.

The initial endowment amount and commitments have been collected from around two dozen alumni, who are committing between Rs 5 crore and Rs 25 crore each, except the Flipkart co-founders who have contributed Rs 125 crore, IIT officials said.

Worldwide, endowment funds are a big source of income for universities, which use a portion of it for development work and students scholarship. Endowment corpus of Harvard University is over $39 billion and Stanford has an endowment corpus of $27.7 billion.

The president said the best way to honour a gift is to make the most of it.

“In the latest QS World University ranking 2020, IIT Delhi was ranked at 182. There is a lot of scope for improvement if it aims to be one of the top institutes in the world. It needs to increase the number of faculty, particularly faculty with international experience. Additionally, it needs to upgrade its infrastructure to ensure its campus, course content and research facilities are world class,” he said.

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