The Missing Endowment Culture: Indian Universities Have No Culture of Giving

Strolling through the campuses of Harvard, Yale, or Stanford, you will find buildings named in honor of alumni, research funded by graduates, and scholarship funds that generally pay tuition for those who would otherwise never access these facilities. Contrasting this with IIT or Delhi University, you rarely find even a similar equivalent. Buildings generally end up being named after politicians or bureaucrats instead, and scholarships almost always only come from the government.

Illustration by The Geostrata

The idea that a past graduate with their fortune would write a cheque to fund research or a scholarship in India, as a culture, barely exists. India fundamentally lacks an alumni-giving and endowment-building culture, leaving immense value-creation opportunities on the table. 

WHY IS AN ENDOWMENT EVEN IMPORTANT? 

An endowment is not just another deposit in the bank; it is permanent and, more importantly, professionally invested as a fund whose returns pay for university activities in perpetuity. Harvard alone has an endowment exceeding 50 billion dollars. Yale and Stanford also have funds exceeding tens of billions, and these funds alone generate billions in annual income, which end up funding faculty chairs, need-based admissions, and research projects without dependence on tuition revenue or any government appropriation, for the most part.

This gives foreign universities a risk-taking ability that Indian universities fundamentally do not have; they have more flexibility in research study choices, risky investments, and even admitting students regardless of their general ability to be able to pay. Beyond this, the endowment acts as a crucial buffer in times of economic and political crises for these colleges because they do not have to look towards the government immediately when such issues persist. 

For India, even the most prestigious IITs and IIMs boast endowments that are comparatively rounding errors when we look at foreign colleges. This is not because India just lacks wealthy alumni; it is because the culture, tax incentives, and institutional functioning, in addition to the building of a relationship between alumni and the alma mater, are generally underdeveloped in India. 

SO, WHY DOES INDIA LACK THIS CULTURE? 

The very concept of education in India took root primarily as a public good with a deeply entrenched role for the government to play. Nehru’s vision of IITs, IIMs, and central universities positioned the government as the primary instrument of disbursing higher education. While public investment in education is valuable, this led to a lack of incentive for these institutions to ever collaborate or build a relationship with private donors. 

American universities actively needed a fundraising infrastructure to survive; Indian universities lacked any incentive to build one because all their bills were paid by the government. American elite universities actually cultivate loyalty across multiple generations through reunions, alumni magazines, sporting rivalries, residential college systems, alumni events, and by maintaining a sense of belonging that brings students back.

In contrast, Indian colleges rarely ever invest in such relationship management. Alumni associations do exist, but they are often informal and underfunded. Beyond this reality, they are largely disconnected from the institutional leadership and financial plans. A graduate of an Indian college is less likely to feel that the institution remembers or cares about them. 

In the United States, charitable donations are tax-deductible, and this has been true for over a century, allowing an ecosystem of estate planning, planned giving, and donor-advised funds to develop around university philanthropy. India's tax deductions for educational donations exist under provisions like Section 80G, but they are way less generous to the donor, and the awareness of said provisions is also less understood by the public. Wealthy Indians who do want to donate substantially to education find it easier to start their own foundation or engage with an NGO than to navigate donating to their own alma mater because of this lack of connection, awareness, and general bureaucratic bottlenecks. 

India also lacks a culture of educational philanthropy; philanthropy is primarily focused on religious institutions and causes tied to social issues or caste networks. Giving back to one's old college is a comparatively recent concept even amongst those Indians who have made a significant fortune, and even with this awareness of the concept, it competes for attention with family obligations, religious giving, and giving to newer causes like healthcare or disaster relief that feel more urgent and easier to understand as proximate causes to give to. 

Finally, it is also the case that American universities employ development offices staffed by professionals whose entire job is to identify and bring in donors over the years. Indian institutions have almost no equivalent when compared to the organised system for cultivating this network abroad.

INDIA SUFFERS AN IMMENSE COST BECAUSE OF THIS GAP

Primarily and most visibly, financial aid suffers. American universities with a set financial system can proactively offer need-based, scholarship-driven admission. Indian institutions depend far more heavily on government scholarship schemes without this cushion, which are useful but very limited, means-tested, and subject to change amid political and economic fluctuations.

In a country like India, where education and R&D initiatives are underfunded compared to other developing and developed nations, such a cushion would be an asset to how education works in India. 

Drawing on this, as an extension, research suffers too. Endowments allow American professors to pursue longer-term, high-risk projects without the need to continuously chase grants tied to specific government priorities, which in themselves change periodically.

Indian faculty, by contrast, are far more dependent on government research funding bodies, which tend to favor safer, more immediately applicable research and come with heavier reporting burdens. The priority shifts from genuine research findings and patent grants, which take longer periods of time, to minor achievements without real returns in the form of patents filed rather than granted. 

Ultimately, the reliance on government schemes also creates room for political interference in these universities. This interference extends itself to appointments, curriculum, and even so far as the admissions and scholarship policy. An endowment allows a university to be self-reliant and serves as a buffer to maintain its own academic freedom regardless of the national political situation.

Endowments grow through investment returns over decades and return in a compounding manner. A fund started with modest sums of money, when invested wisely and maintained consistently, becomes enormous through the simple principle of compounding. Every year that Indian institutions fail to build this culture is a year of lost compounding that cannot be recovered later; starting an endowment culture today means starting at least fifty years behind where American institutions are today.  

ARE THINGS CHANGING? 

It would not be accurate to say nothing has changed. The IITs, particularly IIT Bombay and IIT Delhi, have made commendable efforts towards alumni networks and endowments, aided by the success of graduates in Silicon Valley and the world of finance. With the popularisation of private education across disciplines, names like Ashoka University, BITS Pilani, and OP Jindal Global University have modeled aspects of their model off American-style developmental philosophies and cultivated donor relationships from the very beginning.

Wealthy individual donors have made large gifts to institutions in recent years to send a signal that the appetite for this kind of giving exists once the right vehicle and relationship are in place. The importance of this is also that when the right culture and awareness exist, these donations often serve as a well-perceived public activity for the image of the donors themselves; with a mutually beneficial relationship, this culture becomes easier to expand. However, despite commendable progress, this start remains restricted to exceptions rather than being the general norm.

In addition to this, the introduction of foreign campuses on Indian soil with universities like Deakin, Bristol, and Aberdeen is further expected to intensify competition in the private sector, as these universities themselves carry an incentive to develop this culture in India to offset their own deficits. 

India's lack of an endowment culture is a weakness that constrains universities' capacity in financial aid, research flexibility, priorities, and institutional independence. The comparison with universities abroad is not because India should copy them, but rather because it reveals the value it creates in talent unlocked and research output, which is currently left on the table. Closing this gap requires building the relationship between Indian graduates and their alma maters from the ground up. 

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BY KRISH TEAM GEOSTRATA

info@thegeostrata.com