IITs remain the big daddy of fund-raisers

Last month, Arjun Malhotra, co-founder of HCL Technologies and chief executive officer Headstrong, an IT consulting firm, donated about Rs 5 crore (Rs 50 million) to his alma mater Indian Institute of Technology-Kharagpur.

Malhotra, a 1970 BTech from IIT Kharagpur, has decided to pledge $5 million (Rs 25 crore) during the golden jubilee of the institute, which will use the money to establish the G S Sanyal School of Telecommunication in the name of the former IIT director and faculty member.

When it comes to raising funds, IITs are clearly the big daddy of the business.

IIT Bombay, for instance, has over the last decade, generated Rs 200 crore (Rs 2 billion), only via donations from its alumni.

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Other IIT alumni who have given back to their alma mater include N R Narayana Murthy (Chairman Emeritus, Infosys Technologies), Nandan Nilekani (Infosys Technologies co-founder and chairman of Unique Identification Authority of India), Romesh Wadhwani (Chairman & CEO of Symphony Technology and founder Wadhwani Foundation), Kanwal Rekhi (Managing Director at Inventus Capital), Vinod Gupta (founder and CEO of Database101.com and Everest Group, LLC)and Vinod Khosla (co-founder Sun Microsystems) and many more.

Till recently, for IIT Bombay, bulk of the donations were raised in the US, where close to 90 per cent of funds contributed were by large donors with some 25 donors giving in excess of $100,000.

"We encourage smaller donations from alumni across the world," the institute had said in a press statement this August.

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"It works on the premise that if 50 per cent of IIT Bombay's 40,000 string alumni choose to donate a mere Rs 10,000 to their alma mater, IIT Bombay would have access to an additional Rs 20 crore (Rs 2000 million) at its disposal."

To facilitate the process, IIT-B also unveiled a new online donations portal. Over 40 per cent of the funds donated have gone to infrastructure projects that include the Kanwal Rekhi School of IT, Shailesh Mehta School of Management, Gaitonde Lecture Hall Complex, D S Foundation Gymkhana and Victor Menezes Convention Centre among others.

Donations to IITs are wholly tax-deductible for both corporate bodies and individuals, with 100 per cent exemption under Section 80G of the Income Tax Act.

To facilitate foreign donations, various IITs have acquired non-profit tax exemption status in the US.

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At IIT Madras, the coffer is filling up too. Per year, the institute generates over Rs 10 crore (Rs 100 million).
This in addition to having alumni-sponsored infrastructure on campus.

"We use faculty to coordinate fund-raising," says R Nagarajan, Advisor, Office of Alumni affairs, IIT Madras.

"This is not done at a professional level. We just ask alumni to volunteer contributions."

Early this year, IIT Bombay and IIT Madras came up with a scheme wherein every graduating class is asked to pledge any amount they wish to, for their institute, before they leave the campus.

A year after they graduate, the institute reminds them if they wish to make good the pledge.

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"The first year, the student participation was 40 per cent. Last year, 80 per cent pledged. We don't look at it as a major fund raising theme, but we use it to be in touch and stay connected," adds Nagarajan.

IIT Delhi, however, says in the past decade, contributions from its alumni would be anywhere around Rs 75 crore (Rs 750 million).

The institute which has got aggressive on fund raising in the last four years has garnered a neat Rs 40 crore (Rs 400 million) plus in the past year-and-a-half from two of its ex-students.

"Seeking donations from alumni members has picked up only in the last few years," notes professor Ashok Gupta, Dean, alumni affairs and international programmes.

"Unlike universities in the west, we have never really tapped into our alumni network and sought donations aggressively."

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Different at IIMs

While the IITs say they stand tall when it comes to their students paying back to the alma mater, the Indian Institutes of Management do not have much to boast about.

 Agrees professor Atanu Ghosh, dean, alumni and external relationship at IIM Ahmedabad.

"If you do a scale comparison, IITs fare better than IIMs when it comes to receiving from their students," he says.

"But it is also a fact that IITs have created more techno entrepreneurs largely from the Silicon Valley. Probably in IIMs there are not too many success stories."

At IIM-A, corpus from alumni donation could be around less than Rs 10 crore (Rs 100 million).

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The institute says donations happen for creating infrastructure -- a new dormitory, technology renovation, supporting needy students and creating a sport complex.

IIM Bangalore's corpus from alumni donation is not very different from that of IIM-A. These institutes have recently got serious about fund raising from their alumni network. IIM-A is trying to connect with its alumni and in the last one year, created a new position to manage alumni relations.

"IIMs have never really put thought behind leveraging their alumni network," says the director of an IIM who does not wish to be identified.

"It is only in the past couple of years that IIMs have decided to get aggressive on this front. Largely our corpus from alumni donations would not go beyond Rs 7-10 crore (Rs 70-100 million)."

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According to Ghosh, the entire culture of giving back to alma mater and connect with alumni is much stronger internationally.

And, Indian institutes will have to work on both fronts — changing the culture and also take initiative (at the institute level) to have more stronger relationship with alumni.

But Nagarajan thinks that for IITs, seeking donation is pretty much need based due to their sheer size.

"IITs are huge institutions," he notes.

"They offer both, an undergraduate and a post graduate programme for reasonable batch sizes.

"The IIMs on the other hand, are able to charge high tuition fee and don't need funds as much."

IIM faculty members differ.

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"Donating to one's alma mater is largely about their connection with the campus," says Ghosh.

"You always have more loyalty towards your undergraduate campus as you spend more time there than you would at the post graduate campus. Besides, batch size that IITs have is far more than that of IIMs."

But IITs and IIMs unite in expressing their displeasure towards Indian corporate houses donating internationally.

Last year, in one of the largest gift for the Harvard's Humanities Centre, Mahindra and Mahindra vice-chairman and managing director Anand Mahindra, gifted $10 million to the Harvard University.

Mahindra had graduated from Harvard in 1977 and earned an MBA degree in 1981.

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In 2010 again, the Tata Group donated $50 million to Harvard Business School which was the largest international donation in the school's 102-year history.

Ratan Tata was a student of Advanced Management Program at Harvard in 1975. The donation is to fund a new building that will support a broad range of executive education programmes.

"It is rather displeasing to see Indian corporate heads donating internationally when institutes back home need such generosity," the IIM director adds.

"I hope they take a leaf out of how IITs get donation from entrepreneurs internationally and help their institutes grow."