Wednesday, October 13, 2010

IIMs to raise funds Yale University style

The elite Indian Institutes of Management (IIMs), which largely rely on government support, may soon raise money from their alumni. On Wednesday, the IIMs will discuss the report of a government-appointed panel that outlines the need for professional fund-raising by setting up dedicated offices and appointing experts, two officials of the Ministry of Human Resource Development (MHRD) said.

The committee has suggested an initial plan for the four oldest IIMs --- at Ahmedabad, Kolkata, Bangalore and Lucknow --- to raise Rs. 400 crore (Rs. 4 billion) from their alumni. The plan follows Yale University's fund-raising model, under which the institutes will identify prospective fund givers, solicit money from them and keep them informed about how it is being used.

"The committee has given its report and has some forward-looking proposals. It will be discussed at the IIMs' meeting, chaired by HRD minister Kapil Sibal," one of the officials said. "The proposal for raising an initial Rs. 400 crore by four IIMs over a period of three years is an achievable target, looking at the wide alumni base of these institutes."

The committee which was set up by the MHRD, is headed by Hari S. Bhartia, Chairman of the Board of Governors of IIM-Raipur and Co- Chariman of Jubilant Life Sciences Ltd. Bharat Gulia, Manager - Education at audit and consultancy firm Ernst and Young, said the Indian Institutes of Technology (IITs) have been successful at pooling resources from alumni. "These B-schools have not done so. Their students are in good positions worldwide and it would be great to leverage it," he said. "IIMs are looking for greater financial autonomy and this is a positive step." He added that unless professionals are hired, the fund-raising effort won't succeed.

The second MHRD official said IIMs are gradually becoming global brands, and raising funds professionally to fuel their growth is an important step for them. "A growing brand like IIM cannot entirely depend on government money. This effort suggested by the committee is one of the alternative ways to become financially robust," the official said. Both officials declined to be named.

The Bhartia Committee has proposed that, like Yale University, the four IIMs should reach out to former students who can contribute by making presentations and inviting them on campus for further interaction. Those who cannot spare the time should be given the option of donating through telephone or Internet banking. They should also be allowed to donate in cash and kind, another model followed by Yale.

Besides the four schools mentioned in the report, India has six more IIMs at Indore, Kozhikode, Shillong, Rohtak, Ranchi and Raipur. While the older IIMs receive Rs. 20 crore (Rs. 200 million) a year from the government, the new ones at Rohtak, Ranchi and Raipur will receive Rs. 400 crore each over the next eight years.

"This is just the beginning. We have submitted the report, and a final decision will be taken on Wednesday by the HRD minister," said a member of the Bhartia Committee, also requesting anonymity. Besides government funding, IIMs also raise some money through executive programmes and consultancy. The Wednesday meeting, to be attended by the Directors and Chairpersons of all IIMs, will also discuss governance, curricula and branding of IIMs.

Source: Mint, October 13, 2010
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