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August 20, 1999


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M D Riti in Bangalore
[PS: Theme song by Roger Waters, The Pink Floyd]

Brain factories eat money! Are India's tech millionaires feeding their alma mater? Are you educated, employed and grateful to the schools and colleges you studied in for making you the person you are today?

Email this story to a friend. If yes, then have you ever tried expressing your appreciation with a cash contribution to those institutions?

If your answer is no, you have something in common with more than 99 per cent of your brethren in this country. And your college is now probably finally waking up to the fact that it badly needs more from you than the tuition fees you might have paid it in the past.

Money, get away
Get a good job with more pay and your O.K.
Money it's a gas
Grab that cash with both hands and make a stash
New car, caviar, four-star daydream,
Think I'll buy me a football team

Dr Narayana Murthy
Dr Narayana Murthy
This is perhaps why when Nandan Nilekani, managing director of leading software export major Infosys Technologies, gave his old college IIT-Bombay a gift of Rs 69 million. His munificence created quite a flutter in academic circles all over the country.

K B Chandrasekhar
K B Chandrasekhar
Such gifts are not unheard of. In fact, Nilekani's colleagues at Infosys have given to their old colleges: Infosys Chairman Dr Narayana Murthy to IIT-Kanpur, wife Sudha Murthy to IISc, Bangalore, and Gopalakrishnan to IIT-Madras.

Vinod Gupta
Vinod Gupta
The founder of Exodus, K B Chandrasekhar has contributed towards a centre at his old college, the Madras Institute of Technology.

IIT-Kharagpur started the Vinod Gupta School of Management largely from the donation of Gupta himself, who is an alumnus.

But few colleges, probably only premier institutions like the IITs, seem to be getting these gifts, and mostly from abroad.

Money, get back
I'm all right Jack keep your hands off my stack.
Money it's a hit
Don't give me that do goody good bullshit
I'm in the hi-fidelity first-class travelling set
And I think I need a Lear Jet

IIT-Bombay, for example, has what it calls a Heritage Fund based in the US, specifically targeting its alumni in the US.

"This fund is a non-profit US corporation that takes advantage of the American tax laws regarding donations for charitable causes," says Heritage Fund Treasurer Sandeep Pandya.

"We have raised a little under three million dollars in the two and a half years of our existence. Our goal is to raise 20 million dollars over the next seven years."

Adds Heritage Fund President Anil Kshirsagar: "It's not a one-way street. The organisation offers the alumni two simple but major value propositions: networking opportunity across the US and helping IIT become a world-class institute. This strikes a chord in the hearts of alumni, and the result is impressive."

"I felt I had a definite obligation to do something for an institution that shaped my life in so many ways," Nilekani told Rediff. "Higher education institutions are under a lot of financial pressure because they are no longer fully funded by the government. I firmly believe that such institutions should now start depending on three major sources for their money: high fee structures, consultancy fees from industry and endowments from successful alumni. So I decided to act on my belief and contribute a significant part of my assets to my old college."

Nilekani gave 14,000 of his shares in Infosys to IIT-Bombay, which in turn sold them immediately and realised Rs 69 million for them.

The money went into a foundation that put in operation a school of information technology, which in turn has been set up with a huge gift from another illustrious and far older alumnus, Kanwal Rekhi, now in the US.

A part of it was also used to refurbish Nilekani's old hostel! "Thanks to Nandan's package, hostel H-8 may soon attain a 'five-star' status," says dean S L N Murthy.

Why is it that alumni of Indian colleges who have moved to the US are much more inclined to send money to their old colleges than Indian alumni living in India?

Parag Saxena is the managing director of Invesco Private Capital, one of the largest pools of venture capital in the world. Saxena contributed generously to the Heritage Fund to help refurbish an auditorium and buy a number of journal subscriptions.

Saxena explains "I'd only be speculating, but I think there are three reasons: The ability to give because of significant wealth creation; the US culture of giving to non-profit institutions and the tax structure that makes it easier to do this."

Adds Pran Kurup and Joyjit Nath, co-founders, KGPNET (IIT-Kharagpur Alumni Network): "When you are away from the country you generally tend to be more concerned and attached than when you are close to home. Nostalgia perhaps? But we also think that, this perception is unfair to the India based alumni. There are contributions from India too but I think the absolute dollar amounts might have to do with the dollar to rupee conversion rate."

Adds Professor Bhaskaran of IIT-Kharagpur: "There are a large number of donors in India who have contributed Rs 5,000 and above, which is not bad. Imagine, we have well over 30,000 alumni and if all can contribute about Rs 5,000 or so every year (on the average) that will be a lot of money."

Kanwal Rekhi
Kanwal Rekhi
"The notion of paying back to society is not well established in India," says Rekhi, famous venture capitalist and ex-director of Novell, who recently donated $2 million to IIT-Bombay. "It is an integral part of the American free enterprise system. In the US, there is a tradition of supporting your alma mater financially. I have been doing it to my school here. On a visit to IIT in 1994, I was shocked to see the degradation of the campus over the years. That sparked off the idea of starting this US tradition in India also."

Nandan Nilekani
Nandan Nilekani
Nilekani counters the perspective: "It is not true that the tradition of giving largesse to higher education does not exist in India. After all, the Indian Institute of Science was started in 1900 with a huge gift of land from the Mysore Maharaja and an endowment of about Rs 100 or 120 million from Jamshedji Tata. But to be able to give that kind of big money now, you must have achieved some entrepreneurial success if you are in India. You cannot expect someone who has worked all his life to be able to afford to make such endowments."

Adds G V Dasarathi, software company director and IIT-Kharagpur alumnus: "The taxpayer funded my education at IIT and I am repaying him today as an entrepreneur by generating employment for so many people today. I pay an array of taxes and earn foreign exchange through export. This is how I am repaying my country. I don't think I need to repay the college directly too."

Money it's a crime
Share it fairly but don't take a slice of my pie
Money so they say
Is the root of all evil today
But if you ask for a rise it's no surprise that they're
giving none away

However, the main reason for alumni in India and outside not giving more to their old colleges seems to be the sheer apathy of the academic institutions themselves. "We never tried raising huge resources from alumni so I have no idea if they are favourably disposed or otherwise," confesses Y L R Moorthi of IIM-Bangalore.

Srikant Gokulnatha, a management consultant with the Boston Consulting Group in the US and a graduate from REC, Nagpur, says: "Our Indian colleges are poorly administered and lack a holistic sense of what a good education means. One of my classmates went back to VREC as a faculty member after his graduate studies and he has fought a long hard battle to get the alumni association funded and to get the administration involved with it. The administration gets its barely adequate funding from the government and does not have the incentive to raise more funds from alumni or the private sector. In the US, alumni funds are used for varying purposes such as funding research, scholarships and setting up faculty positions. That kind of vision and thrust is mostly lacking in Indian institutions. If the institutions made a concerted effort, I am sure they would be able to raise a decent amount of money."

"Even though I spent more time at REC, Nagpur and being younger, was more susceptible to forging long-term relationships and friendships, I feel closer to my graduate school, Wharton School at the University of Pennsylvania," admits Gokulnatha.

"This is because both the administration and the students at Wharton realise the value of a alumni network and the vested interest that the students have in making their alma mater successful. My school's reputation and success rubs off on me when the school grows in stature and reputation," he says.

"We have, in India, come to realise the potential of alumni contributions only recently and in fact, IIT-Kharagpur was the first Institute to set up its Technology Foundation for this purpose in 1992," says Professor R Bhaskaran of IIT-Kharagpur, who recently returned from a fund raising tour of the US."

IIT-Bombay followed by giving due importance to maintaining alumni relations and now IIT-Delhi as well as IIT-Madras are also getting alumni support.

In contrast, the whole system in the USA is geared to encourage the graduates of an university or a school to donate to their alma mater. Such donations are exempt from tax. The place of work generally gives a matching grant.

There are heavy estate duties and one cannot hope to pass on his/her wealth to children. Moreover, American parents do not subscribe to the culture of passing on all their wealth to their children.

Professor R Bhaskaran explains, "Universities and academic institutions also maintain large establishments to tap alumni resources. The Development Office at Stanford University has about 350 employees engaged in this job and they use a lot of volunteers. They keep in touch with all their alumni regularly and are not ashamed of soliciting funds or endowments for the university. Here in India, there are many who feel that it is not good to raise money like this in government-funded institutions. They think that all the needs of the universities have to be met by the government itself. Academicians are afraid of strings attached to contributions. In USA, they do not hesitate to name a building in a university after a donor (who may not be academically too great a man, but might just have a lot of money to give). They are more concerned about the kind of good work that can be done in that building. It is difficult for us in India to think in those lines."

The US tour of three professors from IIT-Kharagpur of the, US in June and July was organised mostly by their alumni associations there. "It was a very successful trip," say Kurup and Nath. "It is not meant to be a one-time thing, where they come and walk away with money. It is a process that is being initiated and will result in a lot more over time."

The consensus now seems to be that India's leading higher education institutes should not be eligible for government funding at any level. Instead, students should take loans and pay whatever fees they charge.

This might also alleviate the resentment that has built up over the years towards the typical IITian or premier engineering college graduate who avails of an education subsidised heavily by the taxpayer and then leaves his or her country's shores for more material gains.

Some, like Saxena, disagree: "If the government was to reduce the grants or eliminate them, students would leave India earlier. They would have a lesser link to India and will probably feel a lesser obligation to the country."

But most people concur with Kshirsagar when he says: "Government funding should be replaced by industry projects, alumni donations, market priced tuition and offering educational programmes that answer community needs. The premier institutes in India should be run on their own merit with the worldwide contacts they establish. The issue of 'cream leaving India' can be positively used in the interest of the institute by nurturing ongoing communication with them, by getting their feedback in running the institutes and finally by leveraging their reach and influence in the world market."

Money, get away
Get a good job with more pay and your O.K.
Money it's a gas
Grab that cash with both hands and make a stash
New car, caviar, four-star daydream,
Think I'll buy me a football team

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