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IIMs learn the art of fund raising

Institutes may finally set up a fund-raising department to push their expansion plans

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More than 10 months after the group on for the Indian Institutes of Management (IIMs), headed by Hari Bhartia, co-chairman and MD, Jubilant Life Sciences, submitted its recommendations to the Ministry of Human Resources and Development (MHRD), the may finally have a fund-raising department in place.

At a recently concluded workshop on fund-raising held in Delhi, a structured move in the direction of professional fund raising activities by the IIMs was discussed. The IIMs have so far been dependent on the grants to fund their expansion and infrastructure requirements.

M J Xavier, director, IIM-Ranchi, said setting up such a department would cost Rs 1 crore. To raise funds, the IIMs will engage the services of fund-raising experts, who will work towards increasing the process of engagement and investment with the alumni. “The culture of professional fund-raising has been missing at the IIMs. This idea will make funding, in cash and kind, a part of the IIM culture,” said Debashis Chatterjee, director, IIM-Kozhikode.

IIM-Lucknow, IIM-Ranchi and IIM-Raipur said they too may set up a similar department. in addition to setting up a fund raising department is considering involving the dean of external affairs in the process.

“We are working on giving more structure to the process, the final outlay of which will be decided over the next few months. We will tap into the rich pool of alumni present in various positions of influence,” said Shekhar Chaudhury, director, IIM-Calcutta.

IIM-Calcutta and IIM-Ahmedabad have an estimated 10,000 alumni, while IIM-Bangalore has 8,000 alumni.

An IIM director, on the condition of anonymity, told Business Standard, that once the department is established, they would look at raising up to Rs 15 crore.

“While this is what one would want to raise in the first year itself, realistically, this might be a difficult target to reach because of the absence of a culture of donating to educational institutes,” the director said.

IIMs need to build a corpus which they have been unable to do for all these years. Whatever money is available is largely in the form of government grants. The IIMs have not been successful in getting any significant donation from outside parties and using that corpus to do things leading to academic excellence.

Today, the bulk of the money that IIMs generate is through the Management Development Programmes (MDPs) or executive education programmes they conduct. In absence of these, they would be running at a loss or just marginally breaking even.

"A corpus is a way out and building one is a priority. If we implement the other recommendation of more teaching and more research, it means less MDPs and in turn less income for not only the professors but also for the IIMs. To make up for that income, either you increase the fee or find some other source of money. Else, the budget of IIMs may go for a toss," chairman of Maruti Suzuki India and author of this report on new governance structures, had earlier told Business Standard.

However, Samir Barua, director IIM-Ahmedabad confessed to facing several problems in fund-raising. According to Barua, IIM-Ahmedabad is in the process of raising Rs 10 crore, but has so far been unable to do so.

Among the techniques under discussion are the idea of chair professorship, which will be given to an esteemed person in return of a grant for a specific department. The second method under consideration is providing partial/ electronic access to courses for corporates who make donations.

According to B S Sahay, director, IIM-Raipur, reasons for fund-raising have to be determined before possible donors are approached.

“The need of the structuring process is that the objectives of the fund raising be defined, donors be identified and a policy framework be established. This is how things are done in the US and Europe where donation ecosystem is a lot more developed,” Sahay said.

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