Experts believe that most of the US Private universities owe their progress to endowment funds that have been donated to them.
Massive Endowment Funds Drive Growth
• Elite private universities like Harvard ($50.7B), Yale ($40.7B), and Stanford ($36.3B) have enormous endowments that fund research, faculty salaries, scholarships, and infrastructure.
• A significant portion of these universities’ budgets comes from endowment returns rather than tuition fees.
2. Research & Innovation
• Endowments fund cutting-edge research in fields like medicine, AI, and engineering.
• The U.S. consistently leads in global university rankings, partly due to endowment-backed research funding.
3. Financial Aid & Accessibility
• Many top private universities offer need-blind admissions (e.g., Harvard, MIT) because endowment funds subsidize tuition for low-income students.
• Without endowments, these institutions might have to charge higher fees or reduce scholarships.
4. Long-Term Institutional Stability
• Endowments allow universities to survive economic downturns without drastic budget cuts.
• During the 2008 financial crisis and COVID-19, well-endowed universities remained financially stable, while smaller ones struggled.
It is not that wealthy people do not exist in India, however, private universities have not built endowments comparable to those in the U.S. The reasons lie in structural, cultural, and regulatory factors, not just wealth availability.
No Strong Tradition of Alumni Giving
• In the U.S., donations from alumni play a major role in university endowments.
• Indian alumni (even from IITs and IIMs) rarely donate in large amounts due to:
• Lack of a strong culture of philanthropic giving to universities.
• Many successful alumni migrate abroad and donate to foreign universities instead.
Trust Deficit & Lack of Transparency
• Many private universities in India are run by business families or politically connected groups.
• Donors often distrust how funds will be used, fearing mismanagement or lack of accountability.
• In contrast, U.S. universities provide clear reports on how endowments are invested and spent.
Regulatory & Legal Barriers
• Private universities in India do not get the same tax benefits for endowments as U.S. institutions.
• Indian universities are regulated by UGC, AICTE, and state laws, which limit their financial autonomy.
• Many universities are set up as “trusts” or “societies,” which cannot raise permanent endowment funds like U.S. nonprofit universities.
Indian Philanthropy Focuses Elsewhere
• Wealthy Indians prefer donating to temples, hospitals, or NGOs rather than universities.
• Education donations in India often go towards building schools, scholarships, or skill development programs, not university endowments.
• In contrast, U.S. donors see university endowments as a way to create a legacy.
Private Universities in India Are Young
• The top private universities in India (Ashoka, O.P. Jindal, Shiv Nadar) were founded in the last 20-30 years, while U.S. private universities have had centuries to build their endowments.
• It takes time for institutions to gain credibility and attract large endowments.
Concerns have been raised regarding the efficiency of India’s Waqf Boards in managing assets to uplift marginalized Muslim communities. Critics argue that mismanagement and corruption have hindered the effective use of these assets for community development.
Allegations of Mismanagement and Corruption:
A notable example is the Karnataka Wakf Board Land Scam, where a 2012 report by the Karnataka State Minorities Commission alleged that approximately 27,000 acres of Waqf land were misappropriated or illegally allocated, amounting to an estimated loss of ₹2 trillion (US$39 billion). The report implicated politicians and board members in colluding with real estate entities, leading to significant asset diversion from intended charitable purposes.
Furthermore, critiques have labeled Waqf Boards as “a cesspool of corruption,” accusing them of encroaching on properties and lacking transparency and accountability.
Recent Legislative Developments:
In response to these concerns, the Indian government introduced the Waqf (Amendment) Bill, 2024, aiming to reform Waqf property management.