From Gift to Endowment

More than twenty years ago, Narayana Murthy offered IIT Kanpur eight crore rupees in Infosys shares. The institute could not accept them. There was no mechanism at the time for a college to receive equity. Murthy spoke about it again last year. Had those shares been held quietly, they would be worth about two thousand crore today. The dividends alone would have paid five hundred crore over eight years.

Nothing here is anyone’s fault. Nobody in that era imagined an Indian college holding a portfolio. Rules follow the world they are written for. That world has changed. The rules can change with it. This piece is about what we build next.

Raising is an event. Holding is a system.

My last article said our best institutions are entering their finest years. I still believe that. Then a reader replied in the comments. He works in alum relations. The numbers tell only half the story, he wrote. Behind them lies a decade of quiet relationship-building. Not asks. Relationships.

He is right. The point runs deeper than stewardship. A gift takes a year to secure. An endowment takes a generation to build. We have learned the first. We are only beginning the second. Three disciplines carry us across.

The first discipline: a spending rule we set for ourselves

American universities hold about 944 billion dollars between them. Last year, they spent 4.9 per cent of it. They do not apply that rate to today’s balance. They apply it to a rolling average over several years. A bad market then hurts far less. Almost half of what they draw is used to pay student fees.

Our own guidance sets an outer limit on annual spending. An outer limit is not a target. Nothing stops us from binding ourselves tighter. This part is entirely in our hands. Write 4 or 5% into the trust deed. Apply it to a trailing average. That protects a donor’s wish better than any thank-you letter. It also says what the donor is listening for. It says we expect to be spending this money in eighty years.

A spending rule is not an accounting choice. It is the promise that enables a large gift.

The second discipline: the second gift

The best-measured sector in the world retains about 43 per cent of its donors. First-time donors perform worse. Only about 19 per cent ever give again. Four in five disappear. But look at the other end. Donors who have given seven times retain at 87 per cent. Repeat donors now provide over sixty per cent of all money raised. Winning a new donor costs five to ten times as much as keeping one.

The lesson is clear. The first gift matters least. The second gift is where the institution is built. The seventh is where it becomes permanent.

Most of us do not know our retention rate. Not because it is hidden, but because nobody calculates it. We announce totals instead. A total tells you nothing about next year. The fix is straightforward to learn. Say thank you in days, not weeks. Report what the gift did within sixty days. Keep a stewardship calendar with a named owner. Then count how many first-time donors returned. Put that number before the board. Put it beside the headline figure.

The third discipline: the money that comes later

Americans left 62 billion dollars to charity in their wills last year. That was a tenth of all their giving. It grew faster than any other source. None of it was raised last year. It was asked for twenty or thirty years ago. Someone had a quiet conversation. The largest gift most people ever make is the one in their will.

India has almost no legacy giving. We run no bequest programmes. We don't have anyone trained to approach this topic with sensitivity. We keep no register of intentions. Meanwhile, our founders are ageing. The people who built everything after 1991 are drafting wills now. They will decide with us or without us. Starting a legacy programme costs almost nothing. Starting it twenty years late costs a corpus.

Four changes that would help

Institutions can do all of the above alone. Some gains lie in the wider environment. Each of these is small and technical.

Second, ease stamp duty on gifted land. A physicist once offered fifteen acres to his old institute. The transfer attracted forty crore in duty. The gift did not survive the wait. Property is where most Indian wealth sits. Making it giveable opens a door that is currently shut.

Third, let CSR reach the corpus. CSR funds are intended to be spent within the year. That suits many causes well, but not education. A company may be happy to endow a chair forever, yet it funds one year at a time. Allocate a defined share of CSR to an endowment corpus. An annual expense then becomes permanent capital. The money is already committed.

Fourth, I would choose this one first. Britain tried matched funding in 2008. Two hundred million pounds was committed. About 143 million was disbursed over three years. The design was the clever part. Beginners were matched pound for pound. Experienced fundraisers got one pound for every three they raised. The scheme rewarded starting, not being good already. Alum donor numbers rose 38 per cent across the sector. In the years before, they had risen by 22 per cent.

There was a second effect, and it mattered more. Entry required reporting to a common survey. A scheme meant to raise money instead built the sector’s data. British universities have known their own numbers ever since. We could do this here for a fraction of that sum.

The institutions that have not yet asked

So far, everything concerns perhaps forty institutions. India has around 1,289 universities and more than 48,000 colleges, which together teach roughly 45 million students. Our whole national conversation covers a rounding error.

This is the largest untapped opportunity in Indian philanthropy. The money is not missing. The ask has never been made. I hear the same three reasons, again and again. Our alums are not rich enough. It would look like begging. Nobody here has the time.

The first is usually wrong. It is also easy to test. A college with forty thousand alums needs no crorepati. It needs 400 people to give 25,000 rupees. Banaras Hindu University raised over five crore in about a year. It simply made giving easy and visible. That money funded more than fifty new scholarships. None of it needed an IIT balance sheet. It needed a decision.

The second reason deserves respect. It is about dignity, not money. But asking well is not begging. A good ask invites someone to belong to something they already love. Smaller colleges often find this easiest. Their alumni still remember their teachers by name. A five-lakh scholarship there changes a visible life. That is much harder to show at scale.

The third reason is the honest one. Nobody has the time because nobody has the job. Fundraising does not begin with a campaign. It does not begin with a brochure. It begins the day one capable person is given the work. Give them the authority to write to alums. Then give them three years.

No institution here has alums who would resent being asked. The risk is not refusal. The risk is never asking and calling the silence an answer.

The distance between a gift and an endowment

India has never had a giving problem. I wrote that last time, and I still hold to it. Generosity is the donor’s half of the bargain. The other half is ours. Donors decide what to offer. We decide what survives.

Eight crore rupees became nothing. The machinery of the day could not hold it. Two thousand crore is what that gap cost. Somewhere this year, a donor is offering something we cannot yet receive. And a few thousand institutions are still waiting for permission to ask.

A gift is a moment. An endowment is a promise. The distance between them is administration.

Sources: 2025 NACUBO-Commonfund Study of Endowments; Giving USA 2026 on giving in 2025; Fundraising Effectiveness Project reports, 2025; N. R. Narayana Murthy’s remarks on equity donations to institutions, 2025; Outlook Business reporting on India’s university endowment ecosystem; HEFCE Matched Funding Scheme for Voluntary Giving 2008-2011 and CASE analysis of it; All India Survey on Higher Education, latest release; Banaras Hindu University statements on alums giving.