OPINION | Why India’s universities must build strong research endowments

Indian universities have limited access to stable, long-term capital.

India’s higher education system is in the news for a variety of reasons. The recent controversy over exaggerated claims made during the ongoing AI summit has left a bad taste, pointing to deeper questions about the research climate and the role of private funding in encouraging innovation.

It is undeniable that the Indian higher education system is well placed to address the rising global demand for digitally skilled graduates. Some truly eminent educational institutions have been established over time, and these continue to produce outstanding talent that works across the globe. The criticism, however, is that while these institutions are excellent training grounds, they fall short when it comes to research.

The Structural Funding Challenge

The challenge is not just one of scale, but of structure. Indian universities have limited access to stable, long-term capital that can support research-intensive work, global collaborations, and sustained academic excellence.

Endowments, by design, provide durable funding by preserving and growing a corpus while deploying only a portion of annual returns. When well governed and professionally invested, they reduce financial volatility, enhance institutional autonomy, and enable long-term planning. Independent research depends heavily on such funding, which allows researchers to take risks and pursue difficult questions.

Untapped Philanthropic Potential

India does not lack wealthy alumni or philanthropic intent. The ecosystem of private university education is largely built on not-for-profit societies and trusts that have established impressive infrastructure across the country.

What is lacking is a system that allows university endowments to grow, compound, and sustain long-term academic excellence. While several Indian institutions have begun setting up endowment funds in recent years, these efforts remain small in scale and constrained in structure. Most donations still support immediate, visible outcomes such as scholarships or buildings, while very little capital is allowed to mature into professionally managed, long-term financial assets that can power research, faculty development, and institutional resilience over decades.

Lessons from Global Universities

The contrast with global universities is instructive. Institutions such as Harvard, Yale, and Princeton rely on endowments running into tens of billions of dollars to fund sustained academic ambition. Harvard’s endowment alone was valued at approximately USD 56.9 billion in fiscal year 2025.

In India, the first structured university endowment was established only in 2019, when IIT Delhi mobilised ₹250 crore from its alumni. Several IITs and IIMs have followed since, and the National Education Policy 2020 has acknowledged the role of philanthropy in higher education. Yet endowments in India remain limited in size, scope, and strategic maturity.

Building Trust and Governance

Building effective endowments in the Indian context requires overcoming entrenched donor preferences. Contributions have traditionally favoured visible, earmarked projects such as scholarships or infrastructure rather than unrestricted corpus funds.

For endowments to grow meaningfully, universities must demonstrate how unrestricted capital will be professionally managed, strategically invested, and deployed to generate sustained academic impact. This requires strong governance frameworks, transparent reporting, and credible accountability mechanisms.

Regulation and the Road Ahead

India’s philanthropy ecosystem is evolving. Private giving is expanding, driven by family philanthropy and high-net-worth individuals who are increasingly adopting structured, impact-oriented approaches. Private philanthropic funding, including corporate social responsibility and affluent donor contributions, is expected to grow at an annual rate of 10–12 per cent in the coming years. This presents an opportunity for universities to deepen engagement and diversify revenue beyond annual fundraising cycles.

Endowments also intersect with important regulatory considerations. India currently lacks a unified legal framework for university endowment funds. Institutions must navigate a complex mix of requirements under the Income Tax Act, the Foreign Contribution (Regulation) Act, and state trust laws, creating compliance challenges and administrative burdens. Clearer regulatory guidance on corpus management, tax treatment, and investment flexibility would encourage more confident long-term participation by both institutions and donors.

Crucially, endowment funds are not a replacement for public investment in higher education. They are best understood as a complementary instrument that allows universities to pursue ambitious research agendas, attract talent, and build resilient academic ecosystems. With professionally governed endowments and supportive policy frameworks, Indian universities can strengthen financial sustainability while advancing national development priorities. This would enable the growth of centres of excellence capable of carrying out cutting-edge research, resisting the temptation to pass off foreign technology as indigenous innovation.

Transforming endowments from nascent fundraising vehicles into mature, strategically managed assets will require collaboration among universities, policymakers, and donors. If this transformation succeeds, it could reshape the financial architecture of Indian higher education, enabling institutions to compete globally while serving the country’s long-term educational and economic goals. The dialogue must begin between philanthropy and academia, helping steer research into cutting-edge areas such as artificial intelligence and climate change.

(Amir Ullah Khan is a Civil Servant, Development Economist, and Visiting Professor at the Indian School of Business. Pooja Sanghani is VP at the IIM Bangalore Development Foundation.)

Views are personal, and do not represent the stand of this publication.