Universities look to the future with endowments
Zayed University has set up the Dh10 million Bin Hamoodah chair of public health - funded by the Bin Hamoodah Group, an Emirati company - and is now looking for a head of department to fill it.
While endowments are crucial to the funding of western universities - at the end of last year Harvard University had investment assets of US$27bn (Dh99bn) - in the Middle East they are more typically associated with mosques and religious charities, according to Sulaiman al Jassim, Zayed University's vice president.
"We want to change this perception," he said, "but this means raising awareness."
Invested wisely, endowment funds provide a reliable income in perpetuity. Revenue from tuition fees is limited, and other sources, such as grants from government or the private sector, are prone to changes of policy or economic climate.
That regular income can then be used not only to pay staff but to fund research and build lecture halls, libraries and laboratories - usually named after the donor.
Debra LaMorte, senior vice president at New York University, said endowed chairs are essential budget relief for an institution.
"If the chair is $2m and is throwing off a five per cent spend rate, then the endowed fund is generating approximately $100,000 a year.
"These funds can be used to defray the costs of the professor's salary which frees up money for other uses at the institution."
As of August 2009, the market value of NYU's total endowment was approximately $2.2 billion, divided between the Washington Square campus ($1.5bn) and the medical school ($700m).
"The monies raised are a part of the university's overall endowment and are not in any way separate from other endowment monies invested and maintained by the institution," she added.
In the case of the country's federal universities, Zayed University, UAE University and the Higher Colleges of Technology, endowments could prove vital in boosting already flagging funding.
In December, papers from the FNC revealed that in 2009 Zayed University alone owed Dh33 million in electricity and water bills to authorities in Abu Dhabi and Dubai.
Safia al Raqbani, from the Zayed University foundation, said other companies willing to donate include the telecoms provider du.
She said the partnership is fulfilling both the university's need for additional funding and meeting industry's needs for research.
In du's case, it will be a fund for technological advancement; du will donate two Dh4m laboratories for multimedia development.
Attracting donors will not be easy. Incentives used elsewhere, such as tax breaks for donors, will not apply. "Here, the benefits would be that the academic is doing research for that organisation, acting like a consultant for them," Ms Raqbani said.
There is also the prestige that comes with having a chair named after a person or organisation. "It signals to the world that you are a donor who cares intellectually about a certain area of study and the professorship will be endowed and so therefore named in perpetuity," Ms LaMorte said.
Khalifa University will soon also have its first endowed chair, subsidised by the Abu Dhabi Education Council.
While the university's president, Tod Laursen, said that for now there is "more than adequate" money for research - the university is fully funded by the Abu Dhabi government - he added that it will be vital in attracting top academics as the university grows. "It's what they're used to," he said. "The symbolism at this stage is important to us."
The American University of Sharjah has an endowment fund to support research, hiring staff and offering scholarships.
Some of its donors have included Petrofac, which builds oil and gas infrastructure and which has endowed a chair in renewable energy. The position is still to be filled.
Last year Sharjah Islamic Bank gave a Dh30m endowment for the university to set up the Sharjah Islamic Bank Centre for Islamic Banking and Finance.
"It will be another decade before you feel the impact of the funding," said Peter Heath, the university's chancellor.
"It slowly builds financial capacity for increased scholarships and research. It is a buffer, securing the long term sustainability of the university."
He said the university cultivates relationships with donors which add prestige to the university and is cultivating its young alumni as a source of funds.
"They're young now but in 20 years they will be in significant positions," he said.
FACTS ABOUT UNIVERSITY ENDOWMENTS
859 - the year in which a university was established in Morocco with money from an endowment fund
27 - in billions of US dollars, the value of Harvard University’s endowment fund at the end of 2010
2.2 - in billions of US dollars, the value of New York University’s endowment fund as of August 2009
10 - in millions of dirhams, the value of the new endowment for a public health professorship at Zayed University
Updated: February 20, 2011 04:00 AM