Thursday, 29 August 2013 00:00
The front page picture of the Daily FT of 16 August reporting on a donation by an individual to a Sri Lankan scientific establishment was exciting in many ways. It was on Ricky Mendis becoming the first Platinum sponsor of the Sri Lanka Institute of Nanotechnology (SLINTECs) endowment fund with a donation of Rs. 25 million.
This surely must be a first in many ways in recent times. This is a donation of significance by an individual to start with. This is also a donation to support science, technology and innovation. In a country with a meagre investment on research and development, focused donation of this nature by an individual is indeed significant. SLINTEC will know the value since they are aware of how hard the journey to the present situation had been.
Newsworthy and praiseworthy
Mendis in turn for his magnanimous gesture will have the deed stated on a plaque adorning SLINTEC. When we just switch accounts to maximise returns and when we live on the edge constantly worrying on what is happening to my investment, the endowment decision and action is indeed newsworthy as well as praiseworthy.
However, this news was not taken up by the other mainstream media. As this is positive news, it is hardly surprising that most of the media miss this or gave it a miss. It is usually the ‘negative content’ that deserve headlines and by-lines in the mainstream press.
The appetite for the positive is dwarfed by the sheer public interest on the negative. An endowment is not a usual term within our lexicon and this means a financial asset donation made to a non-profit group or institution in the form of investment funds or other property that has a stated purpose at the bequest of the donor.
The SLINTEC endowment fund is a fresh initiative to broad-base funding sources. However, unlike many other options, this funding mechanism solely relies on exceptional thinking by exceptional individuals or corporates.
The endowment fund had been set up in August 2013 and is a trust which accepts donations. The funds are basically to fund research and related initiatives at SLINTEC which are beneficial to Sri Lankan society. Exploring this option of financing operations is itself a worthy initiative. Presence of funds in this format can ease pressure significantly and it is up to the trustees to ensure that the best and responsible use of funds takes place.
The Stanfords’ story
It should be of interest to know and learn from how one generosity can creates iconic institutes and movements, which help in shaping economies. Consider the story of Leland and Jane Stanford, who upon the death of their only child at the age of 15 due to typhoid fever declared that ‘the children of California shall be our children’. They understood with the passing away of their only child that it was not possible to help their child anymore and sought ways to make up for the loss.
Their decision in identifying a way to memorialise their only child resulted in a university and a museum in the State of California. It is fortunate that no stadium or a racecourse came into their mind as what a university the Stanford University has turned out to be.
Their wish was of producing ‘cultured and useful citizens’. The return expectations from this endowment have surely being a many fold. They indeed have touched more than the children of California and today the touch has extended to the entire globe literally as Stanford is world class! They have indeed left a legacy. The original gift lives on and the concept is now generally accepted as United States endowments are quite popular.
You can view the ‘Give a gift’ as a permanent feature on Stanford university website. Today Stanford university is a $ 4.4 billion enterprise with no signs of abating and its current endowment fund totals to 17+ billion US$. It is stated that around 20-23% of their income sources for the year to result from endowments. For a simple comparison our economy in total is about US$ 52 billion.
Endowments are quite useful in imparting education. Endowments enable some decisions to be made easily as in sponsoring a student who is bright and promising but who does not have the necessary wherewithal. Endowments can help in retaining staff and much more when the use of the funds is vision driven.
Endowments can set up special academic chairs, such as the NDB Professor of Entrepreneurship at University of Moratuwa. The funds for this academic chair have come from the National Development Bank. While UOM has only one such endowment, Harvard University in USA is reputed to have around 10,800 such endowments! Stanford has around 7,000. One can see how individuals and communities have made a difference to the higher education sector. Remember the last line of an Eastern saying – when the vision is eternity, cultivate people.
SLINTEC will use the funds to carry out research in nanotechnology and advanced technologies in selected strategic areas where the area selected is promising, but the key objective is at an early stage. This type of funds enables concepts to be explored at an early stage without the pressure of the standard jargon of ROIs and shareholder influences. Of course endowments do carry specific instruction on how the funds are to be used and that is only too fair considering that these are financial donations.
In our country endowments are rare in these important spheres – even from corporates, let alone individuals. This lacuna needs attending to. As we expect our economy to grow, we need to have strong skilled human capital to drive growth. There is a critical necessity in the area of science and technology if we are to aspire to a knowledge-based economy.
A building that I was once in comes to my mind. University of Cambridge’s Chemical Engineering Department benefitted with such a line of thinking from the corporate sector – a statement by Dr. Evans of Shell to the effect, “It was generally admitted that the welfare of the country and perhaps the world, depended in a very special degree on the efficiency and economical design of industrial plants and since many perhaps most, involved chemical operations, the question of the supply of chemical engineers became extremely important.”
Well then there is a need for a strong stable to grow the required numbers and thus the Shell Department of Chemical Engineering at University of Cambridge was born from an endowment. The rest is history. It is seen how forward thinking individuals and corporations breaking out of the mould of monetising every little activity can change the landscape.
Precisely what we need more in our country at this stage as the money we have usually get invested in enterprises which are of less strategic importance. As such, most of such investments have poor multiplier effects. Economic growth then is a distant dream.
Hopefully a show-starter
Ricky’s financial endowment to SLINTEC was hopefully a show-starter. He is to be strongly acknowledged for acting with a vision and being a pioneer. This now needs to be built upon. Giving is a difficult proposition and when it is carried out it is usually confined to small change! In many areas you will find that our internal endowments are to support pleasure-seeking activities, building internal images or for the political-social mechanisms.
Long-term thinking is hardly seen. Endowments can bolster the financial standing of receiving institutes. Of course the institutes may need necessary mechanisms in place. At present some of the pressures are relieved with international projects and mainly through borrowings. It is a difficult situation if one has to be sustained by borrowings and our mindset should not be subsumed with the borrowing mentality.
If we have to sustain our existence by borrowings and borrowings alone, being ‘world champions’ is not worth it at all. It is in this context, Ricky’s gesture sends a fresh message. May his tribe grow.
[The writer is Professor of Chemical and Process Engineering at the University of Moratuwa, Sri Lanka. With an initial BSc Chemical engineering Honours degree from Moratuwa, he proceeded to the University of Cambridge for his PhD. He is the Project Director of COSTI (Coordinating Secretariat for Science, Technology and Innovation), which is a newly established State entity with the mandate of coordinating and monitoring scientific affairs. He can be reached via email on firstname.lastname@example.org.]