Move over, IPL, corporate events. IIM-A to now offer infrastructure naming rights on campus

28 Feb,2014

By Vishal Dutta

 

For any pedigreed company or individual donors looking to get their names on a building at the Indian Institute of Management in Ahmedabad (IIM-A), the country’s top-ranked business school, now’s the time to do so. Naming rights for various buildings on the campus are on offer, as the institute tries to emulate a fund-raising method that’s well-established overseas.

 

Back home, Indian Institutes of Technology and the Indian School of Business are among educational establishments that use this method to drum up contributions. “Yes, we are in the process of implementing infrastructure naming rights,” said IIM-A Director Ashish Nanda, a Harvard Law School professor who was appointed last year after a global hunt that took nearly 10 months. He said Arvind Sahay, a professor at the school, was heading the project.

 

Big education institutions such as Harvard Business School receive a substantial portion of their revenue from naming rights. “If we can have a large corpus, then this may also result in a decrease in student fees,” said an official associated with the plan. IIM-A rights will be awarded for a fixed tenure and the terms will vary. Amongst IIMs, the Ahmedabad school will be the first to give out naming rights in an organised format, said the person.

 

Harvard Business School’s 2013 annual report showed a total revenue of $587 million, of which 31 per cent came from publishing, 25 per cent from executive education tuition, 18 per cent from MBA tuition and fees, 2 per cent from housing, rents and others and 24 per cent from endowment distribution and gifts.

 

Among the most prominent of recent contributions by an India business house is Tata Hall named after Ratan Tata and finished in December last year, endowed by the Tata Group’s philanthropic wings. Total operating revenue for Harvard University rose 5 per cent to $4.2 billion, due largely to the increased annual distribution from endowments and a substantial increase in gifts for current use. The university’s net assets were up $3 billion to $38.6 billion at the end of June last year, driven mainly by positive endowment returns and an increase in giving. In fiscal 2013, the endowment distribution rose 5 per cent to $1.5 billion.

 

Of course, naming rights form just a part of this, said Ahmedabad-based chartered account Saurabh Shah. Donors to IIM-A will be able to choose from various facilities. “Dorms, classrooms, seminar rooms, faculty wings, the IMDC (International Management Development Centre) complex, cricket ground, case development centre are the locations/ sites which can be allowed for naming rights,” said the person cited above.

 

The 110-acre area is divided in two by a road that runs between the old and new sections that are connected by an underground passage. The old campus is on 65 acres and new one on 45 acres. IIM-A has 18 dormitories, 100 faculty houses, 250 staff houses, a library, six large classrooms, six seminar rooms, 90 faculty offices and some administrative offices. The Kasturbhai Lalbhai Management Development Centre (KLMDC) has 64 rooms, two auditoriums, two class rooms, eight seminar rooms, a dining hall and a computer lab.

 

The IMDC complex has 168 rooms for executives, two classrooms, an auditorium, two seminar rooms, 12 syndicate rooms, five large classrooms, five seminar rooms, 10 faculty offices, 17 dormitories and 120 married student homes. The school has an average student strength of about 1,100 every year. “The immediate requirement is for roughly Rs 1-2 crore for the Louis Kahn Plaza (KLP) area restoration as it has been affected by cracks due to the earthquake in 2001,” said the person cited above. American architect Louis Kahn designed the iconic red brick IIM-A building in 1961. “Negotiations with a few donors are going on.”

 

IIM-A will make clear in the conditions that the money won’t allow donors to impose any restrictions on the school and that there should be flexibility with regard to its use, the person said. Nanda declined to provide any names of donors, but said, “Much progress has been made in the last three months.” While naming rights will go to the highest offer, there’s unlikely to be a typical bidding process, said the person cited above. The naming rights won’t be awarded in perpetuity but will need annual or bi-annual renewal or as per the agreement between IIM-A and donors.

 

The Hyderabad-based Indian School of Business (ISB) has various facilities named after donors, including lecture theatres. According to IIM-A’s 2011-12 annual report, total income from various sources rose to Rs151 crore from Rs132.7 crore in 2010-11. In 2011-12, the fund corpus was Rs63.63 crore, out of which Rs62.62 crore was the endowment fund (donation corpus). The Comptroller & Auditor General of India audits the accounts of IIM-A every year. 2012-13 accounts haven’t been published yet.

 

Source:The Economic Times

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