Redistribution of university endowment funds should not be ‘too draconian’: Ong Ye Kung

Redistribution of university endowment funds should not be ‘too draconian’: Ong Ye Kung

File photo of National University of Singapore
File photo of the National University of Singapore (NUS). (Photo: Alif Amsyar)

SINGAPORE: The redistribution of university endowment funds should not be "too draconian" and there are donors who want to support specific universities for different reasons, said Education Minister Ong Ye Kung in Parliament on Tuesday (Sep 3).

He was replying to a supplementary question from Nominated Member of Parliament (MP) Walter Theseira, who asked if a situation where richer universities are able to provide students with more resources is equitable.

Associate Professor Theseira, who works at the Singapore University of Social Science (SUSS), also asked if the Education Ministry has any policies "to try to level the playing field" if it is true the richer universities can provide more opportunities to their students.

Earlier, Mr Ong had provided figures about the endowment funds of the country’s six autonomous universities (AUs).

By the end of the 2017 financial year, the National University of Singapore (NUS) had the largest endowment fund of S$5.9 billion.

It was followed by the Nanyang Technological University (NTU), Singapore University of Technology and Design (SUTD), and Singapore Management University (SMU) whose funds stood at S$1.9 billion, S$1.1 billion and S$1 billion, respectively, Mr Ong said citing figures from the universities’ financial reports. 

The SIT and SUSS had endowment funds of S$400 million each for the same time period. 

Mr Ong explained that the newer universities received more in Government grants for every dollar they raised, compared to their older counterparts.

"Just like society, we re-distribute wealth, you support the weaker members of the society more," Mr Ong replied Assoc Prof Theseira.

"But our AUs are not that weak, including our new AUs – SIT and SUSS, not bad. Within a short period, they built up S$400 million each."

He added: "Part of the reason is that from the Government's point of view, for the new universities, we matched three to one.

“So for every dollar of endowment fund that you raised, we match three to one, whereas for a much more established university with a larger reserve, we will match much less.

"Having said that, I don’t think we want to be too draconian in re-distributing the endowment."

Mr Ong added that the logic was "not too dissimilar to a society" because there are donors who want to support specific universities.

“They probably saw something they liked institutionally and how you use their funds, and decide to donate to that particular cause, and I think we should not discourage them either.” 

USE OF ENDOWMENT FUNDS

Jurong GRC MP Ang Wei Neng asked about the amount of funds and reserves accumulated by the six local AUs, the top five uses of these funds, and how they have been used in the last five years.

Reserves are operating surpluses accumulated over the years and are typically tied up in assets, which can be in the form of buildings and long term investments, Mr Ong said.

“What is pertinent is the use of endowment funds,” the minister added.

With Government support, the autonomous universities set up endowment funds “because they should have a separate stream of income such that they can embark on their own programmes and activities without always depending on Government”, he explained.

Every year, investments from the endowment fund will generate a return. Only a portion of these returns is spent, with the rest re-invested. The Education Ministry also "contributes significantly” to the universities’ endowment funds by matching donations that they raise. 

Mr Ong noted that the biggest use of the endowment income is to pay for operating expenditure to deliver subsidised education.

Other major uses include providing bursaries and scholarships, funding research projects and sponsoring professorships, as well as supporting additional programmes such as overseas internships. 

"Donations are always voluntary, and decided by donors based on their trust in the organisations and their causes. Donors to AUs will typically specify how the monies are to be used, which AUs do not have the liberty to change," Mr Ong said.

There are currently no limits to the sizes of these endowment funds, Mr Ong said in response to a supplementary question from Mr Ang, who had asked if there is a cap on the size of endowment funds at each university.

He replied: “Our universities have start building endowments over the last 20 years or so. Compared to international universities, their endowments are not excessively large at all.” 

More importantly, the income from the endowment fund have been put to good use, the minister said. 

He cited a recent statement by NUS, which said that it spent its income from its endowment funds and donations on research, bursaries and to help with residential programmes.

“There are good uses for it and so long as they are and donors are prepared to part with their donations to support the institution, I think we should encourage that. Government will continue to match one to one or 1.5 to one,” he said.

Source: CNA/sk

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