SINGAPORE — While endowment funds for the six autonomous universities (AUs) range widely from $400 million to $5.9 billion at the end of the 2017 financial year, the government does not want to be “too draconian” in redistributing the funds, said Education Minister Ong Ye Kung in Parliament on Tuesday (3 September).
Ong was responding to a supplementary question raised by Nominated Member of Parliament (NMP) Associate Professor Walter Theseira who asked whether there are any policies by the Ministry of Education (MOE) to try to “level the playing field if it is true that the richer universities can give more opportunities to their students than the poorer ones”.
Ong had earlier cited the figures for the endowment funds of the six AUs from financial reports, in response to a question tabled by Jurong GRC Member of Parliament Ang Wei Neng.
The National University of Singapore had the biggest endowment fund of $5.9 billion at the end of the 2017 financial year, followed by the Nanyang Technological University at $1.9 billion, Singapore University of Technology and Design at $1.1 billion and Singapore Management University at $1 billion.
The two newest universities, Singapore Institute of Technology (SIT) and Singapore University of Social Sciences (SUSS), each had an endowment fund of $400 million.
“So there's some issues of social inequality between the AUs. Just like society, we redistribute wealth to support the weaker members of society more, but the AUs are not that weak, including our new AUs, SIT and SUSS,” said Ong.
He noted that SIT and SUSS had built up a significant sum within a short period and part of the reason is that the government matches three to every dollar raised in their endowment funds.
Comparatively, for more established universities with larger reserves, the government will match 1:1 or 1.5:1.
“Having said that, I don't think we want to be too draconian in redistributing the endowment,” said Ong, adding that the logic is not dissimilar to a society where willing donors support a university of their choice.
“They probably saw something they liked institutionally, and how you use your funds and decide to donate to that particular cause. And I think we should not discourage them either,” he added.
Uses of endowment funds
In response to Ang’s questions on the AUs’ accumulated reserves and the top five uses of these funds, Ong explained that the former consists of operating surpluses, if any, accumulated over the years, which are typically tied up in assets, such as buildings, facilities, and long term investments.
The AUs’ endowment funds are set up, with the government’s support, because they “should have a separate stream of income” to embark on their own programmes and activities without always depending on the government, he added.
Every year, investments from the endowment fund will generate a return, and only a portion of the investment returns is spent, with the rest re-invested.
“The biggest use of the endowment income is to pay for operating expenditure in delivering subsidised education. This is because the MOE contributes significantly to the endowment funds of the universities, by matching donations that they raise,” said Ong.
Other major uses also include supporting bursaries and scholarships, additional programmes such as overseas internships and residential learning programmes, funding research projects and sponsoring professorships, he added.
“It is common practice internationally, for universities to build up their endowment funds through donations to support students and activities outside of education, such as research and enterprise,” said Ong.
He added that donations are always voluntary and that donors to the AUs will typically specify how the monies are to be used.
In response to Ang’s supplementary question on whether the government will issue a cap on how much the AUs can accumulate in their endowment funds, Ong explained that there is no current limit because the AUs have started building these funds over the last 20 years or so.
“Compared to international universities, their endowment funds are not excessively large at all. In fact, many universities, international universities, have endowments much bigger than that,” he added.
“More importantly is the incomes from the endowment funds are put to good use.”