‘We are looking to raise half-a billion dollars for the next phase of Ashoka’-Business Journal
Aug 11, 2022
‘We are looking to raise half-a billion dollars for the next phase of Ashoka’-Business Journal
The story of higher education in India is a concerning one with perhaps more misses than hits. Since independence, apart from the IITs and IIMs and a few central universities, few institutions of note have come up in the country. Indian universities are missing from the list of top hundred universities in the world, and only about two dozen featured in the top thousand. An interesting development in this regard in the last decade or so has been the emergence of a number of private universities that aspire to world-class standards, especially in the liberal arts, the most notable among them being the Ashoka University based in Sonipat near Delhi. What makes Ashoka interesting is that it is funded by several philanthropists, making it impossible for any one person or a small group to control the university. Pramath Raj Sinha, founding Dean of the Indian School of Business in Hyderabad and the founder of Harappa education, among others, besides being one of the founders of the Ashoka University; and Ashish Dhawan, founder of Chrys capital and chairman of the board of Trustees at Ashoka University, talk to Mint’s Editor-in-Chief Sruthijith K.K. about what ails Indian higher education, their learnings from building the Ashoka University and about how philanthropy can be channeled into institution building. Edited excerpts from ‘The Sketch’ podcast. …
Sruthijith: Pramath, I want to talk about what ails Indian higher education. What are the top two or three factors that you think are important in this regard? Sinha: Put simply, we haven’t been able to get quality education to as many people as we need to in India. So, both in terms of numbers and in terms of quality, we have a huge deficit and, while there are a few high-quality institutions and they do give us good graduates, the truth is that they have not been able to keep up with the best in the world even so many years after they were founded. So, we have a reasonable quality of education for a few people, but we certainly don’t have top quality compared to global levels. We still have it for very few people, given our GER numbers. Sruthijith: Can you explain GER? Sinha: GER is just gross enrollment ratio, and what you look at is for a particular age of people or population, the number of people who are going to college or to school, relative to how many would or should be in school or college. So, if you have 25 million kids being born every year, you would argue that there are about a hundred million college-going youth. If you take a four-year window today, our official numbers are that about 26-27%, or one in every four, alone is enrolled in college in the 18 to 22 years age group. That’s the GER. Sruthijith: How does that compare with China and the US? Sinha: Those are way upwards of 60-70%. I don’t exactly know the numbers, but in most advanced economies or even developing economies, this is in the 60-70% range. Dhawan: China has touched about 50% now. Sinha: Even smaller countries like Thailand are way higher than that. We certainly have a large base; our aspiration as a country is to get to 50% by 2040. But, there again, if you look at quality GER, one in four is enrolled technically in one of the top 5,000 institutions globally. That number would be in single digits. And that’s the challenge though. So, you are looking at maybe one in 10 or 20 people going to a quality higher-education institution in the country. Sruthijith: So, I suppose, as a nation, these are twin pronged priorities. On the one hand, you need to increase the base and so you need the GER to double over the next 20 odd years. But more importantly, if we want to create a workforce that is globally competitive and very elite, we also need to raise that percentage in the top thousand universities of the world. What have been the impediments in this journey? What are the factors that are holding us back? Sinha: There are many impediments, but I think the chief impediment is that we’ve got ourselves locked into a vicious cycle. One of the simple impediments is that education has always been a public good around the world and we just haven’t had the resources to invest. Now, in most countries, you will not find so much private investment in education. The government ends up spending a fair bit of money in terms of resources. We are short of resources in every area, which is why you need private capital philanthropy. But now that private capital is coming in, I think our regulatory environment has been focused on inputs rather than outputs. If you look around the world, this is a problem that has been solved where people say, ‘listen, let’s look at the quality of graduates coming out and based on that, I will give you funding’. We have been very suspicious of private funding or private university. So, we have created a license mechanism. How many classrooms have you built? How much area do you have? How many bathrooms do you have in the university? Do you meet these standards? Now, those standards are well and good, but that by itself doesn’t ensure quality. And there is no mechanism then to say, let’s look at quality. We have now put in things like accreditation and so on, but we hardly get to cover all these institutions that are out there. And the fact is that we are not able to monitor output. All the rules that we have are all focused on inputs. You neglect to measure output and therefore sift out the ones that are not doing so well. At the end of the day, we really haven’t invested in the soft infrastructure that goes into any education system. We need more faculty members, but more importantly, the governance and the leadership of these institutions is extremely important. Today, with regard to Ashoka, you need great vice chancellors, provosts and deans and heads of department. You need educational administrators who are professionally trained. The real issue is you need great institutional leaders who need to be trained, groomed and appointed to these leadership positions based on true merit, and not some sort of an automatic process or a selection process that is flawed. And these universities have to be given independence to run. So, you fix the output and you say, this is the output I need. How you run it is up to you, as long as you’re running it within certain boundaries. But a lot of universities either become too driven by the government or some other owner, an individual or a foundation. Even if it’s with the right intent, they don’t understand what the quality of education should be. And so, governance and leadership again go for a toss, despite people having resources. Those are some of the factors that are really getting in our way of being a world-class system. Sruthijith: Ashish, what is the role that philanthropy has played in building enduring institutions around the world? Dhawan: I think philanthropy can actually play a very important role. In the US, the early philanthropists were Andrew Carnegie and John D Rockefeller. Carnegie founded Carnegie Mellon university. It’s one of the leading institutions for engineering and computer science. And he set up many other institutions, including the national bureau of economic research, which exists till date. Rockefeller is another great example. He did some programmatic work, but he soon realized that he needed to institutionalize. And so, the Rockefeller University, which is a leading research university, was set up by him, and the University of Chicago as well. I think these early philanthropists in the US realized that programmatic work fizzles away; it doesn’t sustain. And if you had to sustain, you have to institutionalize it. Whether it’s a university, a public health institution, a museum that’s focused on arts and culture, some institutional construct is critical. Sruthijith: When you say programmatic, are you referring to certain limited campaigns or small programs or limited programs? Dhawan: I think donors often give funds to an NGO for a three-year to five-year period of time for a body of work. And that body of work then doesn’t sustain thereafter, and that’s what I mean by fizzles out. And that’s generally the norm in the philanthropic sector. I don’t mean all institutionalization has to be for higher education. It could be other forms of institutionalization as well. And then in India we often forget that some of our early institutions, including Calcutta university, were actually set up by local philanthropists that funded buildings or funded particular aspects of the university. The same is true with many of the colleges of Delhi university like Lady Shri Ram College. There has been private participation in building institutions, even in the Indian context. And then in an independent India, the state took over and did a great job setting up the IITs and IMS. As we move towards more of a preponderance for professional degrees in India, focused on engineering and other disciplines, we had a slew of private universities come up. They’ve done a good job in scaling up. For a while, the private sector participation was around massification, not around building quality. It’s in the more recent past, really, with ISB starting about 20 years ago, that there was this idea of private, philanthropic capital coming together to build a quality institution. In the US, if you look at all the leading private universities, they’ve been built on the back of philanthropic capital, be it Stanford, Harvard, Yale, Princeton, Chicago. I think the new set that is emerging in India could very well be alongside some of the leading public institutions, and 10-20 years from now will be among the top 10-20 universities in India. Sruthijith: Isn’t private endowments a uniquely north American phenomena. If you look at Europe or most of the parts of the world, isn’t higher education dominated by institutions set up by the state? Dhawan: In Europe, there are more state-led institutions, fewer examples of private philanthropy. In America, private philanthropy took off and really funded these institutions over the last 100-150 years. The state has played a more dominant role, especially in China and Singapore and Hong Kong. So, I think a lot really depends on the local circumstances. And in some cases, it’s a mixed model where there are great public universities and private ones as well. Sruthijith: Could you survey the landscape for us in India? Dhawan: I think Ashoka clearly has been a pioneer in interdisciplinary, higher education. And that was our model when we started a decade ago. Jindal university started a little bit before Ashoka and has a great law school, some other programs, and then later followed it up with interdisciplinary education as well. Shiv Nadar University started with an engineering school, a management school, expanded the humanity, social sciences, sciences thereafter and so they are a full university. Azim Premji University started with a stronger focus on the development sector, but has expanded to humanity, social sciences and the fundamental sciences. Krea is a university that covers all these domains as well. There is Flame University which started as a college. I think there are about 10 or so of these private universities that have come up. BITS Pilani stood head and shoulders above the others and it’s been philanthropic. It’s different from the others in terms of its intent. View Full Image
Sruthijith: All of them are of varying sizes in terms of funds and budgets and all of that. Dhawan: Somewhat different, and everybody has their own unique focus as well, some are very broad and want to cover everything. Azim Premji University is quite broad, but I think it has a focus on producing leaders who go and have an impact on the ground and definitely has more of a focus of the overall foundation of justice and a humane society. So, it’s more development oriented. For Ashoka, as I mentioned earlier, the big focus was on interdisciplinary, and really high-quality research. So, every one of these has a slightly different flavor, although I think all of them will evolve into full universities. Sruthijith: Pramath, let’s talk a little bit about the founding of ISB. How was the inception, how did you start? Sinha: I think one of the big things that exemplify ISBs founding, which we have taken to the next level with Ashoka, has really been the collective philanthropy and the collective governance and leadership model. And I think we are truly unique with the coming together of philanthropists with very common intent and vision. But none of these are my ventures. I’ve had just the opportunity to be part of these. Going back to the early days of ISB, one of the curious things we found was none of the great universities were owned by anyone. So, Rockefeller’s name is not even on Chicago University. And Carnegie’s name may be there, but it’s really Carnegie Mellon. And there is no Carnegie sitting on the board of trustees today. In fact, it’s run probably by some distinguished alumna. So, this is a model where no one, whether it’s one person or one institution or one foundation, owns the institution. Therefore, nobody plays a dominant role in decision making and yet everybody owns it. Whoever’s part of it feels a really strong sense of ownership, whether it’s a student, an alumnus, faculty member, or staff member. And the fact that they’re all building something that they can leave behind as a legacy is a powerful emotion, culture, and sense of purpose that you need to capture. And I think we’ve been able to do that in both these institutions. The other thing that ISB had in its DNA, and we’ve got that in Ashoka’s DNA also, is the belief that you can by sitting here build a truly high-quality world class pioneering institution from day one. There’s no death of students in India. The real thing that defines good education is faculty. With Ashoka, We started with the young India fellowship (YIF) program and we didn’t even have a campus. We rented an auditorium in an existing institution. We placed our students in a hostel and we were up and running. But the 25 faculty members who taught the students in that very first year were absolutely top notch. And that set the bar from day one. Sruthijith: Let’s now come to the founding of Ashoka university. How did the idea begin? What was the initial group of folks that came together like? How did you believe that you could raise a very substantial sum to fund a large project like this? Dhawan: This group came together about 15 years ago. I think there were a bunch of former IITians also who wanted to build a broad university. All roads led to Pramath because he was the founding dean of the ISB. This group eventually whittled down and it was then just a few of us and by 2010 is when we got really serious. There was a new education city being formed in Haryana, and there was the opportunity to buy land. We scouted for land in many other places, but we figured being located in NCR was something that would work well. It’s a great hub for faculty. So, we jumped at the opportunity when this came up in Haryana and we put up the initial capital to purchase 25 acres of land in 2010. Sruthijith: At that point, did you decide the scale of the project and how much money would be put in this project? Dhawan: No, honestly, we would’ve grossly underestimated it. We initially thought the amount would be about Rs500 crore, but we got going with a much smaller amount. We said let’s first purchase land and get started. In the first phase, we started construction in 2012. So, there was the campus development, all the approvals with regards to becoming a full university that were on in full swing. We eventually became a university in 2014. We started YIF which was very innovative in that it provided someone who was graduating in engineering from the IITs or some other place with a broad education which they hadn’t received. And we weren’t sure if there would be demand for this. In the first year, we went around to many campuses, pitched the idea and about 900 students applied for it and the initial cohort was only 57. We had 25 great faculty members who taught in that initial program. And we raised money to fund the program. The initial funding was really for the land. Sanjeev Bhikchandani (philanthropist and Ashoka University co-founder) and I put in the money initially for the land. And then we crowdsourced money from some friends for the YIF’s first year cohort. And then we did it year after year. The next year we scaled the program to a hundred students. The cost per student came down and we were able to raise more scholarships. Many of us put in over and above that scholarship amount. So, there was some stability by the third year, and by 2013, the third year of the YIF, we had 3,000 applications for a hundred seats. It had already become a very prestigious programme. In 2014, we became a full university. We started to recruit full-time faculty. We launched our undergraduate programs in 2014. By then we also started reaching out to more philanthropists to come in as core partners in the project. We were now constructing a much bigger campus. So, a core group came together to fund the university. Many of them are currently our trustees and governing body members. Many of them have stepped up and contributed much more over time. In all earnestness, our fundraising process really started after we became a full university. That’s when we started to pull many other people into the project. Very quickly we created a very aspirational brand. And I think one of the reasons for this is because Ashoka was a pioneer for a new form of education in India. Interdisciplinary students could choose the subject of their choice. There was a lot of flexibility in the program. And many of the faculty members were those had completed their PhD at leading universities in the US, the UK. So, we got off to a good start with a very distinctive value proposition. And then in 2017 we expanded into the sciences. We also offer computer science, mathematics. And if you now look in 2022, we’ve scaled up quite a bit from our first batch in 2011 of 57 students. We had no degree programs or campus. About 55% of the students are women, half of them on financial aid. We have 200 faculty members, about 60 of whom are visiting and 140 are full-time at Ashoka now and we’ve built one and a half million square feet of buildings. We have several buildings already for residential, academics, sports. The campus is up and running. We have raised in the first phase over Rs1,500 crore, which funded the first 10 years, what we call the startup phase of Ashoka, with 160 plus founders and over 200 donors. Sruthijith: What’s the difference between founders and donors? Dhawan: Founders are those who committed 2 crore and above. And donors could have contributed a smaller amount. Sruthijith: And, among the founders, what would be roughly the median ticket size of their donations? Dhawan: The median would still be sub Rs10 crore. The average would be higher. Sruthijith: Who are the large donors who have very substantially given to the university? Dhawan: There are many. Of the 160 founders, I would say 30 to 40 are quite actively involved. But all 160 of them feel passionate about the course. We’ve managed to get some of the best philanthropists around the table and a governance structure. I believe we have one of the best undergraduate programs, outside of technical or professional education, in the country today, truly aspirational, and one that’s inclusive and we’ve set the ball rolling as far as research is concerned. I would say we’ve got a long journey ahead. Given the quality of people we have on board, we already are producing very high-quality research but haven’t achieved critical mass as yet. Sruthijith: Help me understand the financial engineering that goes into something like this. One is that you need to raise money to spend, to develop the buildings, to pay the faculty and so on. But you also have to simultaneously build up an endowment, which makes sure that the university sustains in perpetuity. And then how do you also make some income from the operation of the university. So, how does all of that work? Dhawan: From an income standpoint, we don’t break even as yet. We have so far cumulatively had about Rs200 crore of losses last year because of Covid. And that’s pre depreciation. If you include depreciation, the losses are Rs300 crore plus. Last year, we would’ve broken even, pre-depreciation, if it were not for covid, but we had to give up hostel revenue because we couldn’t charge students if they were not going to be on campus. Our aspiration is that the PNL should break even. The teaching PNL includes faculty cost. It funds the undergraduate program, the master’s program. That should break even and it should stand on its own feet. The research PNL, we will have to fund from the endowment and out of money we raise on an ongoing basis. That includes PhD program and certain other research costs. In terms of a true endowment, we don’t have one is yet. And when we talk about the next phase of Ashoka, it’s a critical component of the next phase. Sruthijith: You are busy setting up for the next phase of growth. What are the ambitions, what are the kind of monies you’re looking to raise? What does the roadmap look like? Dhawan: If you look at our mission, it is to build an inclusive institution with excellence in research and teaching. We want to produce responsible leaders for India and the world. We need to be a pioneering institution for interdisciplinary higher education. So far, we are a good teaching university; research has started, but we don’t have the critical mass yet. We’re small. We have 2,600 students. If you look at most of the great research universities that are in the rankings globally, they have a minimum 6,000-8,000 students, and many of them have 10,000 or more. We’re still a new university where in each area we don’t have a critical mass of scholars. Going forward, we want to keep raising the bar. We want to improve quality in every dimension, whether it’s teaching research, service excellence in operations, placement, selectivity, every aspect of what we do. We want to improve quality. Our aspirations or our benchmarks are not local, they’re global. When we compare ourselves with the best in the world, we’re still far away, so improving quality is paramount. Second is to scale our undergraduate program. We take in about 700 students a year. We can definitely scale our undergraduate program; almost double that number in the next five-six years. Third is to be more focused on research. We need a larger PhD program. We only have a hundred PhDs today. And in terms of money, we raised and spent about Rs1,500 crore in our first phase. We now want to raise about half a billion dollars out of which we’ve already circled about 20% from the existing founders. Many of us have stepped up to put in more. We are increasing our footprint. We started with only 25 acres. We now have almost a hundred acres. Sruthijith: How do you attract the best talent? A lot of your faculty are folks who were either teaching in the US or had studied in the US and just about exploring career avenues there. How do you convince them to come back and live here? What are the dynamics involved? Sinha: What the faculty essentially wants is access to really high-quality students. They get very inspired by such students either at the undergraduate or the master’s level and as well as PhD students with whom they associate to propel their work forward. This is the old guru shishya relationship. The second part of it is that every faculty member wants to do research. They want to remain intellectually engaged with the global community of peers who are in their field. So, we give them a thin teaching load, give them enough time to do their research, give them frequent sabbaticals, support them with research funds, travel money. There is a slew of things that you provide to give them the research ecosystem. And then of course incentivizing them for their research; If you are able to show your research prowess in the first five to six years, then you get a permanent job at Ashoka. Sruthijith: on the subject of faculty members, either individually or collectively, expressing an opinion that is either controversial in the current political climate, or at odds with say a dominant ideology or a political force. How do you deal with that as a university? Sinha: We don’t. I think faculty members are allowed to speak their mind and work on areas that they want to work on, they’re allowed to write, speak, say what they want, we don’t tell either our students or our faculty what they should or should not say, which is why you hear about some of the controversies. When you are building an institution, then the institution’s position comes first. I think we have to be extra careful. We can’t tell people to be either way, but we do like to tell people and tell ourselves and hold ourselves to the same standard, that when you’re building institutions, you can’t carry an opinion or a point of view on your sleeve. You can’t be an activist and be building institutions. The institution comes first, after that comes individuals who have complete academic and freedom of speech at the campus.