Size and Usage of Endowment Funds of Autonomous Universities in Past Five Years

10 Mr Ang Wei Neng asked the Minister for Education for each of the six local Autonomous Universities (AUs) (a) what is the size of their endowment fund in each of the past five years; (b) what is the current amount of funds and reserves accumulated; (c) what are the top five uses of these funds; and (d) how much of these funds have been used in each of the past five years.

The Minister for Education (Mr Ong Ye Kung): The size of the endowment funds of our Autonomous Universities are available from their financial reports. Based on these reports, the sizes at the end of Financial Year 2017 are: NUS – $5.9 billion; NTU – $1.9 billion; SMU – $1 billion; SUTD – $1.1 billion; SIT and SUSS – both $0.4 billion each.

The Member also asked for the reserves accumulated. Reserves are operating surpluses, if any, accumulated over the years. They are typically tied up in assets, which can be buildings, facilities, long-term investments and so on. The numbers are also available in the financial reports of the AUs so I will not read them out here.

So, what is pertinent is the use of endowment funds. The AUs set up endowment funds, with Government support, because they should have a separate stream of income such that they can embark on their own programmes and activities without always depending on the Government. 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 endowment income is to pay for operating expenditure in delivering subsidised education. And this is because MOE contributes significantly to the endowment funds of the Universities, by matching donations that they raise.

The other major uses are providing bursaries and scholarships, supporting additional programmes to enrich students' learning, such as overseas internships and residential learning programmes, funding research projects and sponsoring professorships.

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. 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 Ang Wei Neng (Jurong): Mr Speaker, I thank the Minister for the comprehensive reply. Can I just seek a couple of clarifications? I have done a quick check. It appears that NTU gives out more bursaries and scholarships compared to NUS although NUS has a reserve of $5.9 billion which is more than the twice the size of NTU's. And SUTD, although it has the least reserve of the three AUs, has more than half of its undergraduates receiving grants for education opportunities and bursaries and scholarships.

So, can MOE clarify whether is that discrepancy or is there suppose to be a correlation between the number of bursaries and scholarships given by each AU compared to the reserves they have?

A second clarification is that, is there a cap that MOE will set for them for the size of endowment fund that AU can accumulate over the years?

Mr Ong Ye Kung: I do not have the exact numbers and breakdowns to give an analysis. I am also not sure whether it is factually correct that NTU provides more bursaries than NUS. We should also take into account – that only part of the bursaries and scholarships is funded through the endowment. There are also non-endowed donations where donors, they donate to the University but it is non-endowed, that is, "I donate $100,000. Please use this $100,000 to distribute and help needy students." Those are non-endowed donations and NUS also has a lot of that. So, I think, that assertion I am not sure if it is true. We really need to break down the numbers to compare NUS, NTU, SUTD and so on and so forth.

Is there a limit? There is currently not a limit because our Universities have started building endowments maybe over the last 20 years or so. Compared to international universities, their endowments are not excessively large at all. In fact, many international universities have endowment funds much bigger than that. And also, more importantly is the incomes from the endowment funds – they are put to good use. NUS recently put out a statement outlining what they use their money for – it is for research, for bursaries and to help with residential programmes. And so, they have good uses for it. And so long as there are such good uses, and donors are prepared to part with their donations to support the institution, then I think we should encourage that and Government will continue to match one-to-one or 1.5-to-one.

Assoc Prof Walter Theseira (Nominated Member): Mr Speaker, the richer Universities are effectively able to provide more resources to their students. So, I wish to ask the Minister if he thinks that this situation is equitable and whether the Ministry has any policies 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.

Mr Ong Ye Kung: So, there is some issue of social inequality between the AUs. Just like society, we redistribute wealth, we support the weaker members of society more, but AUs are all not that weak, including our new AUs such as SIT, SUSS. They are not bad – within a short period, they have built up $400 million each. And part of the reason is that, from Government's point of view, for the new Universities, we match three-to-one. So, for every dollar endowment fund that you raise, we match three-to-one, whereas for a much more established Universities, with a larger reserve, we will match much less.

Having said that, I do not think we want to be too draconian in redistributing the endowment. The logic is not dissimilar to a society because these are donors who willingly part with their donations to support the Universities. They probably saw something they like institutionally and how they use their funds and decide to donate to that particular cause. And I think we should not discourage them either.