The first English issue of MGIMO Journal: MGIMO Endowment celebrates its 10th anniversary

28 March 2019

The first endowments appeared in Russia after the adoption of the Federal Law on endowments for non-profit organizations in December 2006, and in the following year the first funds were already created.

Of course, we are in the very beginning, and the entire market of Russian endowments is estimated at about 20 billion rubles (about $ 300 million). Just compare: the largest university endowment is located in America, Harvard has 36 billion dollars. It is no surprise then that the USA is the indisputable leader here - the American market of endowments is 567 billion dollars.

The foundation of MGIMO Endowment was laid by our graduates who now occupy high positions in the Forbes list: Alisher Usmanov, Vladimir Potanin and Patokh Chodiev. They have contributed significant sums and regularly support the University projects. Their example was followed by other MGIMO alumni. For some, it is a sign of gratitude to alma mater for the knowledge gained or it’s a manifestation of social responsibility, for others - the opportunity to present yourself and your company as a part of MGIMO community.

The strategy of MGIMO Endowment is determined by the University's management. The members of the Supervisory Board and the Board of Trustees give recommendations and support the most important projects for the University.

We have drawn up an investment strategy together with the management companies. It takes into account the optimal risk-return ratio. For MGIMO Endowment, these are mainly corporate and federal bonds and, in part, currency instruments (Eurobonds, dollar deposits). The foreign exchange portfolio is justified by the fact that a significant part of the expenditures is carried out in dollars and euros (foreign trips of professors and student internships, invitation of foreign lectures). Thus, with fluctuations in the exchange rate, our costs remain unchanged. The bonds provide a yield of about 12-13% (based on the results of 2017). There are short and long-term bonds in the portfolio. The manager monitors and takes part in new placements. We look at the stock market, which may show more growth (or decline). However, the return of MGIMO Endowment is already an integral part of the university's budget, and the loss of funds is simply unacceptable. Conservative strategy allows not only to save funds, but also provides a real increase, by 5-7% ahead of inflation.

Our endowment develops a fundraising strategy, signs donation agreements, conducts grant competitions for students, administers project implementation and prepares reports. One of the latest interesting non-financial projects was “MyMentor”, where graduates act as mentors to students, helping them to make the first steps in their careers.

MGIMO works actively with foreign partners and graduates. Significant assistance to MGIMO is provided by a large businessman Frederick Paulsen. A few years ago, IKEA made a big contribution to the Endowment, and recently we have had a collective contribution of the MGIMO Alumni Association in Vietnam.

Grantees of Endowment are employees of the University, professors and students – everyone can implement a project that philanthropists are ready to support: they conduct research, write books, organize scientific events. Such student conferences as "Days of Science" and "Business Spring" have already become traditional and iconic for our University. In addition, at Russian and international events, teachers and students represent the University and act as "ambassadors" of MGIMO.

Endowments unite in professional communities: the Donor Forum, UnivEn - the University Endowment Association, these organizations work to popularize the notion and solve the tasks related to increasing efficiency.

10 years is not such a long term for endowments, but their role has grown significantly. 10 years ago, the contribution of Endowment to MGIMO budget was only 2%. Today, its part reaches 6% of the University budget, despite the fact that the budget itself has increased 2.5 times! And together with the sponsorship funds coming directly to the University, the share of the target means exceeds 10%. In total, 650 million rubles have been transferred to MGIMO within these years, and the endowment holds about 1.5 billion rubles.

The full version is available here.