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Seeking immortality October 1, 2006

Posted by Sharath Rao in economics, littlerockers.

Something here about why something may not work as well I would like it to !!.

Okay, okay, I get high marks for using 15 words to say nothing 🙂 !

Well, before that about this link I came across about Harvard’s endowement size, the money that the alumni and other well-wishers ( usually both are the same ) contribute to the fund.

Harvard’s endowment grew $3.3 billion during the fiscal year ending June 30, reaching an all-time high of $29.2 billion, according to figures released today. The Harvard Management Company (HMC), the internal arm responsible for managing the University’s endowment, returned 16.7 percent on its investments. This year’s performance was “just above the average” for the 25 largest university endowments, HMC President Mohamed A. El-Erian wrote in his first annual “John Harvard” letter. It is down from last year’s 19.2 percent return and the 21.1 percent return achieved in 2004.

HMC’s performance was particularly strong in emerging markets—the University earned a 37.8 percent return in this asset class, which includes industrializing economies such as India, China, Russia, and Brazil.

Insane, isnt it ! $29 billion dollars !! Thats probably Fortune 50 ! ( Actually, I checked, its more like Fortune 60 ) . They actually have a fund management company that manages these funds. Wow !

There is something interesting there – that Harvard ( I think others do too, only I am not sure ) ensures that not only does it get some of the best students, they also ensure that they get as much as money from as possible. How do they do that ? Legacy admissions. Rich Harvard alumni make contributions so that their rich kids go to Harvard, who generally grow up to rich, if not richer, and send their kids to Harvard. And sometimes, your father doesnt have to be a rich Harvard alumni, just rich would do. How else do you think so many of celebrity kids attend Harvard ? Ever heard of these kids go to the IITs ? Yeah, perhaps for a cultural fest performance.

Anyway coming to the point of this article, my school Little Rock is in its 25th year. And so, on an infinitesimally smaller scale than Harvard, they are seeking funds for the Silver Jubilee project I wrote about in the alumni blog here.

As an added incentive to contribute larger amounts, they have decided to have those contributors’ names carved on marble near the project site, who contribute amounts larger than Rs. 5000 (about $110.00 ) – a chance for people to make their moral claims to immortality. In most likelihood that building and your name will stand there long after you are gone. Think about it – where else will your name ever be carved in marble ? ( Unless you decide to do so on reading this post ! )

Little Rock are seeking funds from current parents and old students. I somehow have a feeling there will not be a significant contributions from old students. Firstly, there are few that are themselves employed for a long time. There are about 8 batches of students that are currently working with different earning capacities. Secondly, I think giving back is somehow not such an important part of our mindset, atleast not among the 20-somethings. Most people will talk about their great days at school and how they have learnt stuff, made friends and how Little Rock might even be the best school they ever attended, or that ever existed. But money is serious business !

Thirdly and most importantly, its not just about the alumni. Its about the school too. If someone was actually actively pursuing the alumni, things may have been different. Little Rock however, has chosen to merely put up the notice on the website which most people do not visit regularly. I think it requires real effort to go after people and make them pay up when they have no direct obligation to the school unlike for example, the current parents. The parents of current school students somehow feel more of a moral obligation and they will be actively pursued due to their accessibility.

The alumni, however, arent directly accessible, again because not enough energy has gone into it. Perhaps the Silver Jubilee celebrations cum Alumni reunion this December may help bringing the alumni under an official umbrella. But then that is being scheduled for a Tuesday-Wednesday this December. I fear the attendance will be much less than it would be if it were a weekend. The truth is that in most cases, people will find it rather hard to obtain leave from work and travel to that little corner of the world. The school might think – “If they really love their school, they will want to come.” The alumni thinks,”if the school really wanted people to attend, they would have scheduled it for a weekend.” In such a contest, it boils down to who needs whom more. Or perhaps that is a cynical way to look at it. Well, maybe the cynical way is, for once, the only sensible way to look at it !

I wrote to the principal about it but it doesnt appear that the event can moved to a weekend. I frankly dont know why. Simple game theoritical observations suggest that if its on a weekday, people think most people cant attend it. And since most people are attending the event to meet most other people who attend the event, more people will back out. The equilibrium for this would be that finally none will show up because everybody thinks none will show up !! Ofcourse economic models are far from perfect and event will be attended by a small section of people who are there to see the place, the campus, meet people who are certain to be there – teachers, non-teaching staff etc. and meet a few other students who are there for the same reason !! Well,

Some pessimism here isnt it. I would be happy if I were wrong, but not surprised if I were right.

And by the way, I just sent in my $115.00 contribution. Ashith did too. I hope many many more people do contribute amounts to their liking.

Some optimism isnt it. I would be happy if I were right, but not surprised if I were wrong !



1. Aswin - October 3, 2006

It would def be interesting to have data on the ages of the contributors to Harvard. I might expect the biggest contributors to be the oldest, but one can never say.

Most Little Rock alumni are either very early on in their careers or haven’t even started their careers. I cannot expect the vast majority to contribute Rs.5000 unless they think they have that much money to spare – a feeling that is very rare in most people’s lives, mine included… the only exceptions would be perhaps after you have retired and are wondering what to do with your money – which is why I expect the biggest contributors to be the oldest.

I will definitely contribute $$ once I start work, but for now, Little Rock will have to do with just my 2 cents. 😉

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