ENU discussed prospects for developing Kazakhstan endowment funds
An Endowment Association will be established in Kazakhstan and a draft law “On Endowment Funds” will be drawn up. This was reported by the participants of the III International Endowments Conference hosted by the L.N. Gumilyov Eurasian National University.
The conference brought together representatives of government agencies, financial endowment and financial sector, endowment funds and universities of Kazakhstan, Russia, Kyrgyzstan, Uzbekistan and Tajikistan.
The participants discussed the state and prospects of development of endowment funds in Kazakhstan, the role of government agencies in supporting and regulating their activities, innovations and technologies in asset management of endowments. Moreover, the experience and practice of endowment funds in the CIS countries were reviewed at the event.
During the conference, ENU Rector Yerlan Sydykov focused on the key role of endowments in ensuring sustainability and competitiveness of educational institutions. He noted that in 2022 the university held the first forum “Endowments of Kazakhstan”, which became a launching pad for the development of the necessary regulatory framework for the activities of endowment funds.
“In 2021, our alumni created ENU Endowment Fund, which is currently successfully promoting our talented students. They apply world practice, where the fixed capital remains untouchable and support for students is provided only at the expense of investment income. As you know, Head of State in his address to the people of Kazakhstan noted that endowment funds at universities should become a key link in the development of the educational ecosystem. Today, thanks to the support of endowment funds, world educational institutions can implement breakthrough projects. Endowments become a bridge between the academic world and the business community, between the university’s past, present and future. I am convinced that such conferences contribute to improving the quality of money management in non-profit organizations, as well as expanding opportunities for sustainable development and effective fundraising,” the scientist noted.
Advisor to the Minister of Science and Higher Education of the Republic of Kazakhstan Farkhad Kuanganov noted that the Eurasian National University was the first initiator of the movement of endowment funds in Kazakhstan. He noted that during the development of the draft law, there was studied the international experience of all countries with existing endowments.
“A year ago, the conference participants prepared recommendations and proposed the development of a separate law on endowment funds. Today, the issue has moved to the practical plane. The need to adopt a separate law is precisely due to the lack of norms in the current legislation on motivation for potential depositors, proper investment and control of the expenditure of depositors’ funds. A separate law is needed just like the practice in all countries with successful endowment funds. In Kazakhstan, endowment funds are forced to register a legal entity in the form of a corporate, investment or some other fund, which complicates the activities provided for by the law on charity and causes disputes over taxation. The structure of the bill is built according to the requirements of the Kazakhstani legislation. During the development, we tried to preserve and make maximum use of the existing norms on endowment funds,” the speaker explained.
Svetlana Lavrova, Chairman of the Management Board of the National Endowment Association, dwelt on the activities of endowment funds in the Russian Federation.
“From various sources of university funding, only an endowment can ensure the long-term sustainability and university independence in every sense of the word. The need for an endowment arises for a strategic perspective. If you are planning for the category of 3-5 years, then short-term sources of financing are sufficient. The activity of endowment funds consists of 3 parts. We collected money, then invested it in the financial market, receive income and use only income. The endowment has 2 parents: the university and the management company – a financial company that invests this money in order to generate income for the university,” the expert shared.
Managing Director of the Association of Financiers of Kazakhstan Yerlan Burabayev noted that the financial market actually joined the active participation in the creation of the system of endowment funds of Kazakhstan only this year.
“We have percieved with interest the proposals for the development of endowment funds in Kazakhstan. Naturally, the financial market, as a system engaged in the redistribution of capital in the economy, is interested in the part that the money that is formed in endowment funds is long-term money for the economy. This is the most important element for the financial market,” the financier added.
As a result of the conference, a resolution was adopted where the participants decided to create an Association of Endowments of Kazakhstan to standardize methods and provide a platform for continuous learning and dialogue. The experts also gave a positive assessment to the draft Law of the Republic of Kazakhstan “On Endowment Funds”.
It should be noted that the ENU Endowment Fund was created by the alumni of the L.N. Gumilyov Eurasian National University. The target capital of the fund remains inviolable and has a cumulative nature. Financing is carried out only at the expense of the received investment income. The founders of the endowment fund provide support to talented and needy students and promote scientific, innovative and entrepreneurial activities of students. About 30 students have already received nominal grants and scholarships from the ENU Endowment Fund.