Endowment fund enables ‘big step forward’ in HE, research

The Indonesian government’s endowment fund for education, higher education and research is expected to disburse around IDR120 trillion (almost US$8 billion) this year – including funding for scholarships for Indonesians to study abroad – according to its latest figures.

Andin Hadiyanto, director of the Indonesia Endowment Fund for Education (LPDP), which manages the fund, has said that, since the fund was set up under the finance ministry in 2010 to improve human resources, at least IDR99.1 trillion (US$6.58 billion) had been disbursed up to the end of 2021.

Of this, the equivalent of US$531 million went towards research, US$465.2 million to universities and the rest to primary and secondary schooling – the largest recipients of disbursements from the fund – as well as cultural projects.

Scholarships are provided by the fund to awardees studying at universities in Indonesia or abroad – with about a third of the recipients on undergraduate or postgraduate programmes overseas.

Hadiyanto told local media: “We provide 4,000 scholarships [per year] for masters students to study at home or abroad,” adding that the number was unchanged from last year.

Up to the end of 2021, the LPDP had granted scholarships to 29,872 students from all over Indonesia and financed 1,668 research projects.

Driving research and innovation

Jatna Supriatna, director of DIPI – the Indonesian acronym for the Indonesian Science Fund, which directly funds researchers, said the LPDP is essential for driving research and innovation in universities.

Jatna, who is also a biologist at the mathematics and science faculty of the University of Indonesia (UI) and chairman of the UI Research Centre for Climate Change, told University World News: “We have seen significant improvement of research quantity and quality during the past five years, as access to research funding is easier. LPDP has enabled a big step forward in the realm of science and education.”

“UI, for example, has increased its research publications by 20% this year alone, which means UI spent more on funding research,” he said.

Jatna said UI would not have achieved this significant increase in research output if it had relied solely on funding from the government budget for higher education and research which meets only 25% of the UI’s operational cost.

“We should raise funds. That’s why UI has its own endowment fund,” he said. He noted that universities in Indonesia in general had been increasing their research output, which “means they are spending more money on research. A large portion of it comes from the endowment fund.”

The existence of the government endowment fund as well as the endowment funds of individual universities guaranteed sustainability of education, he said.

“In bahasa Indonesia [the Indonesian language], the endowment fund is called dana abadi, which literally means ‘eternal fund’. We call it eternal because the fund is not decreasing. We use only the interest,” he explained.

Government incentives

Last month, Nadiem Makarim, the Indonesian Minister of Education, Culture, Research and Technology, announced the government would award about IDR6 billion to every state university that can set up and independently manage its own endowment fund, including raising money for their fund from alumni and businesses.

Nadiem said the funds to university endowments would be disbursed as “seed money” through LPDP with the aim of encouraging the funding of world-class research in Indonesia.

The minister noted that university funding in Indonesia was low compared with countries like Malaysia and India, but universities could not rely solely on government funding and student fees. They needed to set up endowments.

Hamid Chalid, UI’s former vice-rector for human resources and cooperation, said the government budget covers only 25% all the university’s IDR2 trillion operational costs.

“We finance the remaining 75% from our own educational revenue as well as from our businesses, including from our [university] endowment fund,” he said, adding that, every year, UI spends IDR200 billion on research and 20 billion on scholarships.

UI’s success in raising money for its endowment fund, according to Jatna, was due to its graduates’ strong commitment and sense of belonging. “Some UI graduates have become businessmen. They love their alma mater and want to do good by it. So they make contributions,” he said.

Last year, UI alumnus Purnomo Yusgiantoro, a former three-time minister of energy and former minister of defence, made a contribution of IDR50 billion to UI’s endowment fund through his non-profit foundation, the Purnomo Yusgiantoro Center, which secured donations from his fellow UI alumni.

“We are witnessing good collaboration between universities, their graduates, the public and the business world,” Jatna said.

During a gathering of the Padjadjaran University (Unpad) Graduate Union on 3 July, Unpad’s rector, Rina Indiastuti, said her university had an endowment fund, but it was not enough.

She called on Unpad graduates to contribute to the fund “which we need for scholarships, research, innovation and to build a green campus”, she told the gathering.

Scholarships and researcher funding

For undergraduate or postgraduate students who are about to complete their studies, gone are the days of tiring efforts to find research funding.

Students now go to the LPDP website, create an account and upload the information required. If all goes well, their research proposal will be approved and, after a while, they get the money required.

The LPDP website says disbursement will be in two tranches. Researchers receive 70% of the proposed amount in the first term and the remaining 25% after passing their thesis test.

Andi Hakim, a lecturer at the state-run Bogor Agricultural University (IPB), an LPDP awardee, urged students to look to the LPDP for scholarships.

“I know what it means. I came from a poor family which was unable to send me to university. I applied for a LPDP scholarship to study at the Bogor Agriculture University to acquire my masters degree in hydrology. I graduated in 2015 and now I am one of IPB’s lecturers,” he told University World News.