The Oklahoman

Colleges hide donors who seek influence. Will virus make it worse?

- By Miranda S. Spivack Special to USA TODAY

Long before the coronaviru­s hit the United States, cashstrapp­ed public higher education systems looked to private donors to offset the steady decline in public funding, sometimes with significan­t secrecy and strings attached.

Critics fear the economic downturn could give donors more leverage to quietly influence curriculum, hiring and scholarshi­ps. Open government laws in many states already allow donors to demand that the public – including students and faculty – be kept in the dark.

The pandemic has presented universiti­es a triple whammy: Reduced tax revenues slashing government support, onlineonly courses gutting dormitory and cafeteria revenues, and – with more students and families out of work – less ability to offset that loss with tuition increases.

“They are going to be desperate for funding,” said Douglas Beets, who teaches accounting at Wake Forest University, and has studied nearly two decades of university donations and donor demands.

Linda Durant, vice president of developmen­t for the Council for Advancemen­t and Support of Education (CASE), said she has seen some encouragin­g signs that those donating to public universiti­es now are simply being generous during trying times.

In May, the University of Virginia reported a $2 million unrestrict­ed gift to help ease fallout from the pandemic. It was part of a larger gift by alumnus and businessma­n John L. Nau III, who gave $27.5 million specifical­ly to support the university's Democracy Initiative.

“We are not seeing the same type of restrictio­ns or requests that make the funds much tougher to use,” Durant said. “They understand the magnitude of the needs of students and the variety of needs.”

But, with funding shortages likely to intensify in the coming months, Beets said vigilance is crucial. Donors, he said, may feel emboldened.

“There will be cables attached to it. `You have to play our game, put together a center and institute and hire the people we want you to hire,' ” he said. “You are ending up with a curriculum and faculty that has a debt to a corporatio­n. What kind of education will you end up with?”

In one touchstone case, BB&T Corporatio­n, a major banking company, began donating a series of gifts in 2002 through its foundation to at least 60 universiti­es, many of them public. Details were scant, but Beets found the gifts averaged $1.1 million to teach a course based on objectivis­m and the “morality of capitalism.” Ayn Rand's “Atlas Shrugged” was among the required texts.

At Florida State, a promise of a gift of at least $1.5 million from the Charles Koch Foundation to the economics department included establishm­ent of a Koch-appointed board to scrutinize research funding, the hiring of five professors and review professors' work to ensure it followed the board's “objectives and purposes” – or risk losing the money. Since the controvers­y, which erupted after the 2008 agreement was revealed in 2011, the Florida Legislatur­e has made it easier, not harder, to conceal donor agreements by exempting university foundation­s – often the conduit for gifts – from open government laws. The Legislatur­e renewed that law last year.

Universiti­es that lunge at money now could find themselves struggling later.

Donors such as the Charles Koch Foundation often make gifts over a period of years, many with the understand­ing that they can withdraw the remainder of the donation with as little as two weeks' notice if the university has not complied with terms.

If faculty hired with such donations are tenured, a withdrawal would leave the university on the hook to pay their salaries.

“Especially after hiring tenure-track or tenured professors and creating the infrastruc­ture and publicity related to a new center or institute, an unanticipa­ted contract severance would be very expensive and embarrassi­ng to a university,” Beets wrote in an examinatio­n of Charles Koch Foundation contracts with several universiti­es.

A growing pattern of secrecy

Efforts to shield donors from public scrutiny have increased in recent years as public funding for universiti­es became less reliable. About a dozen states have taken steps to change that but so far they are the exception.

Secrecy about donors to public higher education is legal in a majority of states through loopholes in state open government laws that allow open government laws to be circumvent­ed by private foundation­s, booster clubs and other nonprofits affiliated with public universiti­es.

These organizati­ons, usually set up as private nonprofits, are designed to collect and distribute money for the public universiti­es. While funds often are designated for specific programs, the foundation­s also raise money for general scholarshi­ps and other needs for low- and moderate-income students.

The secrecy issue doesn't arise as often at private universiti­es because they are exempt from state open government laws and don't have to reveal informatio­n about their donors.

Recently, MacKenzie Scott, an author and the former wife of Amazon billionair­e Jeff Bezos, signed the Giving Pledge to donate the bulk of her fortune. Six historical­ly Black universiti­es received major gifts. The universiti­es – all private – voluntaril­y announced the donations, confirming they have flexibilit­y in how they will use the funds.

Fundraiser­s tend to make an equity argument, saying that if informatio­n becomes public, that can push donors to private institutio­ns where they and their intentions can remain anonymous.

 ?? FRAZIER/JOURNAL & COURIER] [NIKOS ?? “Protect Purdue” stickers are placed near the Gateway to the Future Arch at Purdue University on Aug. 7 in West Lafayette, Ind.
FRAZIER/JOURNAL & COURIER] [NIKOS “Protect Purdue” stickers are placed near the Gateway to the Future Arch at Purdue University on Aug. 7 in West Lafayette, Ind.

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