Quantcast
Home / Biz Blog / ‘Money had to be wooed…’

‘Money had to be wooed…’

Tucker Slosburg

In the late 19th century, donors at the University of California at Berkeley directly interviewed potential professors. Charles Eliot, president at Harvard, encouraged certain laboratories to be built on campus because it would “benefit the company making the donation.” At Cornell, a lumber magnate believed he could make or break presidents and faculty members. Thus, Laurence Veysey, a historian of higher education, concluded that, “Such philanthropists believed they were entitled to spend their money in any way they saw fit.”

Yet the Economist seems “troubled” by Bloomberg Market’s recent report that BB&T Charitable Foundation would only give grants of up to $2 million to institutions that create courses on capitalism and require students to read Ayn Rand’s Atlas Shrugged.

The Bloomberg Markets magazine’s report highlights not just BB&T, but a slew of other schools receiving more than just funds from donors: Robert Burton gave $7 million to UCONN provided he gets a say in the football program; a potential donor to the SUNY system in New York would only give if the state legislature allowed 64 campuses “to set their own tuition for the purpose of reducing their dependence on state aid”; and the donor to the new business college at Drexel University will only fulfill his funding if the school increases its standing in business school rankings.

Regarding the need to increase rankings in the short run, the Economist shows that institutions can easily move up in rankings while still offering a poor education to its students. Here’s the magazine’s four-point guide.

• Only accept the students with the highest GMAT scores, regardless of whether they are sociopaths.

• Recruit some professors with the kind of esoteric research interests that will get them published in rarely-read business journals. Don’t worry if they are useless in the classroom.

• Never accept anyone onto the program who has a decent, well-paying job. She (much better if it is a she) will only muck up your average before-and-after salary comparison.

• And while you’re at it, instruct your careers department that, under no circumstances must students be encouraged to take badly paid, do-gooder jobs, such as working for a charity or a hospital trust. In fact, if possible, ensure they all become bankers.

Further, the Economist claims blurring the line between donations and political agenda’s “shouldn’t be crossed.” It then cites the London School of Economics’ acceptance for funds from the Qaddafi regime. While the Qaddafi reference might exaggerate the majority of current donor practices, it certainly highlights the issue.

Historically, this is all old hat. If a school’s existence was in question, turning down money was often not an option. By the late 19th century, Veysey notes, “The penetration of the university by the business-minded students at the bottom was matched by the influence of philanthropists at the top. Financial support was constantly of the greatest urgency for every academic establishment. Money had to be wooed, and when it was offered it had to be accepted. Rare was the college – such as Swarthmore in 1908 – which turned down a vast gift because it had strings attached.”

Despite the historical role of donors, our gut still says “this isn’t right.” Having a name put on a building is one thing, but demanding curricular or legislative changes smacks of the hubris and self-aggrandizement we hope our institutions of higher learning dispel from its students. Our schools aim to produce morally grounded students, yet we fund them by catering curricula to the wish of donors. It seems irreconcilable. So, why do we still continue to accept these types of practices?

Donors, though, are not singularly at fault. If an institution, like Drexel, spends years wooing a donor, we should be asking if Drexel is morally culpable as well. Certainly they need funds to grow, but at what costs? When institutions aggressively pursue such donors, are we to hold the institution or the donor responsible for blurring lines about ethical giving?

While, the Bloomberg Markets magazine article concludes that the increasing role of private donors is “just the kind of shift away from state control that Rand would applaud,” I, like the Economist, am cautious or at least would like to see future research on the subject. To be sure, history plays a role in favor of the donor, but that doesn’t mean that the traditional relationship is right or proper – on both the donor and the institution side.

The Economist notes that sponsoring a chair or a school shows a company’s interest and commitment to the school. Sure, it makes “business sense” to sponsor. If that’s the case, though, it’s not really for charity, but for marketing. And in that case should we begin to reconsider the tax-deductions? Obviously, doing so creates a disincentive for individuals and businesses to give, but keeping things as they are fosters a false sense of charity.

What is more honest: an open recognition of corporate sponsorship without tax-deduction that might lead to fewer sponsors, or a false sense of charity founded on tax-deduction and the ability to leave one’s name on a building? That is a matter open for discussion. Perhaps a better question is what is more beneficial towards the community and which is more moral?

You can reach Tucker at tslosburg@gmail.com or follow him on twitter @Tucker849.

About Tucker Slosburg