How Much Control Should Higher Ed Donors Have Over How Schools Spend Their Money?

Let's say you're a wealthy liberal who thinks that every college student should read John Rawls before they graduate. You love the idea of all those impressionable young minds grappling with Rawls' famous "veil of ignorance" thought experiment, which Rawls used to argue for a more just society.

You can't get every college kid to engage Rawls, but you are rich enough to lay out millions of dollars to fund several Rawls programs at universities. And in doing so, you want to make sure these programs do a good job—that the schools hire faculty who truly embrace Rawls' beliefs about fairness, rather than just any philosophy professors. Oh, and you also want these faculty to use a specific Rawls curriculum that you're sure is the best. 

How much should schools let you dictate details like this?  

Some variation of this question comes up all the time, as higher ed institutions deal with donors who often have very strong opinions about how their money is used. And the more granular a donors' preferences get, the more sticky these situations become. 

Schools have rules about this stuff, and while donors are allowed to dictate what area of scholarship their money is used for, they aren't allowed to dictate hiring choices. So, yes, you can fund that Rawls seminar and endowed chair; just don't expect to be sifting through resumes. 

Yet donors push the limits all the time, taking the attitude, Hey, I'm footing the bill here, I should get what I want.

Remember, the kinds of people writing big checks to universities have often been quite successful in business and they're used to setting their own terms.

Joel Trachtenberg, a former president of George Washington University, once described how this kind of thing can go:

I once got a gift from Kuwait, and they wanted to dictate who got the [endowed] chair. And I said, ‘Guys, a gift is a gift. This is not a transaction. If you give me the money I’m going to use it to hire the best person I can. I’ll be happy to give you advance notice and if you really have objections, I’ll take them under consideration. And if I think it is really offensive to Kuwait, I will respect that. But even I am not going to unilaterally hire a faculty member. This is done through a process in which faculty play a big role. And no, you cannot have veto power. Those are the terms.

These tensions came to mind amid the latest revelations about the Charles Koch Foundation's alleged efforts to dictate how its funding for libertarian studies was used at Florida State University in 2007. The Center for Public Integrity has unearthed a batch of previously unpublished emails and memos related to this case. 

Here's how the Center describes the episode, drawing on that new information: 

In 2007, when the Charles Koch Foundation considered giving millions of dollars to Florida State University’s economics department, the offer came with strings attached.

First, the curriculum it funded must align with the libertarian, deregulatory economic philosophy of Charles Koch, the billionaire industrialist and Republican political bankroller.

Second, the Charles Koch Foundation would at least partially control which faculty members Florida State University hired.

And third, Bruce Benson, a prominent libertarian economic theorist and Florida State University economics department chairman, must stay on another three years as department chairman—even though he told his wife he’d step down in 2009 after one three-year term.

The Charles Koch Foundation expressed a willingness to give Florida State an extra $105,000 to keep Benson—a self-described “libertarian anarchist” who asserts that every government function he’s studied “can be, has been, or is being produced better by the private sector”—in place.

“As we all know, there are no free lunches. Everything comes with costs,” Benson at the time wrote to economics department colleagues in an internal memorandum. “They want to expose students to what they believe are vital concepts about the benefits of the market and the dangers of government failure, and they want to support and mentor students who share their views. Therefore, they are trying to convince us to hire faculty who will provide that exposure and mentoring.”

Benson concluded, “If we are not willing to hire such faculty, they are not willing to fund us.”

Now, the only reason anyone is still talking about the FSU case seven years later is because one of the Koch brothers was involved, and there are few more controversial figures in American politics today. 

But putting aside the unusual radioactivity of this donor, you can bet that similar wrangling between universities and donors goes on all the time. And while drawing the line with donors is one thing when it comes to the hiring of faculty—considered a sacrosanct prerogative of academic departments—it's a lot harder to do so in other areas of funding, where hallowed tradition can't be invoked.

More broadly, the fact that donors are able to expand the presence of particular subjects and points of view on a campus is itself plenty disturbing. The Koch Foundation allegedly crossed the line not because it wanted to bolster libertarian studies at FSU, but because it tried to dictate the specifics.

A range of ideological donors have been pumping money into higher ed institutions to fund endowed chairs, programs, and centers for decades with little controversy—when, actually, there should be lots of controversy. Should the academic priorities of universities really be for sale to the highest bidder? 

The tide of private money flowing into higher ed is only going to grow, while government grants are likely to shrink. With more donors throwing around more weight, college and universities need greater clarity over where the line is in allowing those donors to dictate campus activities.

And they need something else: Lots of backbone.