A New Challenge to Koch Gifts on Campus Raises Larger Issues About Transparency

George Mason University. Photo:  John M. Chase/shutterstock — George Mason University. Photo: John M. Chase/shutterstock

Private citizens and foundations donate to universities all the time. It’s not unusual for donors to attach strings to those funds. Maybe the money funds a specific school within a university, or endows a professorship. But finding where the line is drawn can be tricky, and donors and administrators alike can get into trouble when gifts seem to grant undue influence to those writing the checks. Often, though, it's hard to know the exact terms of major campus gifts since the agreements between universities and donors are rarely made public.

Students at George Mason University are challenging that lack of transparency by taking their school to court to access its agreements with the Charles Koch Foundation. Students claim they have a right to know any promises their public university made in exchange for extensive donations from the foundation over the years.

In a show of solidarity, students at seven universities across the country filed Freedom of Information Act requests for agreements their schools struck with private donors.

The Charles Koch Foundation is one of several Koch family philanthropic entities and tends to focus its giving on colleges and universities. In fact, the foundation has become one of the largest and most active grantmakers in the higher ed space. Funds typically support campus programs that advance the Kochs’ free-market libertarian philosophy.

The foundation donates to a huge number of higher education institutions—319, to be exact. On the most recent tax returns available, the foundation reported $50.5 million in annual charitable disbursements, many of which went to colleges. Gifts ranged from a couple thousand to millions of dollars.

The total amount donated has been on the rise over the past few years, too. Back in 2012, the foundation gave $15 million. That amount increased to $44 million in 2015, and went up again last year. Charles Koch said the donations he’s given for ideas and policy work have been far more effective than his political contributions. Koch, now 81, also said he plans to increase his giving, so we can expect those numbers to rise.

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While Charles Koch's giving is notable for its scale, there's a long history of campus giving for ideas and policy research from donors with a strong normative agenda on both the right and the left. In past years, the Olin Foundation, which closed its doors in 2005, was long the top conservative donor to higher ed, investing for decades in professorships, research centers and student leadership activities. The Bradley Foundation is another key player in this space and remains very active. Major progressive campus funders included the Russell Sage Foundation and the Ford Foundation. More recently, George Soros's Institute for New Economic Thinking has been investing in progressive economic research. The Washington Center for Equitable Growth is another new player that makes grants to academics exploring topics related to inequality, as we've reported.

But Koch campus donations have sparked particular alarm, given the family's high profile as major GOP power players. Pushback to this giving is part of a broader effort by progressives to sound the alarm about Koch influence. The target of the new lawsuit, George Mason, is the largest beneficiary of the foundation’s higher education funding. Richard Fink, the director and former president of the foundation, taught economics at GMU. The Charles Koch Foundation reported giving the university’s George Mason Foundation $13.2 million back in 2015. Now, students are demanding to know what, exactly, was promised in exchange for the Kochs’ generosity.

Angel Cabrera, GMU’s president, said donors understood they couldn’t influence the university. “If they ever threatened our academic freedom, we wouldn't take their money,” he said during a Reddit Ask Me Anything.

In a statement to Inside Philanthropy, John Hardin, the foundation’s director of university relations, stressed universities’ “independence to define their vision and to fulfill it.”

However, the students’ suspicions are not entirely unfounded. Several years ago, the foundation’s negotiations with Florida State University over a million-dollar gift came to light. In exchange for the funds, the foundation wanted curriculum to align with Charles Koch’s libertarian, free-market economic philosophy, partial control over faculty hiring, and for the economics department chairman to stay on for three more years, as reported by the Center for Public Integrity.

Students behind the GMU lawsuit believe the university's status as a public institution entitles them to transparency regarding donor agreements. "The Virginia law does not allow GMU to hide its financial records by outsourcing them to a private entity like the GMU Foundation,” said Gus Thomson, a student plaintiff in the case.

If the students are successful, it could set a precedent that would affect how much privacy exists between campus donors and their recipients. Maybe that wouldn’t be a bad thing. While the Koch brothers may currently be a lightening rod because of their political dealings, there are good reasons to take a closer look at more such donations to schools and the expectations attached to gifts.