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Philanthropic Donations: A First-Hand View of a Controversy

Risk Management and Compliance

Philanthropic Donations: A First-Hand View of a Controversy

Philanthropic Donations

Last spring, George Mason University, a public research institution in Virginia, experienced a controversy around gift agreements that accompanied prior philanthropic donations. In addition to a lawsuit filed by a student group against the George Mason University Foundation, President Angel Cabrera released a number of gift agreements that contained clauses giving donors potential input on faculty hiring and evaluation of faculty activity.

As chair of George Mason’s Faculty Senate, I am responsible for representing the faculty perspective to university administration and our governing board of visitors—so I was smack in the middle of this controversy. This experience provided a broad education into the intricacies of academic freedom and donor rights and led to the creation of potential solutions that could benefit other institutions.

New realities
The mission of public institutions of higher education is to provide access to college-level education for all. Furthermore, research universities—most of which are public institutions—are also expected to generate and disseminate novel knowledge through research and scholarship of their faculty (and students).

To facilitate excellent education and research, the free pursuit of knowledge is essential. If researchers or educators are influenced by political or institutional pressures, the public’s confidence in the objectivity of their teaching and findings is undermined. So, faculty and students at public research institutions must operate with academic freedom: the ability to search for knowledge and truth without constraints from political or administrative pressures.

The importance of academic freedom is endorsed by a wide range of professional organizations focused on higher education. For instance, the American Association of University Professor’s original 1940 Statement of Principles on Academic Freedom and Tenure has been endorsed by more than 250 organizations. More recently, 26 higher education professional organizations (including the American Association of University Professors, the Association of Governing Boards, the American Council of Education, and the Association of American Colleges and Universities) all endorsed a joint statement on the essential nature of academic freedom.

All of this means that support for academic institutions and their faculty and students must not have any conditions or constraints. Historically, the bulk of funding for public colleges and universities has come from state legislatures—so when concerns about academic freedom were raised, they were usually focused on state laws.

However, public funding for higher education in terms of dollars per student has decreased dramatically over the past several decades, which has resulted in a need for public institutions to generate revenue in other ways. One common response to the public disinvestment in higher education has been to raise tuition. This move shifts the economic burden of education from the state to the family, meaning that families with less means will have less access to a college education—a situation that flies in the face of the entire point of public higher education.

To minimize the burden on families, institutions have turned to philanthropy to try to address the shortfall in funding support. In many cases, donors have stepped up to the plate, offering strong support for a variety of initiatives at colleges and universities across the country. It is wonderful to see people, foundations, and corporations with means come forward support the mission of our institutions of higher education. However, this shift also raises questions about how to balance principles of donor involvement and stewardship with academic freedom.

Donor engagement, or active involvement of donors, is a key element of strong philanthropy. In a 2003 report on donor education sponsored by New Visions Philanthropic Research and Development, Dan Siegel and Jenny Yancey observed that donors in the United States were “seeking greater control over and involvement in their philanthropic contributions.” A donor’s desire to become involved in the operations of colleges and universities directly conflicts with the idea of academic freedom. For a public institution, this conflict is even more stark, as the institutions are funded by taxpayer money and, thus, accountable to a broader constituency than even those who attend or work at the institution.

Lessons learned

When this conflict hit George Mason last year, how did the university respond? First, we took quick steps to create a “gift review committee” to review existing gift agreements, and broader gift acceptance policies and practices. The committee included faculty members students, administrators, and members of our governing board of visitors, together with an independent, third-party entity. Bringing together such a diverse group was challenging, but it served two major purposes. It led to rich discussions of complicated issues that generated strong recommendations for the future. Moreover, it allowed for true “shared governance,” with faculty, administrators, and members of the governing board working together to arrive at a consensus about how to move forward.

Second, despite the diverse perspectives among these individuals, there were areas of obvious agreement. In particular, everyone agreed that academic freedom—the ability to search for knowledge and truth without constraints from political or administrative pressures—is of paramount importance in higher education. Yet, everyone also agreed that, because of the steadily decreasing investment from state and federal levels in education, philanthropy is also of incredible importance to the future of our university. With an increasing reliance on philanthropy, we must be aware of and protect the rights of donors.

Finally, the hard work of this committee led to some concrete recommendations that I think all institutions of higher education can take to protect both academic freedom and donor rights:

    1. Make all provisions and conditions of gifts publicly accessible. Information about donor identity and the nature of the gift can remain protected, if the donor wishes. However, anything that constrains the use of funds by the university must be public. This makes any impact that the gift has on academic freedom, academic integrity, and the overall mission of the institution open and transparent.
    2. Protect against “side agreements.” Any and all provisions of a gift agreement must be public—donors cannot have secret “side agreements” that commit the university to any activity.
    3. Develop a policy to require disclosures of funding for publications or presentations of research or scholarship that were supported by a gift. These types of disclosures are required when research is funded by the federal government or a corporation. Philanthropic donations should be no different. Ideally, disclosures would be traceable to the publicly available conditions of the gift agreement, as described in recommendation number 1.
    4. Construct a strong Gift Acceptance Committee. It is impossible to foresee all elements of an agreement that might be problematic—and what is viewed as acceptable today might be seen as problematic years from now. Thus, there must be a way to review agreements that have certain types of provisions to evaluate whether those provision are acceptable. Such a committee should have faculty and administrators from across the institution who are fair and even-handed, and who receive basic training in gift agreement policies and the university mission.
    5. Develop methods for evaluating the expenditures of money from gifts. Once conditions of a gift are public, there must also be a way to make sure that the spending of that money aligns with any provisions of the gift agreement, and the academic mission of the institution.

It would be great if there were a simple, straightforward solution to these conflicting pressures, but like many things, the issues surrounding philanthropy and higher ed—particularly public higher ed—are complex. The solutions are going to require careful thought and creativity. These recommendations will not solve every problem that might arise in the future. Most notably, they do not address whether or how to evaluate donor intent (which is incredibly complicated) or the potential for philanthropy to shift the focus of faculty scholarship in the direction of issues that well-funded individuals and groups care about most.

They do, however, offer a set of strong steps that public institutions of higher education can take to begin balancing the essential protection of academic freedom and integrity, the increasing need for philanthropy to support the mission of higher education, and the associated rights of donors who contribute toward that mission. That’s a start.

Keith D. Renshaw, PhD, is an associate professor of psychology at George Mason University. Dr. Renshaw has served on the Faculty Senate of George Mason since 2013, and he has been in the role of faculty senate chair since Spring 2016. In addition, he has been department chair since summer 2017. In this role, he oversees a department of more than 40 faculty, 200 graduate students spread across four MA and five PhD programs, and 1,300 undergraduate students.


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