When the
Price Is
Too High
Colleges need funds,
but they fear selling out
When Duke graduate and trustee
Disque Deane pledged $20 million
to his alma mater last December, it
seemed like a fund raiser's dream come
true. The biggest gift since James B. Duke
endowed the university in 1924, Deane's
contribution would revitalize Duke's
$200 million capital campaign. But alas,
there was a catch: terms of the gift mandat-
ed that an executive committee dominated
by Deane associates could veto the hiring of
any professors who would be paid with
Deane's money. Faculty and administra-
tors, contending that the deal would be an
assault on academic freedom, soon de-
clared the dream gift unacceptable in the
announced form. "We could surely use the
money. And one can always argue that a
given process would not be abused," says
Philip Stewart, professor of romance lan-
guages and chairman of Duke's faculty
council. "But you have to avoid any possi-
bility that it might be."
As stiff-necked as such a stand might
seem, many schools face similar difficult
choices. To cope with rising costs and to
take up the slack for declining, or at least
slowing, federal assistance in such areas as
student aid and research grants, universi-
ties find themselves increasingly depend-
ent on both individual and corporate phi-
lanthropy. This applies not just to private
institutions but also to public ones as state
governments trim back their levels of sup-
port. The State of Michigan's contribution
to the budget of the University of Michi-
gan, for example, fell from nearly 61 per-
cent in 1975 to under 54 percent a decade
' later, thus increasing Ann Arbor's need for
outside funding. Should too many donors
decide to attach strings, the situation will
grow trickier still. "Universities are more
and more anxious to raise funds, so they're
more open to making concessions," says
William Schneider, president of the North
Carolina conference of the American Asso-
ciation of University Professors.
Fund raisers have long accepted that a
quid often has some kind of pro quo, so
ILLUSTRATION BY JOHN BREAKEY
Quid pro quo philanthropy: Sometimes it's hard to look a fat cat in the mouth
they see little problem in, say, naming a
building after its principal donor. But re-
strictions appear to be on the rise. In the
last academic year, according to the Coun-
cil for Financial Aid to Education, dona-
tions limited to specific purposes grew six
times faster than unrestricted contribu-
tions and now make up more than 90 per-
cent of all private giving to higher educa-
tion. "They're not just giving it for their
health or to burnish their reputation for
social responsibility or to be good guys,"
CFAE vice president Paul R. Miller warns
of many donors. "They're giving it for
what they consider to be sound business
reasons."
Sophisticated fund raising: And schools
mean to take it. Hundreds of colleges are
currently embarked on fund-raising cam-
paigns with a combined goal of nearly $18
billion. A public university, Michigan, for
instance, is seeking $160 million; one pri-
vate giant, Columbia, is wrapping up a
$500 million campaign and another, Stan-
ford, is embarked on a $1.1 billion drive.
Since last year's tax-reform law may
make charitable giving less valuable fi-
nancially to most donors, colleges and uni-
versities have become more sophisticated
and aggressive in their fund raising. But
the university advancement and develop-
ment officers contend that very little of
the money comes with conditions consid-
ered untenable. In fact, donors will often
compromise, they say, when the institu-
tion explains its position.
The line of acceptability is sometimes
fuzzy. "If they say, 'I'll give you a bunch of
dough if you get rid of that commie profes-
sor in the sociology department,' I think
most schools would stand up strongly on
that," CFAE's Miller observes. "Where it
happens, it's usually blurred, sort of an
uneasy situation." At the University of
Georgia, which last year chalked up $36
million in private contributions, major-
gifts director William Messina estimates
that 95 percent of all private giving comes
with some sort of proviso, but very little
threatens the school's academic integrity.
A $100,000 gift from a farmer earmarked
for soybean research would be acceptable,
NEWSWEEK ON CAMPUS 19
NOVEMBER 1987