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Donations Come with Strings Attached
Philanthropists are attaching more conditions to their gifts, according to the Chronicle of Philanthropy, and donors are more likely to ask beneficiaries to sign contracts spelling out exactly how the gifts will be used and penalties that will apply if the terms are not met. Gifts with conditions are not a new phenomenon. As the Chronicle points out, donors such as Andrew Carnegie attached specific restrictions to their gifts a century ago. But the practice of restricting gifts is becoming more common, according to the newspaper, which attributes the increase to various causes: an emphasis among donors on targeting their gifts to achieve specific goals; the presence of young "dot.com" philanthropists who are eager to apply the techniques of venture capitalism to their philanthropic efforts; a proliferation of financial and legal specialists providing advice to philanthropists; and a heightened interest in accountability.
In the last decade, several conditional gifts generated considerable public debate. In 1992 industrialist Henry Rowan pledged $100 million to Glassboro State College in New Jersey on the condition that the institution build an engineering school and give free tuition to the children of employees at Rowan’s company, Inductotherm Industries. (The college subsequently changed its name to Rowan University, which was not a condition of the gift.) In 1994 financier Ken Lipper offered Harvard University $3.2 million to establish a chair in Holocaust studies, triggering a debate over whether donors should be allowed to shape an institution’s academic offerings. Harvard accepted the offer and appointed a search committee, but the plan was abandoned and much of the money transferred to Harvard Medical School when the committee was unable to agree on a candidate to fill the Holocaust chair. In 1995 Yale University returned a $20 million gift from oil magnate Lee Bass that had been earmarked for a program in Western civilization, because Bass wanted to approve faculty appointments to the program. In 1997 Yale rejected a $5 million gift from gay rights activist Larry Kramer when he stipulated that the gift be used to create a full-time professorship in the field of gay studies. In each case, students, faculty, and alumni disagreed on whether the conditions were appropriate.
Many philanthropists donate money specifically for buildings or endowed professorships that bear their names. Such donations often occur without controversy. In other cases, institutions approach donors for funds to fulfill certain needs. Controversy seems to arise most often when the donor’s ideas for specific initiatives do not accord with a university’s priorities.
At the University of North Dakota, some faculty members and students protested the 2001 opening of a $100 million athletics arena funded by wealthy alumnus Ralph Engelstad. They objected to Engelstad’s stipulation that the university retain the controversial Fighting Sioux name for its sports teams as a condition of his gift, and they argued that the large expenditure on the arena seemed out of proportion at an institution that, as one protester told the Chicago Tribune, "could use more books."
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