Universities Grapple with Donor Behavior
Universities Grapple with Donor Behavior

Universities Grapple with Donor Behavior

The Jeffrey Epstein scandal has focused attention on funding of higher education institutions by patrons with disgraceful behavior.

Sep 4, 2019
David Adam

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Pecunia non olet—money does not stink—is a phrase attributed to the first century Roman emperor Vespasian, who used it to defend his controversial tax on purchasing urine, used for various industries at the time. The value of cash, he meant, is not tainted by its origins. But as the scandal surrounding donations to academics and research institutions from the convicted sex offender Jeffrey Epstein has revealed in recent weeks, that’s not always true.

Almost a month after the jail suicide of the disgraced billionaire financier, the fallout continues for those who had accepted his gifts, especially when they were given after Epstein served time for soliciting sex from a minor in 2008. MIT, for instance, has pledged to hand over the $800,000 it received from Epstein to charity, while two of its academics have resigned in protest of their boss’ relationship with the donor. Harvard University, on the other hand, has so far resisted calls to redirect the $6.5 million or so it received.

The Epstein case is the latest controversy to shine a light on the way that universities solicit and accept money from wealthy individuals, foundations, and companies. Many institutions across the world have found themselves in the firing line over their own links to other controversial individuals or corporations. So, how do they decide whose money to accept and when to reject or return funds? And are they more conscientious now than in the past?

“There definitely has been and will continue to be among senior managers and boards more awareness of these issues,” says Morgan Clevenger, a postdoc studying corporate social responsibility and global business ethics at the Monarch Business School in Switzerland.

That would be a perfect case where you just give the money back. It’s dirty money. It’s bad money. He’s a bad person.

—Thomas Cushman, Wellesley College

Universities typically wrestled in the past with the practical problems of large donations, he says, such as how to pay for renovations and repairs to buildings named after (and paid for by) prominent individuals after the initial donation had run out. But attention is increasingly turning to the profile and behaviors of donors themselves, and institutions are updating their policies and practices to reflect that. After criticism about wealthy donors influencing its hiring and firing of academic staff, for example, George Mason University tightened its rules in April to make arrangements with donors more transparent.

The rights and wrongs of accepting gifts is a particularly acute issue for universities in the United States, Clevenger says, where the culture of philanthropic giving is most established. And the same concerns arise whether the money comes from individuals, corporations, or charitable foundations. “Even when an individual makes a gift, that’s quasi-corporate because they usually earned that money in the corporate world,” he explains. And that means institutions must consider an individual’s motives and background as carefully as a company’s image and behavior.

Typical policies for accepting donations

Adam Causgrove, who works in corporate relations at Carnegie Mellon University, says universities discuss internally the possible pitfalls of associating with a specific brand or individual before accepting money. “For better or worse, nothing is truly philanthropic,” he says. “It’s very rare that someone would give a meaningful donation and not want their name attached to it.”

That can create a particular problem in the life sciences and medical research, he says, where strict government rules to protect patients from undue commercial interests mean even the smallest transactions must be registered. “We would be hesitant to name the school of medicine after a pharmaceutical company,” he says. “We have to be mindful of how it looks.”

Take, for instance, members of the Sackler family, who critics say made their fortune off the opioid crisis as the owners of Purdue Pharma, the maker of the painkiller OxyContin. Members of the family are big donors to academic biomedical research, and their name is on buildings at Tel Aviv University and Tufts University. Now, those schools are facing calls to return money donated to them by a trust run by the Sackler family.

In an attempt to introduce and harmonize standards across academia, industry groups have produced guidelines on determining whether or not to accept money.

Universities take the same steps and ask the same questions whether an offered donation is intended for the institution or to support the work of a specific department or even an individual researcher, Causgrove says. And they pay extra attention to new donors. “We have to do our homework and due diligence.”

The exact process used to consider proposed donations, and the standards applied, varies from institution to institution. Some larger universities, including the University of Edinburgh in the UK, have dedicated advisory groups. Smaller institutions might bring in external consultants to help them decide, Clevenger adds.

In an attempt to introduce and harmonize standards across academia, industry groups have produced guidelines on determining whether or not to accept money. The Council for Advancement and Support of Education, for instance, offers a list of 10 principles aimed at British universities.

These include taking “reasonable steps to ensure that they are aware of the source of funding for each gift, and have processes in place to satisfy themselves that the funds do not derive from activity that was or is illegal, or runs counter to the core values of impartial, independent research, scholarship and teaching,” and considering “the reputational risks that could be incurred through public perception of any particular donor.” On possible unethical or criminal activity of donors, university officials must draw a clear distinction “between rumour or speculation and matters of confirmed fact or legal finding.”

It’s hard to track how many universities have prepared their own such policies, Clevenger says, but many now do include them on their websites, or publish details in annual reports.

Dirty versus distasteful

Not everyone believes that formal written policies are the way to go. Thomas Cushman, a sociologist at Wellesley College who has previously drawn criticism for using an institutional donation from the Charles Koch Foundation to run a project that brought conservative and controversial speakers to campus, says it’s rare for ethical debate over donors to be as clear-cut as the Epstein case. “That would be a perfect case where you just give the money back. It’s dirty money. It’s bad money. He’s a bad person,” he says. “It gets a lot more difficult when you talk about philanthropy in general.” (When asked for comment, MIT referred The Scientist to an August 22 letter to the community from President L. Rafael Reif in which he says: “To my great regret, despite following the processes that have served MIT well for many years, in this instance we made a mistake of judgment.”)

Critics of Charles Koch argue his donations are intended to promote his conservative political views. But written policies that try to judge actions and behaviors as ethical or not will always be subjective, Cushman says, and risk turning the process of vetting donors into a political litmus test. “If you look at any university or college you can find donors who possibly made their money in ways that were distasteful to a lot of people. But that alone cannot be a criterion for exclusion because it makes it all political.”

And political activism doesn’t necessarily mean a donor’s grant aims to pursue that same agenda, says Cushman. David Koch, Charles’s brother, gave large amounts of money to MIT, he points out. “Not to promote libertarian causes. He gave it to cure cancer and to foster science and engineering.” 

There are, however, cases when donors clearly aim to push their own agenda and influence the way to money is used. Just last week, George Mason University found itself in yet another controversy when the Associated Press reported that the school had received a $50 million donation earlier in the year specifically to promote conservative policies.

Nathan Oseroff-Spicer, a philosophy of science researcher at King’s College London, says funding from prominent individuals and companies for the top research universities can be problematic, even if there are no strings attached or explicit ethical concerns. That’s because it influences how outsiders view the research produced.

“They may disregard studies that are actually quite good because they’ll see it’s coming from an interested party who’s supplying the funding,” Oseroff-Spicer says. “The only way things are going to change is if we actually talk about these issues collectively as a society and figure out if we need to change how funding is allocated.” Because the university system encourages top research institutions to compete with each other for funding and prestige, he says, “I don’t know if any one university can put in policies that would prevent issues such as receiving funding from the tobacco industry, the pharmaceutical industries, the Koch brothers who have certain economic interests in mind, or individuals like Epstein.” 

Correction (September 10): Cushman did not directly receive funding from the Koch Foundation as we originally wrote. Rather, the money was an institutional donation to Wellesley that was used for a project he directed. The Scientist regrets the error.