Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

March 3, 2008

Restricted giving creates opportunity to engage

Battle lines are being drawn at a growing number U.S. colleges and universities over gifts to which donors want to attach strings.

On one side are donors who want to support specific academic endeavors and make sure the schools honor the intent of the gifts and use them effectively.

On the other side are faculty who claim gifts restricted to supporting the teaching of a particular subject, course or book threaten academic freedom.

Caught in the middle are fundraising professionals whose challenge is to match the needs and interests of their institutions and donors.

And while this philanthropic battle is playing out on higher-education campuses, often inflamed by culture wars and political correctness, it underscores a continuing struggle at all nonprofits to engage donors.

In the latest skirmish, reported by Inside Higher Ed, professors at Marshall University in West Virginia say the school took an ethical misstep in accepting a $1 million gift from the BB&T Foundation to its business school requiring it teach libertarian writer Ayn Rand’s novel Atlas Shrugged.

And two years ago, Inside Higher Ed says, faculty at Meredith College in Raleigh, N.C., voted down a $500,000 gift from the BB&T Foundation that would have required the teaching of Atlas Shrugged.

As The Wall Street Journal reported last year, disputes over restricted gifts and donor intent had prompted a handful of conservative foundations to form the Center for Excellence in Higher Education.

Among its services, the Center says, it aims to “help serious donors and prospective donors structure gifts to achieve specific goals and obtain the best possible outcomes for their higher education investments.”

Because some funders abuse the power their wealth gives them, and because many nonprofits defer to that wealth and power, charitable giving does not always match charitable need.

In their continual chase for funds, rather than asking for the dollars they truly need, too many nonprofits instead design new initiatives that pander to donors’ giving priorities.

And in their continual pursuit of a legacy, rather than trying to understand the dollars nonprofits actually need, too many funders instead serve as enablers, using their dollars to lure nonprofits into designing new programs that stray from their core mission or program priorities.

The reality is that in a fiercely competitive and poorly regulated charitable marketplace, funders can do pretty much what they like, and nonprofits are free to play by individual funders’ rules or look for other sources of support.

Still, charitable organizations can take steps to better engage donors and ensure the ethical and effective use of their philanthropic investment.

On college campuses, that job can be particularly tough because some faculty members can be quick to cry wolf at the slightest whiff of a donor who fails to pass their test for political correctness.

But colleges and universities ultimately are free to accept or reject restricted gifts, whether for a new classroom building or sports arena, a curricular program or the teaching of a specific book, regardless of its focus or philosophy.

That is called academic freedom.

And critical to academic freedom, whether faculty even recognize or will acknowledge it, is the generosity of donors who are free to give or not give, and to restrict or not restrict their giving.

If faculty want their schools to reject restricted gifts from donors who may not share their social or political philosophy, that is their right, but they should be honest about it and not masquerade as defenders of academic freedom when their true role is to reduce the marketplace of ideas to a closed shop.

Regardless of the campus food fights that intolerant faculty members may wage, or in fact precisely because of those fights, it remains critical for colleges and universities, as it does for nonprofits, to set clear policies that spell out the basis on which they will accept or reject gifts.

The abiding challenge for fundraising professionals, on and off campus, is to find ways to engage donors, educate them about the needs of their organizations, and help develop charitable giving that advances the needs and interests of the organization and those who support it.

The survival of nonprofits, and their effectiveness in addressing the needs of their constituents, including donors, depend on clarity, fairness and openness in engaging and serving those constituents.


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