December 3, 2023

Economix: Buying Influence at Universities

Over the years there have been concerns about donors’ subtle influence at universities. Professors might be reluctant to research gas taxes, for example, if the building they work in is named after Chevron.

As schools become more desperate for money, though, donors are finding opportunities to become more directly influential.

The St. Petersburg Times reported on Tuesday that Charles G. Koch, one of the billionaire brothers at Koch Industries, has pledged $1.5 million to Florida State University to be used for hiring in the economics department. In exchange, his representatives get to “screen and sign off on” the hires.

Another philanthropist is using donations to shape classroom curricula. Bloomberg reported that John Allison, the former chairman of the banking company BBT, is working through the company’s foundation to give schools grants up to $2 million. The condition is that they must agree to create a course on capitalism that has “Atlas Shrugged” on the reading list.

The article reports that 60 schools, including at least four campus of the University of North Carolina, have begun teaching the book as a result of accepting the foundation money.

Are the strings attached to these gifts too stringent?

One could argue that such conditions compromise academic freedom, and allow the education of today’s impressionable youth to be dictated by the highest bidder. But colleges are not required to accept these gifts. If they found the conditions truly objectionable — or at least if their objections outweighed the additional good the money could do — they could always graciously decline the money.

As an aside, donors frequently complain that the balance of power usually tilts too far in the opposite direction: that donors usually have too little say in determining how their money gets spent, whether at educational institutions or other nonprofits.

There was the Robertson case at Princeton, for example, in which the heirs to the A.P. grocery fortune argued that Princeton was not adequately using their family’s gift to promote public service, as it had been intended. More recently, in January, the University of Connecticut made headlines after a donor asked for his $7 million gift back because the school had not included him in its search for a new football coach.

What do you think?

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