One by one Thursday morning, a panel of lawyers, philanthropy experts and angry college alumni (some wearing multiple hats) recounted details of myriad legal battles involving institutions – Princeton University, Tulane University, Randolph College – and the miffed donors whom they represent.
The speakers' stories turned into messages of warning. In their estimation, it's a tough time to be a donor. Too many colleges violate the trust of philanthropists by redirecting gifts intended for a specific purpose without giving adequate notice. And with colleges receiving $28 billion in charitable gifts in 2006, the stakes are higher than ever.
This commentary about the state of higher education philanthropy found a mostly sympathetic audience gathered for a conference sponsored by the Center for Excellence in Higher Education, a new nonprofit group that wants to represent the interest of donors ready to make major gifts.
But is the wary philanthropist a common character? Sure there are high-profile cases of donor-college relationships gone bad, but what about the rest of the landscape? Not surprisingly, there is disagreement.
"We're hearing the exceptions to the rule today," said Paulette Maehara, president and chief executive of the Association of Fundraising Professionals and a conference panelist.
"It's a far more common problem than people think," argued Lynne Munson, an adjunct research fellow at the Center for College Affordability and Productivity. "People are often unhappy with the use of their gift, but not all donors consider legal action." (They might not have the means or the will to sue, she explained.)
To that end, several panelists urged donors to pay close attention to how their gifts are structured. Laws on donor rights are in flux, argued William Josephson, former assistant attorney general-in-charge of the New York State Law Department's Charities Bureau, and those giving to colleges can't always depend on state courts to sort things out.
Ron Malone, the lead plaintiff attorney in Robertson v. Princeton, a case involving Princeton's Woodrow Wilson School of Public and International Affairs, said it's important for donors to consider whether they will have the legal standing to enforce how a gift is used, and whether the recipient college has mechanisms in place to report on how money is being spent.
More donors are demanding that kind of information and wanting to know what's happening along the way with their gifts, said Anne Yastremski, an alumna of Randolph-Macon Woman’s College (now the coed Randolph College) and executive director of Preserve Educational Choice, the alumna/student/donor organization supporting litigation against the college over its decision to admit men and to sell off part of its art collection.
But Malone said donors who have specific ideas in mind for their gifts often fail to clearly articulate them when talks with colleges take place and papers are being signed.
"It's during that period of euphoria over the gift-giving process when donors need protection," Malone said. "Once that check clears, attitudes can change. [Those who handle the money at colleges] aren't bad people; they are just asking the wrong questions," he added. "They’re saying, ‘What’s the best way to spend the money,’ rather than, ‘What covenant do we have with our donors. What did we agree to do with their money?'”
Craig Lerner, a law professor at George Mason University, said donors shouldn't be surprised years later if a gift made with only general terms isn't supporting something they approve of down the line, particularly if they are giving to sources they don't know well. Instead, he said philanthropists should consider finding someone or something they truly believe in, limit a gift to five or 10 years and have enough trust so that strings don't need to be attached.
Added Ruff Fant, who identified himself as a donor to Vanderbilt University: "The tendency toward highly targeted gifts isn't good for higher education."
Frederic J. Fransen, executive director of the Center for Excellence, said the group has commonly heard from donors who have been troubled by circumstances surrounding their first donation and want help getting through the process the second time -- often still wanting to give to the same institution.
“We’ve been accused of coming to existence to help donors put strings on gifts,” Fransen said. “Our longterm goal isn’t to get involved in transaction matters. It’s to get donors to be satisfied with gifts the first time around.”
For that to happen, it's important for college officials to stay in constant communication with those giving to the institutions, said Maehara, president of the Association of Fundraising Professionals.
Her group has guidelines saying that colleges should ensure gifts are used as specified by donors, and institutions should get "explicit consent" from a donor -- including a meeting -- before altering conditions of a gift. In the event that there's no mutually satisfactory way money can continue to be spent, the guideline says, the college should return the donation. (Maehara said she's rarely seen that happen.)
“Most donors, when you ask them about changing conditions of a gift, they're willing to talk," said Maehara, who was formerly a fund raiser at the University of Hawaii. "I've never had a donor say no."
Added Fant: "Lots of gifts are given with no problem. I donate, and I trust the people here. They know more about the university than I do, and I let the experts and people who make every-day decisions take care of it."
John Lippincott, the president of the Council for Advancement and Support of Education, the association that represents fund raisers in academe, said in an interview earlier this fall that the majority of donors trust colleges.
“The fact that giving to American higher education has been doubling every decade is a sign of professional and solid relations between donors and universities,” he said. “There’s an enormous track record of success. Have there been a few high-profile instances of disputes? Yes. Are they in any way indicative of a widespread problem? I see absolutely no evidence of that.”
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