The Fix Was In

April 12, 2010

In a move called "unprecedented" in its state, the University of South Carolina held a competition to design a major new business school building -- and let the donor select the winner, without telling the other firms spending considerable time and money on their proposals that they wouldn't have a shot at winning, The State reported.

The article focused on the ways that the process violated procedures in South Carolina, but the incident may also raise issues about the nature of philanthropy and the decisions that should or should not be made by donors. South Carolina's actions appear to violate standards for gifts by the Council for Advancement and Support of Education.

As outlined in The State, the university was holding a competition for the design of the Moore School of Business, named for Darla Moore. The business school's foundation will give about $4 million to the architecture firm in the project. On April 2, the university canceled all bids and announced that the contract would go to Rafael Vinoly Architects, as selected by Moore. The State quoted a source close to the bidding process as saying that while Rafael Vinoly was a finalist, it was not going to win the competition.

The article quoted both open-government advocates and architecture officials in the state as outraged about this turn of events. Several firms said that they spent at least $100,000 each preparing bids that, as it turned out, never had a chance.

Jim Hodges, president of the business school's private foundation, defended the idea of letting Moore select the architect. "It's pretty straightforward from my standpoint," he told The State. "She gave $60 million for a world-class, iconic building that will bear her name. So we thought her request was pretty modest."

However, the Council for Advancement and Support of Education has guidelines that specifically state that a donor "may not retain any explicit or implicit control over the use of a gift after acceptance by the institution." The guidelines state that donors may suggest uses, but may not be given control over those uses, once a gift has been accepted. As an example of inappropriate "donor control" that would "preclude the counting of a gift," CASE cites a gift for a new art museum contingent on the donor selecting the architect.

Patrick M. Rooney, executive director of the Center on Philanthropy, at Indiana University, said in an interview with Inside Higher Ed that he thought the turn of events at South Carolina was unusual and raised serious questions.

Rooney said that is it quite common for colleges to talk to donors of buildings about their desires, so that someone looking for a traditional design isn't shocked by a cutting edge approach, or vice versa. But he said that letting a donor make the selection in a competition was inappropriate. He compared the situation to an endowed chair. For such a gift, a donor might well pick the discipline and even a specialty, but never the person in the chair.

"There is a line," Rooney said. For most, that line would involve "final programmatic decisions," such as naming an architect or a professor. At that level, the decision should be made by the college or university, not the donor, he said. If donors make such selections, "it's not a gift anymore. It's a contract between the donor and an organization. It loses the nature of being a gift."

And if you are going to let the donor decide, Rooney said, you shouldn't have what appears to be an open competition. "That's just not dealing in good faith," he said. "No one applies for a job if it's a done deal who will get it."

Pablo Eisenberg, a senior fellow at the Georgetown Public Policy Institute and a columnist for The Chronicle of Philanthropy, said he agreed that South Carolina crossed a line with this arrangement. "It's terrible. Everything is for money nowadays," he said.

Eisenberg said there is an important principle involved. When a college selects an architect, it is supposed to gather experts on educational needs, on campus aesthetics, and on other issues. Letting a donor -- even a well-informed donor -- make that decision on the basis of having given money bypasses this process. "You are trying to promote educational excellence in these decisions," he said. Letting the donor decide "goes against the whole notion of excellence."

While donors are increasingly pushing for more input, he said, this was "an extreme."

A spokeswoman for the university said in an e-mail Sunday night that the university's actions were "legal and within the bounds of state law."

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