How Much for a Name?

Controversies at NYU and Paul Smith's College point to the potential downsides of agreeing to change a name for a large gift.

October 27, 2015

When donors give $100 million to an institution, many expect gratitude, not criticism. But a recent nine-figure donation to New York University’s engineering school garnered the latter after many students and alumni balked at the name change that came along with the gift.

The controversy comes soon after a judge blocked Paul Smith's College from changing its name for a donation. While that case had some unique legal features, both controversies illustrate that changing a name may not always be simple.

After the NYU engineering school posted news of the gift and name change on Facebook, the post was flooded with dozens of comments deriding the renaming. And nearly 1,300 students, alumni and other supporters have signed a petition against changing the school’s name from the NYU Polytechnic School of Engineering to the NYU Tandon School of Engineering, in honor of donors Chandrika and Ranjan Tandon.

Many opponents say they’re thankful for the gift but believe the name change damages the engineering school’s brand. “No donation, no matter how significant, should allow for 161 years of heritage and educational excellence to be erased overnight,” the petition reads.

The engineering school, in its current form, is the result of a 2014 merger, and in the last decade has experienced several name changes, being called at times the Polytechnic Institute of NYU, the Polytechnic University and the Polytechnic Institute of New York. This is the first name change to drop the “polytechnic” part of the name, and for many alumni and students, some of whom were not happy about becoming part of NYU, it’s one name change too many.

“‘Polytechnic’ is the only name that survived through all of these name changes,” said Henry Bertoni, a former faculty member at the engineering school who now serves on the alumni association’s executive council. “There's an emotional reaction by some of the alumni to the name change.”

Since the gift was announced two weeks ago, NYU has held two forums to try to build support for the name change, one for alumni and another for students. Bertoni, who is supportive of the donation, says many alumni are still wrestling with the name change. That’s something officials at NYU anticipated, in part because the 2014 merger was somewhat controversial and also because other name changes at the university have also netted initial concern among alumni.

“Any time you change a name of the school … you have to expect some pushback from alumni and students because that’s the name they associate their education with, so it holds a piece of their heart and their loyalty,” said Debra LaMorte, NYU’s vice president for development. LaMorte said previous name changes due to philanthropy at NYU’s social work and education schools also elicited some criticism at the time.

Though LaMorte said she was anticipating some pushback about the name change, she didn’t discuss the possibility with the donors -- wanting instead to keep conversations around the gift positive.

“When you are talking about gifts of this magnitude with the donor, it's all about the enthusiasm and the opportunity and the excitement of what can be done at the institution with a gift of this size,” she said, adding that she’s since assured the donors that criticism is coming from what she believes is a minority of alumni and students. “These initial feelings and responses from current students and alumni die down pretty quickly and [will not] be a reason for great concern.”

She said the engineering school is brainstorming ways it can pay heritage to its old name, such as creating a “polytechnic” alumni lounge or series of professorships.

Robert Sevier, senior vice president for strategy at Stamats, a higher education marketing firm, said it’s not unusual for there to be pushback against renaming a school or building after a donor.

“Any name has laundry attached to it, good laundry and bad laundry. It's just really hard to manage. You have people who like the old name, and then you have people who are going to find fault with the new name,” he said. “It's never about ‘We need to refuse the money.’ It’s that ‘We need to refuse the strings attached with the money.’”

Alumni at Paul Smith's College have successfully rallied against an attempt to change the college's name to honor a potential donor. A judge earlier this month ruled against the college's proposed name change, saying it violated the original gift agreement that created the New York college in the 1940s. The college has chosen not to appeal the decision, and the donors have since dropped the gift. The new name would have been Joan Weill-Paul Smith’s College, in honor of philanthropists Joan and Sanford Weill, who were prepared to pledge $20 million to the college.

“If it is truly a gift out of the kindness of her heart and love for PSC and the Adirondacks, there would not be contingencies like this,” one opponent of the name change wrote on the college's Facebook page. “Let's not be greedy, PSC, and sell our school to the highest bidder.”

That original gift agreement -- which stated that the college would be “forever known” by Paul Smith's name -- could only have been broken if the judge concluded there was no other way to improve the college's financial health than accepting the $20 million donation, which was originally contingent on the proposed name change. But the judge ruled that the college didn't demonstrate a name change was absolutely necessary for its financial health.

In rare cases, donors will actually give to an institution in order to protect its name. In 2007 a small group of alumni gave $85 million -- an amount that eventually grew to $95 million by 2011 -- to the University of Wisconsin School of Business, a gift that sought to preserve the business school's original name. For at least 20 years following the donation, the school can not be named after a single donor or entity.

Peter Fissinger, president of Campbell & Company, a consulting group that helps nonprofits with fund-raising and other endeavors, emphasized that in higher education it’s normal for a donation of $100 million to include naming rights for the donor. Such rights act as an incentive for giving.

“These kinds of gifts allow institutions to be able to do things they wouldn't otherwise be able to do, and they are able to offer donor recognition in the form of naming rights,” he said. “One hundred million [dollars] to rename the engineering school at NYU sounds to me to be an appropriate gift to consider doing something like that.”

Yet some of the students and alumni opposing the name change disagree.

“This action is single-handedly wiping away our heritage,” wrote alumnus Natasha Taylor Berube in signing the petition. “It proves that NYU is all about money and is willing to name a college after someone who has no ties to the rich history of the institution.”

Added petitioner Jeffrey Nichtberger: “Their donation is indeed generous, but it does not warrant wiping out an entire school's culture and history. Their name, if anything, can be attached next to Polytechnic, but it cannot replace Polytechnic.”

One of the donors, Chandrika Tandon, is an NYU trustee, musician and founder and chair of a financial advisory firm. Her husband, Ranjan, is an engineer by training and founder and chair of a hedge fund. Neither attended the engineering school, but in a statement earlier this month Chandrika said that “getting to know the engineering school was truly electrifying” and that she and her husband “deeply respect the school’s extraordinary history and are honored to have a part in moving it forward.”

In an editorial, NYU’s student newspaper, The Washington Square News, supported the donation and the name change, and chided students for opposing the renaming.

“Given [the] Tandons’ longtime involvement with the university and the good the donation would do, surely the last thing on their minds is harm to the school. Students and alumni need to understand that in the long run, the name change doesn’t matter,” the editorial board wrote. “They will still graduate with an elite engineering education, no matter the name. [One hundred] million [dollars] will go much farther in helping the school than the old name ever could.”

Bertoni himself understands the reluctance of some alumni to embrace the new name, but is confident the $100 million donation will ultimately be a boon to the engineering school's academic reputation.

He says he's caught between two feelings.

“One is a sentimental side,” he explains. “When I have to refer to [the school] now, I'm confused. Do I refer to it as Polytechnic? Tandon doesn't have any emotional connection to me, but I will try to get over that.”

He continued: “The important thing that has not been focused on is what will that money do for the school …? The alumni at some point will see, if the money is wisely spent, that the reputation of the school has hopefully gone up as the result of new programs that were made possible by this donation.”

In the case of NYU, the Tandons’ naming rights are in perpetuity, but sometimes naming rights have an expiration date, often ranging anywhere from 50 to 100 years. LaMorte said NYU studied the thresholds other engineering schools used when renaming their schools after a donor. She said such gifts usually ranged between $6 million and $110 million, depending on the size and reputation of the institution. Harvard recently changed the name of its engineering school to honor John Paulson, a donor who gave the college $400 million.

LaMorte said that, with time, naming rights are requiring larger and larger donations. And it’s a big decision to offer a donor perpetual naming rights, as the school can never again be renamed, although there are other naming opportunities with professorships, institutes and buildings.

Sue Cunningham, president of the Council for Advancement and Support of Education, said, “The price of naming varies from university to university,” and added that there is more scrutiny on naming schools and buildings after donors nowadays, as there is more scrutiny in nearly all aspects of higher education.

“Things are ever changing in the world around us. With the immense growth in philanthropy in the educational sector … inevitably there's going to be closer and closer analysis with every aspect of what's happening in higher education, including philanthropy and including these namings,” she said, adding that any unrest from students about the NYU donation and renaming is “indicative to the extent in which these students care about their institution and feel invested in it.”

Sevier said when students who have problems with renaming an institution after a donor, “they don't always fully appreciate the economics involved or the political realities.”

LaMorte thinks students are coming around to the new name after the engineering dean explained to them, during a forum earlier this month, how NYU is hoping the change will create “distinctiveness” for the engineering program.

“The word ‘polytechnic’ is a word that is used often; it wasn’t distinctive just to our school. ‘Polytechnic’ denotes a small slice of the entire field of engineering,” LaMorte said. “I expect that over time people will get used to the NYU Tandon name, that it will become the brand and that brand will have its own sense of distinctiveness.”


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