Long established norms in higher education restrict the things a donor may demand as a condition of a gift. A donor can endow a chair, but not specify who is hired to fill it. A donor can create a scholarship, but not name the recipient, and so forth.
In theory, all sides of a controversy that broke out at Florida State University this week agree on the above stated principles. But an agreement the university made with a foundation in 2008 has become the subject of intense debate. The agreement created a donor-approved advisory board for a gift to support the economics department. The advisory board can't appoint anyone to a faculty slot or set up a new academic program, but it can veto a hire paid for with foundation funds.
The university insists that there are numerous protections in place to assure sound, faculty-led decision making on the program. But many faculty critics say that letting a foundation play this role gives away pivotal power that should rest with professors alone, and sets a dangerous precedent.
The debate is gathering more attention, some suggest, because the donor is the Charles G. Koch Charitable Foundation,  which says that it "primarily supports research and education programs that analyze the impact of free societies, in particular how they advance the well-being of mankind." That's Koch as in one of the Koch brothers who have become huge figures in conservative philanthropy and politics and are blamed for, or (depending on one's politics) credited with playing a key role in organizing opposition to public sector unions in Wisconsin and elsewhere.
While the agreement was made in 2008, it has become the focus of public attention only in the last week, prompted by a column  in The Tallahassee Democrat that focused on the grant. The column, by Ray Bellamy and Kent Miller, the former a current faculty member and the latter emeritus at Florida State, outlined concerns that the Koch arrangement amounted to a gift with "strings attached" that could give outside groups control of hiring and curricular decisions.
Florida State released a copy of the agreement with the foundation in response to a request from Inside Higher Ed. The deal calls for up to $6.59 million to be spent on the programs (with $1.5 million coming from the foundation), primarily to the economics department and primarily for faculty positions. Some funds would go to a new undergraduate program in economics.
Most of the criticism concerns the role of an advisory committee with veto power over use of the funds being given to Florida State -- and in particular to the role of that committee in faculty hiring. The advisory committee is selected by the foundation, in consultation with the chair of economics. Florida State notes that all three members of the panel are economists, two of them at Florida State. Critics note that they are appointed by an outside body.
With regard to faculty members hired with the funds, the gift agreement designates two specific powers to the advisory committee. After a faculty-created committee has done a first vetting of candidates and arrived at a group of candidates, the advisory committee "will review the list and make a recommendation as to which candidates are qualified to receive funding." Then, after the faculty committee selects a finalist, that name also goes to the advisory committee. The gift agreement states explicitly that no funds for any of the faculty positions "will be released without the review and approval" of the advisory board.
The new undergraduate program in the department would be designed to promote the objectives of the foundation, as stated in the agreement: "to advance the understanding and practice of those free voluntary processes and principles that promote social progress, human well-being, individual freedom, opportunity, and prosperity...."
The undergraduate program has its own advisory board -- of which three people are members of the economics department who are "agreeable" to the department chair, the social sciences dean, and the foundation. A fourth member is to be chosen by the foundation from outside the department.
Faculty leaders are concerned about these advisory board provisions -- and especially the reality that these boards have specific authority beyond advice. Sandra Lewis, a professor of education at Florida State who is president of the Faculty Senate, said that as soon as she read about the arrangement, she scheduled a discussion of the issue for today by the steering committee of the faculty body. "I am concerned if an outside entity has the ability to reject or has to approve the hiring of someone. That doesn't make any sense to me," she said.
Tom Auxter, a professor of philosophy at the University of Florida and president of United Faculty of Florida, which represents faculty members at 22 public campuses, including Florida State, said that "it's been a longstanding principle in academic life that curriculum decisions and hiring decisions are reserved for the faculty, and must not be preempted by different interests than the people who have direct responsibility for the quality of what we are doing." Auxter said that this position is supported by both national unions with which the Florida faculty members are affiliated: the American Federation of Teachers and the National Education Association.
National fund-raising groups are also cautious about the role of a donor once a gift is made. Standards from the Council for Advancement and Support of Education state: "A donor may not retain any explicit or implicit control over the use of a gift after acceptance by the institution."
Rae Goldsmith, vice president for advancement resources at CASE, said that the organization's guidelines do not prohibit donors from offering advice, or institutions from asking. But she said -- while stressing that she was not commenting on Florida State specifically -- that the question of control is crucial. "The key decisions related to the hiring of an individual need to rest with the institution," she said. "To the extent that there is an advisory role for the donor or representatives of the donor, the institution needs to be careful to make sure that role is not overly weighted in favor of the donor's perspective; that it retains all final hiring decisions."
Goldsmith further warned that institutions must be careful about "the perception that a donor has undue influence."
Eric J. Barron, president of Florida State, said in an interview that he was strongly committed to protecting the independence of the university and preserving the faculty role in hiring and the curriculum. And he said that one could see that commitment by examining "very clearly" the process for filling faculty positions created by the gift. In the first vetting by the advisory committee, it winnowed a group of 50 to 17, but didn't force anyone to be hired. Further, he said that the faculty of the department -- and only the faculty -- can put forward a name to hire.
He acknowledged that the advisory committee has veto power, but said that if that panel used its veto power, the university could still hire someone -- just not using money from the Koch grant. Further, he noted that the people on the advisory committees are economists, and most of them are economists at the university. "We are talking about serious economists," he said.
He said that while there is "a layer" in the process that involves the foundation, he noted the foundation has no direct sign-off power, except on the members of the advisory committees.
"How are we thwarting academic freedom when [the hires] are proposed by the faculty, interviewed by the faculty and selected by the faculty?" he asked. "They are not hiring anybody they don't want to. They are not being told who they have to hire.... If the Koch Foundation said yea or nay on hires, I would say we had crossed the line, but I don't see how this crosses the line."
Barron also noted that many colleges and universities have advisory boards for various programs, and that donors regularly serve on those boards. Even if these boards don't have the explicit authority for anything but giving advice, Barron said that the role can be quite meaningful and not all that different, in his opinion, from what is taking place at Florida State.
He also said that it was appropriate for an advisory committee "to say that you can't hire this person because they do not fit the objectives of the program." As an example removed from the current controversy, Barron offered this hypothetical: "Let's say you give a grant to preserve and play sacred music, and you want an advisory board to make sure this grant is well utilized, and the faculty propose hiring someone who does jazz, and the advisory board rejects it. Is that undue influence?"
So why does Barron think so many people are suddenly focused on a deal the university made three years ago (before he was president)? "I think the problem here is that there is politics in the air about who is the type of person who might be hired, as if the university doesn't care about hiring scholars," he said.
It's certainly the case that much of the discussion in the liberal parts of the blogosphere has focused on the Koch ties, with headlines like "Koch U: Florida State University Hands Over Economics Department to Billionaire Libertarians"  or "FSU Whores Out Its Econ Department to Billionaire Activist Koch Brothers." 
Inside Higher Ed asked the various faculty critics of the Koch deal whether they were concerned about the source of the funds. All said that Koch's politics are irrelevant, and that the issue was giving up control to a donor.
Asked if there would be a similar uproar over the identical agreement with foundations led by Michael Moore or Bill Gates, Barron said that "my suspicion is that if this was about the Michael Moore Foundation, this would play out the same way, but that if this was Gates, it wouldn't play out this way at all." People seem to be assuming, he said, that because of Koch's associations with politics, "our faculty have been bought."
Ryan Stowers, the Koch Foundation's program director for higher education, said via e-mail that the arrangement with Florida State was an appropriate way for the foundation to be sure its money would be spent in ways consistent with its mission.
"There are many examples in higher education where donor intent is altered or ignored," Stowers said. "For this reason, most of our gifts to colleges and universities are given over short time spans. This provides both the university and the donor more flexibility in their relationship. It also mitigates the risk of donor intent being misconstrued over long periods of time." (The agreement with Florida State is for six years.)
Stowers said that he believed that the agreement with Florida State was "transparent" and promoted academic freedom. But he also stressed the foundation's need to watch how its grants are used. "We believe that donors, especially charitable foundations that are legally required to expend funds in furtherance of their charitable mission, should care about how their money is used and that they should structure their gifts accordingly," he said.