Violating Donor Intent, Taxpayers Take Warning

A new paper from the John Pope Center for Higher Education by Martin Morse Wooster looks at how universities have used funds or property bequests by large donors in ways that violated the donors’ intent.

The paper, “Games Universities Play: And How Donors Can Avoid Them” proceeds through a series of case studies exploring the several different kinds of mismanagement. Some examples:

— A Yale alumnus gives $20 million to his school for the teaching of Western Civ classes. Faculty resistance waylays the project and eventually the donor pulled his money.

— Boston University hit up to renovate a library named for David Mugar’s grandfather. The university subsequently realizes that the project will cost more and therefore cancels it. Mugar sues and has his money effectively shifted to other non-profit causes.

— The Robertson family creates a foundation to support the training of government foreign policy experts at Princeton. The university uses hundreds of millions of dollars from the endowment on projects other than that specified.

— Art given to Brandeis University for perpetual display may be sold to make up for budget shortfalls elsewhere in the university budget.

When we consider that this is the treatment that is received by major donors who were very specific about how their money should be spent, it seems obvious that money given to public institutions from tax revenue and assigned to nebulous purposes, will often be contrary to the wishes of taxpaying public.