January 21, 2010

College President Receives Controversial Fund-Raising Bonus

A recent article about a college president who will be paid a percentage of the money he helps raise has sparked an online debate among readers of The Chronicle of Higher Education.

Under his contract, Eric J. Barron, the new president of Florida State University, will receive $100,000 for every $100-million the university raises in its campaign to secure $1-billion. That's on top of his $395,000 salary.

Because the bonus is tied to the amount of money raised, the Association of Fundraising Professionals and other professional organizations for charitable fund raisers say it's unethical. Such an incentive could, in the view of those organizations, lead fund raisers to put undue pressure on donors to win the bonus - instead of putting the donor's and the institution's wellbeing first.

However, the university defends the bonus. Officials told The Chronicle that they wanted to give Mr. Barron an incentive for spending time on the campaign.

Still, most people who commented on the article oppose the bonus. "Absolutely inappropriate and highly unethical," one indignant reader writes.

But one supporter of Mr. Barron's bonus had a different reaction: "In a world where state governments are abdicating their responsibilities to fund public colleges and universities, yet wish to claim them as "state universities" and set tuition rates and name the trustees, new models of fund raising are necessary.... It will be easier to recruit presidents with the ‘carrot' of bonuses based upon success in the new model than compensation schemes that are not tied to these explicit new job goals."

What's your opinion? Should public institutions and other fund-raising organizations rethink their opposition to percentage-based pay?