The resignation of University of Pennsylvania President Liz Magill, under apparent pressure from donors, has sparked a debate about donor influence — not just in higher education but in the nonprofit sector more broadly.
Magill’s resignation followed a congressional hearing last week regarding antisemitism on campuses, in which Magill and the presidents of Harvard and MIT came under harsh criticism — and went viral — for their responses to questions about whether calling for the genocide of Jews would violate their schools’ codes of conduct on bullying and harassment.
Many have criticized the University of Pennsylvania for caving to donor demands, while others suggest donors have a responsibility to express their concerns and pull their funds when they disagree with an institution’s approach.
The Chronicle of Philanthropy asked nonprofit leaders, academics, and donors to weigh in on the controversy. Do the recent campus events signal that nonprofits are responsive to donors — or that donors have too much power? What does the shift mean for nonprofits of all types and sizes? And what should leaders do to prepare for whatever happens next?
Contributors’ responses have been edited for length.
Benjamin Soskis, senior research associate, Urban Institute’s Center on Nonprofits and Philanthropy
What’s really new when it comes to the campus donor revolt? Assertions of donor prerogatives certainly aren’t novel, especially on college campuses. The inboxes of countless university presidents and development officers attest to that. And plenty of major donors have threatened to withhold future gifts if certain conditions aren’t met, or as a reaction to institutional positions they don’t like.
What does feel new, however, is the public and performative nature of those assertions, a sort of Elon Musk-ification of higher-ed philanthropy. In the past, such demands and threats were typically made behind closed doors and brought to light only after the fact. But during the last few weeks, major donors to elite universities sought to rally other donors to demand these institutions take a stronger stance against anti-Israel campus protests and charges of antisemitism. They deployed social media, traditional media, and their donor networks to spread their message.
This mix of major-donor dynamics and online social activism is a combustible one, and if it’s taken up more generally for other causes and toward other institutions, it could have significant effects, not just on the institutions in question, but on broader norms and debates over philanthropy and the public good.
It has already led to more public attention on the issue of donor power and a pulling back of the curtain on major-donor stewardship and development. It also raises questions for the entire sector.
The most charitable read on the actions of Bill Ackman, Mark Rowan, and other outspoken donors is that they are simply using their power and access to speak on behalf of a broader constituency — in this case Jewish students, alumni, and faculty who did not feel heard.
But what does it mean for major donors to be the face of such a campaign? It can certainly alter the nature of the negotiations between the various stakeholders. Ackman, for instance, alleged that one reason why Harvard’s board did not force the university’s president to resign was that it did not want to be seen as “kowtowing” to him. There are certainly ways in which the expectations of major donors — the transactional approaches and entrepreneurial perspectives they borrow from their business realms — shape their perception of grievance, injury, and remedy.
We should ask ourselves these questions: What would campaigns targeting universities around charges of antisemitism look like if major donors took a more backseat role? And what would future campaigns targeting other nonprofits look like if major donors emerge as more aggressive, public figures within them?
Andrés Spokoiny, president and CEO, Jewish Funders Network
Magill’s resignation seems to have sparked a moral panic about so-called “abuses of donor power.” That reaction is overwrought and even suspicious.
The sudden discovery that donors exert influence over their grantees is disingenuous at best. Every nonprofit executive knows that donors have always had influence over an organization’s choices. Moreover, until it was used to protect Jewish students, donor influence was considered positive, with funders encouraged to make their views heard.
When three Pittsburgh foundations halted funding to the city educational system 20 years ago to force change, the Stanford Social Innovation Review cited it as an example of bold philanthropic leadership. The response to the Magill case is no less bold and no less positive. Without donor pressure, the intellectual and moral rot of elite academic institutions wouldn’t have received the attention it urgently deserved. Without alumni activism, the open season on Jewish studies and faculty, the calls for genocide, and the glorification of murder and rape would have continued unabated.
Would an African American donor be exercising undue influence if she cut funding to an organization that allowed a KKK parade on its grounds, or would she simply be acting in accordance with her values? Would it be irrational or immoral for a pro-choice donor to halt funding to an organization that celebrates the demise of Roe v. Wade?
In this case, donor activism was both necessary and salutary. It provided a jolt to a system that had become hostage to a bizarre ideology that organizes the world along spurious hierarchies of oppression; a system that applied double standards and submitted academic rigor to ideological conformity.
My organization, the Jewish Funders Network, does not believe in funders using the power of the purse to force ideological alignment. However, given the current debate on college antisemitism, not intervening would be the real breach of ethics. Donors have the right and the obligation to advocate for their core values.
The notion that donors will now have too much power to dictate conditions should be taken with a mountain of salt. It is true that if nonprofits want to call for genocide or embrace antisemitism or racism, donors won’t fund them. That is a problem for those nonprofits. But if donor pressure is the only thing that would force a nonprofit to abandon antisemitism, then shame on them. Current campus events won’t lead to a new wave of donor interference, since it has always been the responsibility of donors to make sure their values are reflected in the institutions they support.
Let’s hope bold leadership by donors can force a reevaluation of a broken paradigm of higher education and bring about badly needed change.
Corey Saylor, research and advocacy director, Council on American-Islamic Relations
The donor pressure campaign at elite universities raises concerns that go beyond academia. Is philanthropy about collaboration with the institutions it supports — or influence over them?
Important work to achieve justice is often outside the edges of mainstream political and philanthropic comfort. Many of us who opposed the 2003 Iraq invasion remember that questioning the government was often met with accusations of treason until the war turned into a quagmire and weapons of mass destruction were never found.
Presenting the Palestinian perspective during the past two months often feels much the same. Public pressure to conform to social norms, even when they are wrongheaded, can lead philanthropists to intervene in nonprofits’ work as the political temperature rises.
As a supporter of Palestinian humanity, I was horrified to hear Republican Representative Brian Mast of Florida argue on the U.S. House floor recently that there are “very few innocent Palestinian civilians.” To me that sounds like he believes it’s acceptable to kill every Palestinian. Yet I oppose restricting Mast’s speech, even as I forcefully condemn it. Donors should show equal respect for university codes of conduct that conform to the same free speech laws that Mast benefits from.
Experts like me do this work because it moves us. Islamophobia, anti-Arab bigotry, antisemitism, racism, and other forms of bias are all reprehensible. Philanthropists are similarly driven to create good. In partnership, I strive to learn from them and hope they learn from me as well. This collaboration, or what Muslims call shura, can result in the creation of good policies and programs — and the defeat of bad ones.
Turning donor support into an expectation of influence can easily swerve into censorship, either because in deference to the political mood advocates silence themselves, or because institutions roll back free speech protections. Such actions hurt us all — progressives and conservatives alike.
Lauren Janus, COO and senior philanthropic advisor, Phila Engaged Giving
How many times have development directors heard that a funder is moving elsewhere because they have “different priorities” or “aren’t aligned with the new direction of the nonprofit?” Donors are mercurial by nature. They have always had power because they control the resources of organizations whose work does not yield an economic return.
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What’s new, as illustrated by the campus cases, is the level of influence major donors are publicly asserting when they object to the direction an organization is taking. Using shareholder-action tactics against nonprofits has been relatively rare until these past few weeks.
That said, I believe the campus situation is less about nonprofits yielding to donor pressure (nothing new there), than about the current reality facing our country. As we close out 2023, rhetoric is high, and fear is abundant.
What does this mean for nonprofit leaders in the year ahead — a year that will likely be especially contentious and disruptive? I suggest first taking time to clearly articulate your values, publicly and with your donors. Then prepare for some difficult conversations. Explain to donors what truths you are juggling in your role, and get ready to listen, accepting that you might not like everything you hear. You may lose donors, but you also might secure the trust of many more.
Aaron Dorfman, executive director, National Committee for Responsive Philanthropy
Balancing the outsized influence of wealth in our economic and governing systems with community-centered power and priorities is critical to creating a just and equitable multiracial democracy. That’s why I’m deeply disturbed by reports of threats to defund groups that stand against hate and antisemitism but have also called for a ceasefire in the war between Israel and Hamas, labeled the conflict genocide, or otherwise spoken out against the mass bombing of Gaza.
Threats like these reflect an abuse of funder power and are antithetical to a vision of partnership and mutual respect between donors and grantees. Weaponizing access to funding creates a chilling effect on nonprofits’ speech and agency, and represents the worst impulses of funders to wield destructive power to control grantees as opposed to engaging with them as equals. It’s a major reason why the philanthropic sector struggles to consistently build trust with many communities. We must all be aware of the long-term consequences of our actions. Relationships that we sever now will not be easily rebuilt.
All of us in philanthropy need to engage in hard conversations as we commit to responding to events in ways that move us towards a just and peaceful world. Rather than choosing inaction, censorship, or retaliation, donors should take this opportunity to deepen dialogue with grantees and with communities under threat. Philanthropy’s power should be used with wisdom and in solidarity, not to spread more fear and harm movements with the threat of scarcity.
Carmen Rojas, president and CEO, Marguerite Casey Foundation
The response of major university donors to recent events is part of an unraveling of cornerstones of our democracy over the past several months, including free speech and affirmative action. This will have a long-lasting and chilling effect on the nonprofit sector.
Conservative forces have used their power to influence what is and isn’t allowed when it comes to speech, action, and the giving practices of donors. They are attempting to shape our democracy to match their preferences and what they deem acceptable.
This isn’t happening in a vacuum. These actions result in forward-thinking universities and nonprofits that are otherwise committed to racial justice and economic inclusion, feeling they must bend to anti-democratic forces and major donors. This should be concerning to everyone. Nonprofits and donors alike should be doubling down to resist pressure from conservative groups, which are at odds with the fundamental values essential to a just society.
There’s always been an asymmetry of power between donors and the nonprofit leaders they profess to support. What is especially concerning today though is how donors choose to speak out aggressively about issues that affect them personally, but often fail to stand up for the larger issues of equity and justice.
But make no mistake: The recent chain of events creates a unique opportunity for nonprofits and their donors. By working together, they can create standards for addressing the conflicting commitments from university and nonprofit donors across the country. We can develop guidelines that explicitly call out all forms of racism, bigotry, sexism, and antisemitism, for example. We can fully support everyone, not just a select few, in combating the rise in anti-democratic behavior by holding people accountable for their actions. Because, of course, actions speak louder than words.
Adam Kissel, visiting fellow, higher education reform, the Heritage Foundation
Donor relationships matter. Donors generally support the mission and values of the organizations they support. When they believe an organization has betrayed its mission, they are well justified in registering their concern. When they are correct, the organization should adapt.
Donor voices certainly were heard at Penn. Some donors correctly surmised that Penn was not the institution they had thought it to be. Like Harvard, MIT, and many other universities, it has double standards regarding free speech and how it treats members of identity groups.
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In many nonprofits, major donors are close partners rather than arms-length givers; they are not mere outsiders. Furthermore, communications from large donors tend to be better informed than those from the general public. For these reasons, large donors deserve increased attention.
At the same time, there have been far too many vectors influencing Penn’s specific situation to draw any broad conclusion about the “correct” level of influence of donors on nonprofits. Each organization has the responsibility to properly address internal and external requests and demands without sacrificing its integrity. Donors have the power that an organization allows them. For a wealthy university, even the withdrawal of a nine-figure gift can be absorbed, while a small organization might have much greater temptation to change because of a donor’s influence. Such a change may be the right move nevertheless. Each situation is unique.
Donors to higher education at all levels will more often decide that nostalgia is not enough to justify giving. What’s next for colleges and universities is hesitation before alumni open their wallets.
Kenneth Roth, former executive director Human Rights Watch; senior fellow, Harvard Kennedy School Carr Center for Human Rights Policy
At Human Rights Watch, which I directed for nearly three decades, we understood the importance of ensuring that donors did not compromise the integrity of our investigations and reporting. On the one hand, the need to attract donors kept us on our toes. We had to demonstrate impact sufficient to justify their investment. On the other hand, we drew lines to ensure that donor pressure did not compromise our work.
For example, we had a strict rule against accepting funds, directly or indirectly, from any government. The core purpose of Human Rights Watch is to monitor and, as needed, criticize governments. We couldn’t do that effectively if we worried that a government might retaliate by cutting our funding. We had similar conflict-of-interest rules against gifts from donors who might be officers or directors of companies on which we reported as well as their direct competitors.
For university presidents, that line should be drawn at any gift, or donor, that would undermine the freedom of faculty and students to comment on the world. A defense of academic freedom should be a foundational principle of any university. Allowing donors to censor professors or students would be akin to Human Rights Watch letting donors dictate its reporting. No leader of either institution should permit donors to cross that line.
But in recent years, universities have effectively invited such donor meddling by commenting on certain world affairs as institutions — not as members of the faculty or student body but in the name of the university as a whole. The move was typically well-intentioned — to express concern about a global development that was disturbing to students. But it encouraged donor pressure.
What donors would not want the imprimatur of a prestigious university behind their views? It was then a short leap from donor pressure shaping this external commentary to donor pressure to silence faculty or student expression that the donor disliked, as the University of Pennsylvania’s former president, Liz Magill, faced for allowing a Palestinian literary festival in September. That violates academic freedom.
But we should recognize that universities share part of the blame for this evolution. As recommended by the University of Chicago’s 1967 Kalven Report, university leaders should get out of the business of commenting on global affairs. That would deny donors an obvious target of pressure and better enable universities to defend the right of faculty and students to engage in such commentary without donor interference.
University leaders should still protect the university community from intimidation, harassment, or violence (though not from comments that merely make students uncomfortable, since universities should be preparing students to address uncomfortable issues). But university leaders should refuse, on their own or under donor pressure, to discipline or silence faculty or students for exercising their academic freedom.
Noah D. Drezner, professor of higher education, Teachers College, Columbia University
The response by donors to alleged campus antisemitism should be reframed as a form of donor activism rather than outright control. Donor activism, akin to other forms of activism on campuses, is aligned with the mission of higher education, emphasizing the development of ethical and engaged citizens. Just as student protests advocate for institutional change, donors and alumni leverage their financial influence to shape the direction of their alma mater.
The growing tension we are witnessing calls for a balancing act that empowers faculty exploration of diverse and controversial ideas while involving alumni and donors as valuable stakeholders — without compromising academic principles or faculty control over curriculum and research.
Higher education and other nonprofit leaders can prepare for future donor activism by putting measures in place that enhance transparency, communication, and adaptability. All institutions should establish a clear and comprehensive code of ethics that outlines the organization’s values and principles and serves as a guide for both internal decision making and external interactions with donors. This approach will help leaders navigate the donor activism landscape, while maintaining a balance between the concerns of all its constituents.
Lila Corwin Berman, professor of Jewish history, Temple University
Two things are clear to me from studying the history of American Jewish philanthropy. First, America’s investment in philanthropy has encouraged diverse groups to pursue their diverse interests. Second, philanthropy is not good at equalizing diverse claims within a given community or institution.
In other words, American philanthropy is structurally bound to diversity, but its market logic tends to function unequally, valuing some interests or claims above others. Given this, the system has clear but limited public utility.
The events that occurred at elite universities over the last two months exhibit both the remarkable strengths and profound weaknesses of American philanthropy. For this reason, any effort to understand the story must confront the complex and contentious role that philanthropy plays in American civic life.
It is hardly a side note to the story that its main characters are Jewish donors. Their presence highlights how philanthropy, as a structure that organizes and manages society, operates to diversify civic spaces. It bears emphasizing that the level of access these Jewish individuals enjoy to the presidents of elite universities, with some even serving on the school’s boards, would have been beyond the reach of most of their parents. Even more starkly, many of their grandparents would have had little to no chance of enrolling in schools like Harvard.
A broad set of historical transformations, including the end of quota systems that blocked Jewish admissions to some elite universities, enabled these individuals not only to attend elite schools, but eventually to gain the financial and social capital to become philanthropic leaders in those same institutions. Philanthropy was an effective tool for these American Jews to attain positions of power in some of the same universities that had once denied them entry, let alone influence.
The dramatic action in the story, however, reveals the structural limitations of philanthropy when it comes to giving equal treatment to diverse views. In the wake of the horrific October 7 massacre, Jewish donors primarily — though not exclusively — publicly condemned universities for inadequate statements and insufficient responses to anti-Israel or pro-Palestinian events on campus.
Without litigating the merits of their condemnation, it seems clear that these individuals had more power than other constituent groups, including students and faculty, to advance their claims. Their demands prioritized their interests, even if they also believed they were speaking on behalf of other university groups.
Any institution that relies on philanthropy must understand its limits. Philanthropy has the potential to bring different voices to the tables of public and institutional power. But nonprofits should not delude themselves into believing that the system is a good or even adequate tool to advance fairness or equality. To achieve that end, they must look well beyond their largest donors, even if that means foregoing a check or enduring harsh and public critique.