Universities have come under fire in recent years for accepting big gifts from very wealthy donors. Critics charge that such gifts give philanthropists outsized influence in areas such as hiring and curricula. While these views have some merit, the advantages to these large gifts — particularly to public universities — far outweigh the potential, and easily mitigated, drawbacks.
Disinvestment by the government in higher education has increasingly made major donor contributions essential to the long-term health of schools like the one I lead, the University of Oregon. In fact, philanthropy is no longer the icing on the cake for public universities — it is a good portion of the cake itself.
First, a disclaimer. The University of Oregon has been fortunate to receive three extremely large donations from generous benefactors during the time I have served as president. Two gifts of $500 million each are from Penny and Phil Knight to create an applied bioengineering research campus. Another gift of more than $425 million is from Steve and Connie Ballmer to establish an innovative institute to fight one of the most important social problems of our time — the behavioral and mental-health crisis among our children. These gifts are transforming the university and enabling us to achieve our missions of teaching, research, and service.
The donations also reflect a substantial growth during the past several decades in charitable giving to American higher education — especially to public universities. One study found that from 1988 to 2018, giving to public universities grew by more than 230 percent even after taking inflation into account. Overall, donations to universities and colleges increased by more than 170 percent.
Much of that growth has been in the form of very large gifts, including 66 donations of greater than $100 million since 2010 — totaling more than $15.5 billion, according to Chronicle of Higher Education data. Last week, billionaire venture capitalist John Doerr and his wife, Ann, pledged an astonishing $1.1 billion to Stanford University to launch a new school of sustainability. Public universities have also received their share of big gifts — just over a quarter of those in the “more than $100 million” category.
Restrictions and Influence
Some philanthropy commentators have criticized the increase in megagiving to universities on several grounds. One concern is that they allow large donors too much control over their beneficiaries in terms of both the types of activities they are able to pursue and how they pursue them. Amplified by the charitable-gift tax deduction, donations are seen to skew priorities toward the desires of the wealthy and potentially away from the public interest. Especially troublesome are undisclosed conditions attached to these gifts.
The critics of large gifts do not, by and large, deny that colleges and universities — especially public institutions — need the resources private donors are willing to provide. In the case of public universities, that need is undeniable.
During the past several decades, state spending on public higher education has fallen sharply. Despite a 25 percent increase in enrollment since 2001, government support has gone up only 7.2 percent. In place of state subsidies, universities have turned to higher tuition. For example, state funding of the University of Oregon decreased by 61 percent in inflation-adjusted dollars from 1990 to 2021, while in-state tuition grew by $5,848 for full-time students. Aside from the most selective institutions, ever-increasing tuition is unsustainable, particularly as we try to diversify enrollment in all areas.
Importantly, at least for public universities without extremely large endowments, philanthropy will never replace the need for state funding. It is a truism that wealthy alumni and other donors do not want to pay to keep the lights on, the buildings warm, or administrators paid. Donors, especially those ready and able to make very large gifts, typically want to restrict their giving to particular programs or subject areas and never want to hear that their funds will substitute for state money.
Presidents of public universities can certainly join the critics of megagifts in calling on states to change course and make investments that will provide us with sufficient support to achieve our mission. But the likelihood of this happening in most states, at least in the foreseeable future, is small. State funds that were once committed to higher education are now paying for expanded health care and social-service costs. And even if money were to become magically available, the growing skepticism of a good chunk of the American electorate toward higher education might stand in the way.
As I look at what philanthropy has funded in my institution and in others, the argument that donor largesse diverts us from our mission seems weak. My fellow presidents and I know how to say no to gifts that do not fit our institutional goals, and we do it regularly. We know how to say no to conditions on gifts that are unacceptable, and virtually all of us have gift-acceptance policies to prevent this from occurring.
In my more than 18 years as first a law-school dean and then a university president, I can count on one hand the number of times I was offered gifts I felt were not in the best interest of my school. And I turned them down.
Admittedly, there have been well-publicized instances where donors try to assert control over who gets an endowed chair or what types of perspectives can be included in a new or existing program. Although no one can say for sure how prevalent this is, based upon my experience and my conversations with other higher-education leaders, I believe that these cases constitute an extremely small minority of gifts and could be prevented altogether by increased transparency. I think many of my colleagues would agree.
How can one say that the billions of dollars devoted to medical research, student scholarships, and technological innovation by generous and, yes, wealthy people is not something to cheer? While we should all work hard to increase government support for higher education, we cannot and should not for a moment feel guilty for celebrating the philanthropy that enables our universities to grow and flourish. And, perhaps, if we execute well on the big ideas our donors have funded, we can demonstrate to the skeptics that there is no better public investment than higher education.
