Harvard Donors Beware: The University Wants Your Money With No Strings Attached

A “Gift Policy Guide” is Harvard University’s latest mark on American higher education. Unlike Vegas, what happens at Harvard rarely stays at Harvard, so higher education donors across the board should be wary.

In late June, Harvard issued a “Gift Policy Guide” that recommends donors recast gift restrictions as mere suggestions, which the university seemingly has the freedom to ignore if and when it feels like it.

Colleges and universities love unrestricted gifts—especially hefty, unrestricted endowment gifts. They come with virtually no accountability to the generous donor. But what colleges and universities need in these fraught and stormy times at least as much as money is the measured voice of those outside the academy whose philanthropy, shaped by their professional experience and vision, can expand and enrich a university’s mission.

Targeted giving—strings attached—may well be the only way that topics and programs that are essential for intellectual development but outside the campus fashions and orthodoxies of the day can exist. Targeted giving is what regularly creates and sustains programs in free market economics, entrepreneurship, Western Civilization, Great Books, military history, and formal debate. Think intellectual diversity. The Stephen S. Smith Center at Xavier University, established by donor support, has created a program in the business school around the study of freedom and free market solutions to problems in society. Extraordinary programs like this could suffer or perhaps never come into being in the absence of restricted giving.

The new Gift Policy Guide, however, implies that Harvard will gladly take alumni money, but donors should leave the ideas to Harvard. One of its stated goals is “ensuring alignment and autonomy,” a proviso that should send discerning donors running for the hills.

It gets worse. Harvard lists donor provisions that the university will not accept. These include preventing the donor’s funds “from being used to pay overhead, indirect, or administrative costs” or granting “the donor the right to enforce the terms and conditions of the gift.” Harvard is effectively absolving itself of the responsibility to uphold its end of a gift agreement—to execute faithfully a shared vision.

In 2009, Massachusetts adopted the Uniform Prudent Management of Institutional Funds Act, or UPMIFA. Among other provisions, this act allows charities to petition a court to modify a donor-imposed restriction if the “restriction contained in a gift instrument on the use of an institutional fund becomes unlawful, impracticable, impossible to achieve, or wasteful.”

Harvard’s policy, however, goes well beyond UPMIFA. The university is authorized to “redesignate a fund, working in consultation with the donor, if possible, if the designated purpose of a fund is no longer feasible or appropriate.”

Not only does this policy sidestep the burden of a court petition, but “feasible or appropriate” is a much lower bar for modifying a donor restriction than “unlawful, impracticable, impossible to achieve, or wasteful.” And “working with the donor, if possible” sounds like a contract printed with erasable ink.

When looking at the broader context of higher education philanthropy, Harvard’s gift policies resemble a preemptive strike to prevent lawsuits like those over the famous Robertson endowment at Princeton University, in which the court found Princeton at fault for redirecting funds in violation of the gift agreement with the heirs of the A&P grocery fortune. The donors intended their gift to fund graduate students who pursue careers in government service, but Princeton used the money to train students in other careers.

An interview with Provost Alan Garber, who chairs the gift policy committee, and Alumni Affairs and Development Vice President Brian Lee focuses on the laudable elements of the new policy, such as its commitment to academic freedom and its resolution that Harvard will not solicit gifts from donors who are known to have a family member applying for admission. Garber and Lee are nearly silent, however, on the guide’s more problematic aspects. They suggest a certain amount of elasticity in the new guide, intended as a “living document, subject to discussion and review,” that accompanies a gift acceptance process. But only the most experienced donors will understand that these rules may be bent.

My well-heeled alma mater, Yale University, doesn’t want to be left behind in this brave new world of philanthropy-without-accountability. Its language is a little gentler: It “recommends,” rather than requires, the following line: “[If] it becomes impractical to apply my bequest to the designated purpose(s), the Yale Board of Trustees shall make such modifications as will appropriately recognize my interests in coordination with university priorities.” Other institutions are sure to follow.

Colleges are reeling from the damage the pandemic has wreaked upon them. Two major revenue sources—tuition and state appropriations—are dwindling. Allowing donors some discretion in how their funds will be applied has traditionally encouraged giving. Perhaps Harvard, as the wealthiest university in the nation, believes that it can disregard donor intent with impunity. But the effects of such a policy change, both on Harvard as well as on higher education writ large, have highly disturbing implications.

This article originally appeared here.