Sunday, September 18, 2016


And With a Responsible Opposing Viewpoint…

Back when the FCC had a “fairness doctrine,” television stations didn’t editorialize much.  When they did, they had to offer time for “responsible opposing viewpoints.”  Typically, that meant they’d editorialize mostly on anodyne topics, if they did any at all.

Now, of course, the fairness doctrine is history, and stations can devote themselves to partisan agitprop all day every day if they want.  But the idea of a “responsible opposing viewpoint” stuck with me.  There’s something to it.

I got hit with one a few days ago.  Most colleges that have fundraising campaigns offer donors the option of choosing among several various earmarked projects, or making an unrestricted gift.  I’ve argued for years that in many cases, the unrestricted gift option actually does the most good.  It allows foundations to support experimental projects, to cover their own costs, and to make up for shortfalls in expected giving.  Many foundations even have their own scholarships that are independent of any given donor, and they use those scholarships to benefit students who might slip between the cracks of endowed gifts.  

The assumption behind my position was that most foundations are trying to do the right thing, and that having a bit of control can help them be more effective.  And in most cases, I stand by that.

Then I heard about the former librarian at the University of New Hampshire.  By living frugally for many years, he was able to donate an unrestricted $4 million (posthumously) to the university.  The university is using $2.5 million of that for an expanded career center, $100,000 for the library, and $1 million for a new electronic scoreboard for the football team.

The donor is deceased, so we can’t ask him directly what he thinks of that use of the money.  But it certainly seems asinine, if not offensive.  A scoreboard?  Really?

And that’s where some folks on Twitter raised the responsible opposing viewpoint.  Wouldn’t restrictions from the donor have prevented this apparent abuse?


I say “probably” rather than “yes” because it isn’t always that simple.  Donors can’t be omniscient, so restrictions have to be written to a best approximation of what’s likely to happen.  As personnel change and times change, interpretations of appropriate intent can evolve.  Some foundations take looser interpretations than others, and not necessarily in sinister ways.  There are times when a foundation has money so tightly bound in one area that it goes unused, while other needs go unmet; having some flexible funds allows them to even out the spikiness.

All of that said, though, I’ll plead guilty to having assumed basic good faith and professionalism.  Those have held true at every place I’ve worked.  But they may not hold true everywhere.

Fundraising is a very different type of business than the day-to-day operation of a college.  It relies on long-term relationships and reputation to a much greater degree.  In my experience, savvy fundraisers know that, and are keen on maintaining good relationships with donors.  (They sometimes insist on using the term “friendraising,” which I’ll admit raises my writerly hackles.)  Successful fundraisers know that the blowback from bad publicity -- such as this case -- can turn off donors for years to come.  The temptation to play fast and loose is tempered by the realization that one sketchy move could cost years, or even a career.

But there are no guarantees.  Had the UNH donor specified something like “must be used for the library” or “must be used for scholarships,” the money wouldn’t have gone to a scoreboard.  In this case, I wouldn’t be at all surprised to see blowback over time.  The foundation may not have broken any rules, but fundraising is about much more than that.

So yes, there are limits to the virtues of unrestricted gifts.  I concede that to the responsible opposing viewpoint.  I maintain that they’re generally more useful, but if your alma mater has a history of shenanigans, then restricted gifts may be safer.  Point taken.

You are right that it isn't possible to anticipate what will happen. After all, the donor could have restricted it to the library, which the university then uses for mundane expenses that frees up other funds to pay for the scoreboard. Universities figure out all sorts of ways to use regular funds to feed their athletic dreams. Maybe that scoreboard is also used to show movies?

One suggestion: There is a middle ground where you can raise money for a special fund that isn't designated but is spent in ways that are approved by an advisory board of major donors. That is a way to have flexibility while keeping the confidence of those who matter over the long haul.
The thing is, money is fungible. Anyone with a little basic economics should know this. If I give you money to spend on A, but you'd really rather spend it on B, it's trivial to simply take out the money you were going to spend on A, replace that with my money that's been earmarked for A, and spend that surplus on B.

This is the classic "lottery money for education" scam that's been running for decades. By law, money made from the lottery is earmarked for education. In practice, that money goes into the education pot and an equal amount general fund money goes out of it, to be spent on something else.

In the end, you either trust the institution with your money and trust they'll do go things with it, or you don't. If you do, you give them your money and trust it will be used well. If you don't, no amount of hedging or earmarking will help.
It's your naïveté that makes this blog such a charming read. Rule of thumb: any institution with a major sports program will always put unrestricted donations to the worst possible use...
What Shane said.

Chuchundra: However, university bureaucracies are not monolithic, and some parts of the university have claims to particular funds and the obligation to spend them in certain ways. If he had given all 4 million to the library, then the administration had tried to cut 4 million off their budget next year, there would have been pushback, and the winner would not have been predetermined. Surely "university bureaucracies are full of struggling factions" is true in the US too? (One Canadian university has at least four different systems of copy machines and printers, with four different cards or electronic accounts, because four different parts of the university are paying for them).
Even worse than the decision to use the gift for a scoreboard, though, was the UNH justification for that decision:

“A facility like Wildcat Stadium is transformative to our campus experience in helping UNH to recruit the best and brightest students, build our campus and alumni community pride, and host events like Special Olympics and state high school championships that are as excellent as one would expect from a flagship state university,” Mantz said.

They have, apparently, no idea how bad this decision both is and sounds.
Is it possible for donors with a lot of money to specify that budgets may not be cut? Something like, "I will donate $4 million to the library, but only if the library's budget -- without counting this gift -- remains at its current level or higher, adjusted for inflation." Has this ever worked anywhere?
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