Big money talks very loudly. That is why states should demand more information from nonprofits about their biggest donors.
Marian Conway filed this report for The NonProfit Quarterly:
The question of whether a large donor will attempt to influence how the organization is run is a common concern to nonprofits. And not just public charities, either; foundations can feel this pressure too, particularly the philanthropic foundations whose sole purpose is to support universities. Often, the agreements between grantor and foundation grantee are secretive, struck behind closed doors.
It was revealed in 2018 that George Mason University had allowed the Charles Koch Foundation to actively participate in hiring and reviewing faculty as part of their grant gift agreements. Since 2005, the Koch grants to GMU total about $96 million. The uproar led the school to create new policies, made public in commentary by Angel Cabrera, GMU’s president. The new transparency policy would release “as much information as possible” without betraying a donor’s privacy.
However, that’s the decision of just one university. There’s no consistency from one foundation to another or one state to the next. For instance, the Research Foundation for the State University of New York (SUNY), which serves all the schools in the New York public higher education system, making it the largest research foundation for public higher education institutions in the country, must reveal information because more than half its $1.2 billion in revenue is government funding. Generally, government support generally goes right to the college, making government funding to a school foundation somewhat unusual. Accordingly, the foundation has now been included in the state oversight agreement for purchasing that covers SUNY institutions. Most of the other individual school foundations in the 64-college SUNY system do not have the same guidelines.
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Rather than trying to fit private foundations into a public mold, it seems easier to regulate their transparency. While some foundations do have a culture of openness, it will take state legislators to make the changes needed to have all public university foundations behave similarly. While the foundations may be private, and the gifts they receive come from private donors, they are working for public organizations and are in a vulnerable position, open to influence from larger donors. The foundations in question control billions of dollars, so the public should know if the donors behind those dollars are exerting pressure on the universities.
