Educational scholars have examined the relationship of philanthropy and its contributions to the public university. Yet, there has been little discussion of the influence of philanthropy on the governance space of the public research university, and specifically as conditional philanthropy may affect academic integrity and shared governance. In this chapter, we consider these larger issues in the context of a study of a recent case. Drawing on public records, interviews, and university documents, the chapter examines conditional donation of The Charles G. Koch Foundation (CKF) to the Florida State University (FSU). We suggest that the Koch Foundation gift appears to illustrate a new model of governance based philanthropy. It has done so by tying donations to control or influence of the internal governing mechanics of an academic unit of a public university. This model has generated controversy. Though there was substantial faculty and student backlash, the model appears to be evidence of a new philanthropic relationship between the public university and substantial donors, one in which donors may change the nature of traditional shared governance relationships within the university. We maintain that instances of such “new” strategic philanthropy require greater focus on and sensitivity to shared governance and faculty input as a way to ensure accountability, especially to preserve the integrity of the academic enterprise and its public mission where donors seek to leverage philanthropy into choices relating to faculty hires, courses and programs traditionally at the center of faculty prerogatives in shared governance.
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The close relationship between philanthropy and higher education has played a substantial role within the American higher education system. Bonglia (2002, p. 9) notes that “Early in the 18th Century, private support of institutions of higher education by philanthropists became a trend.” And indeed, this relationship is just as salient today as it has been in the colonial area. Drezner (2011), for example, noted that “American higher education as we know it today would not exist if it were not for the voluntary contributions of many individuals” (p. 26). Hall (1992) drew similar conclusions, suggesting that “[n]o single force is more responsible for the emergence of the modern university in America than giving by individuals and foundations” (p. 403). The recent economic downturn coupled with the steady decline of state support for public universities, for instance, has forced public institutions to position themselves to better harvest philanthropic donations (Speck, 2010; Cheslock & Gianneschi, 2008). As McAlexander and Koenig (2012) have noted, “The growing concern about the ability to glean necessary financial resources from the traditional sources of tuition, taxes (for public universities), and fees, has driven leaders of institutions of higher education to place a much sharper focus on developing the philanthropic capacity of alumni, friends, and other partners to provide the economic support necessary to deliver higher education in the modern millennium” (p. 122). Additionally, this steady decrease in state appropriations for higher education represents what many scholars have suggested as a “new paradigm” of higher education funding (Speck, 2010; McKeown, 1996). Increasingly, more and more public universities have started to describe themselves as state-assisted, rather than state-supported, institutions (Hossler, 2004). Naturally, this has created an environment where public institutions are now actively searching out alternative revenue sources because this has become “the only source of real discretionary money and in many cases is assuming a critical role in balancing institutional budgets” (Leslie & Ramey, 1988, p.115-116).
One substantial source of such alternative revenue sources are foundations. Unlike public bodies, foundations are highly centralized and closed systems. Public accountability is very limited and one of the few forms of accountability are done mainly through tax laws, which requires foundations to allocate funding for charitable purposes. They are also accountable to their own organizational by-laws and their trustees, but not to the general public. Many times, major foundations are guided by wide ranging social agendas which is collectively understood as strategic philanthropy (Dowey, 2001; Barrows, 1990). With over $700 billion in assets and over $50 billion in total giving per year (Foundation Center, 2014), foundations collectively have an immense amount of power to fund public policy initiatives at a national and global scale (see, e.g., Roelofs, 2003 and Dowey, 2001). According to Dowey (2001), governmental devolution coupled with increasing austerity measures have made these organizations even more powerful.