In 2023, following the passage of the Donor Intent Protection Act in Kansas, Philanthropy Roundtable launched a monthly series on donor intent developments and controversies nationwide to better inform those who care about this important topic. The Donor Intent Protection Act has now passed in Kentucky and Georgia as well, and efforts on behalf of this legislation continue in additional states.
This month’s Donor Intent Watch includes reporting on a controversial “denaming” decision at Harvard University, an ongoing dispute at the College of the Holy Cross and important tips on avoiding unrestricted and endowment gifts.
We encourage donors to contact us with any questions about our featured items and consult additional resources on donor intent at the Roundtable’s Donor Intent Hub. We also welcome any news about donor intent we may have missed.
Harvard University Retains Arthur M. Sackler’s Name Despite Student Campaign
The Harvard Crimson has reported that following a multi-year “denaming” campaign by student activists, the university has decided to retain Arthur M. Sackler’s name on two campus buildings. This decision makes Harvard one of a handful of outliers in the nonprofit world to distinguish between Arthur Sackler and the members of the Sackler family responsible for Purdue Pharma’s 1996 release of OxyContin, blamed for the first wave of the opioid epidemic. Arthur Sackler died nearly a decade before in 1987.
The denaming proposal was submitted in October 2022. The committee which reviewed it included some of Harvard’s top administrators, including then-provost and now-president Alan M. Garber. In rejecting its demands, committee members refused to consider its “guilt by association” charges or its speculation that Arthur Sackler would have deployed the aggressive marketing techniques he had developed to promote OxyContin.
Instead, their report noted, “The denaming decision should be based only on the actions, inactions or words of Arthur Sackler. Respect for one’s individual identity is a fundamental tenet and part of the ethos of our society.”
Although Sackler’s 1982 donation included a written gift agreement, the committee chose to make its decision regardless of any restrictions on renaming or denaming in place, opting instead to consider community interest and the severity of the opioid crisis. The committee report also affirmed the decision to retain Sackler’s name did not indicate an endorsement of his actions. Additionally, they recommended Harvard describe his life and legacy to visitors of the two buildings that bear his name so they might form their own opinions about the man and the naming.
Read more here.
Holy Cross in Legal Dispute with Alumnus and Former Trustee
At the College of the Holy Cross in Worcester, Massachusetts, Cornelius B. Prior Jr. is suing his alma mater to recover $21 million donated over a 10-year period beginning in 2012. In that year, Prior began payments on a $25 million pledge to support construction of a new performing arts center on campus. The college opened the Prior Performing Arts Center at a total cost of $110 million in 2022. By that time, however, Prior and Holy Cross were already disputing the terms of the gift and Prior was refusing to pay the full amount pledged.
As reported by Boston.com, Prior’s lawsuit claims Holy Cross “has refused repeated requests by Mr. Prior to provide a full and detailed accounting for its investment and use of his funds.” He alleges his gifts began in 2012 with the understanding the college would give the development of the performing arts center top priority. Instead, he says, the construction was delayed, and he was pressured to donate $3 million to a new athletics center in which he had no interest.
The $21 million Prior is seeking includes that gift plus the $18 million he has already given to the performing arts center. He says he is holding back the final $7 million pledged to the center until Holy Cross provides more information about how his donations have been spent. Prior adds he also delayed “due to a legally binding hold on transactions in the stock that he would need to transfer in order to make a further gift of that size.”
Holy Cross said its 2014 written agreement with Prior – a college trustee at the time who served through June 2021 – stipulated he make the final payment on his pledge once the college received a certificate of occupancy for the arts center, adding he has refused to honor that arrangement. That agreement, the college notes, also “requires mediation and arbitration in the event of a dispute.”
On August 2, Judge David H. Hennessy agreed to consider the college’s request to compel mediation and arbitration. In the meantime, he has ordered Holy Cross to give Prior more financial information and ordered both parties to communicate directly with each other. The case goes back to court on August 30.
Avoid the Traps of Unrestricted and Endowment Grantmaking
In December 2023 Philanthropy Roundtable published Top Ten Tips for Higher Education Funders. What follows is an excerpt from that publication focused on the potential danger of unrestricted and endowment gifts.
While unrestricted gifts could make sense in other philanthropic realms—particularly for recipients with whom you have a close working relationship—they are fraught with peril in higher education, where philanthropic dollars are easily shifted around. Giving officers often steer donors toward unrestricted gifts precisely because they offer maximum flexibility to the recipient institution. Unless you are very specific with your desires, and put them in writing, your gifts could be used for something you find abhorrent.
Endowment gifts are equally problematic for donor intent. Endowments that support professorships or scholarships in a specific field of study ignore the chance that field may become far less popular or relevant over time or that a beneficiary of your generosity may have an agenda quite different from what you intended. And once a donor is out of the picture—through either death or disinterest— funds may be mismanaged or deliberately diverted to purposes other than those originally specified.
It may seem cynical to assume institutions pay more attention to living donors, but it is true that mischief in higher education philanthropy often occurs after a donor’s death.
College faculty and administrators are more likely to discover new “pressing” needs that outweigh the instructions of the original benefactor once that person is no longer in the picture.
The solution is simple. Do your giving while you’re alive and reevaluate decisions as needed. Giving while living also provides the unique chance to have an outsized influence through larger gift amounts, and it brings more joy to see the impact of your philanthropy.
Donor intent and accountability are best served by grants made in increments over a limited term, with continued donations dependent on scheduled progress reports. You may, for example, structure a $10 million grant to start a new program over a 10-year period to provide $3 million up front to enable the university to hire personnel and create the necessary infrastructure.
You can then schedule the remaining $7 million in regular payments, periodically reviewing to ensure the school is on track. If your grantee fails to make adequate progress toward stated goals, or is no longer aligned with your stated values, you will have the right to terminate the grant agreement and halt all further payments.
