Big Donors Can Cause a Heap of Trouble for Universities

We recently discussed the problems that can ensue when institutions of higher learning essentially sell their souls to folks with big money.

This reminded me of a story I heard some 20 years ago, back in my sportswriting days.

It seems a prominent college basketball coach had become friendly with an industrial magnate who had given major gifts to several universities, including the one that employed the coach.

The coach knew that his program could benefit if the businessman were to make a donation of several million dollars. But the coach also knew that the businessman held views on racial issues that were not exactly progressive.

In short, the businessman was a racist. "If I take money from him, I know he's going to want to limit the number of black players we have on the team. In fact, he'll probably want to make sure we have at least one or two white guys playing all the time. That's how he thinks."

The coach decided to pass on any donation from Mr. Big Bucks. Showing that kind of good sense probably helps explain why the coach now is in several sports halls of fame.

The people who now "lead" UAB could stand to learn from this coaching great. They have evidently allowed a major donor with a right-wing world view to dictate that I be fired for writing a blog--on my own time--that he happens to disagree with.

Actually, it's not a matter of disagreeing with my blog. This donor and his buddies, I feel certain, don't care about the opinions expressed on my blog. But when I get into citizen journalism and report uncomfortable truths that they don't want in the public domain, that's when their whities get tightie.

All of which reminds me of T. Boone Pickens, the oil tycoon whose hedge fund has dried up in the "booming" Bush economy. That caused a huge donation Pickens made to Oklahoma State University to disappear into the good night.

To his credit, Ole Boone doesn't give up easily. He has given another $63 million to Oklahoma State to help finish renovations to the school's football facility--conveniently known as T. Boone Pickens Stadium. Other projects that had been planned are on hold until the economy improves--and T. Boone's wallet recovers.

Interestingly, T. Boone had managed the hedge fund in which his original donation went "poof." OSU suddenly has decided that maybe it would be a good idea if someone other than T. Boone managed the school's athletics money. Hmmm.

Here's something else that is interesting: The UAB donor I suspect of getting me dismissed also has major investments in the oil business. And that makes me wonder if his financial picture has taken a turn for the worse. On top of that, Mr. Big Bucks at UAB recently went through a nasty divorce, and that certainly can put a crimp in the old bottom line.

All of this brings us to an interesting truth about the world of big donations to colleges and universities. Most such gifts come in the form of pledges. When you hear that T. Boone Pickens has "given" $165 million to Oklahoma State's athletics program, that doesn't mean ole T. Boone has actually written a check for that amount. It doesn't mean T. Boone has written a check at all. It means T. Boone plans to give that amount at some point in the future.

Mr. Big Bucks almost certainly has such an arrangement at UAB. The university already is building a facility that is to bear Mr. Big Bucks' family name. But that doesn't mean he's given all the money--or even any of it.

Those kinds of conditions increase the leverage a big donor has over a university.

Here's something else to consider: A big donor might appear to be giving out of the kindness of his heart. But it actually might simply be a shrewd business decision.

Consider a donor who gives to build a health-care facility. What if the donor has a stake in a company that produces equipment for health-care facilities? What if the donor's company just happens to receive a contract for equipping the new building? Double hmmm.

Our good-hearted donor could wind up making more money than he gave. Wouldn't that be a shockeroo, particularly if the donor had Republican leanings?