Earlier this year, following the passage of the Donor Intent Protection Act in Kansas, Philanthropy Roundtable launched a monthly series on donor intent controversies around the country to better inform those who care about this important topic. We continue to follow pending lawsuits involving Middlebury College and the former Hastings College of the Law, and we will inform readers when there are updates about those institutions.
Most cases discussed this year have involved gifts to colleges and universities, and that focus has increased since the October 7 Hamas attacks on Israel and the campus turmoil that followed. The voices of angry donors – Jewish and non-Jewish alike – were amplified by the poor performance of three university presidents in a Congressional hearing, resulting in the resignation of one president and the public shaming of another.
We are now seeing signs of a backlash from faculty and others resisting what they consider “reform by blackmail” and questioning the relationship between donors and the institutions they support. This month’s Donor Intent Watch addresses that relationship and reminds readers that small donors are also frustrated when they feel their values are being ignored or their wishes deliberately violated.
We encourage donors to contact us with any questions they have 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 that we may have missed.
Ross Stevens and The University of Pennsylvania
Among the major donors whose dissatisfaction with their alma maters or other higher education grantees led to public announcements canceling financial support is Ross Stevens, founder and CEO of Stone Ridge Asset Management and alumnus of the University of Pennsylvania’s Wharton School. In 2017, Stevens made a gift to Wharton in the form of limited partnership units in Stone Ridge to support the Stevens Center for Innovation in Finance.
On December 7, following Penn president Liz Magill’s widely criticized testimony before a Congressional committee, Stevens informed his Stone Ridge employees he would rescind Wharton’s shares – now valued at $100 million – unless there was a “change in values and leadership at Penn in the very near future.”
Stevens’ threat – like those of other prominent university donors – has caused consternation among observers who worry wealthy donors are inappropriately interfering with the operations and governance of their grantees. What is noteworthy about Ross Stevens, however, is the atypical nature of his gift and its potential repercussions for his company and employees. As his lawyers noted in a separate letter, “[Penn’s] permissive approach to hate speech calling for violence against Jews and laissez faire attitude toward harassment and discrimination against Jewish students would violate any policies or rules that prohibit harassment and discrimination based on religion, including those of Stone Ridge.”
Small Donors and Higher Education Institutions
In the wake of the current “donor revolt” among the wealthy benefactors of many of the nation’s elite colleges, fundraisers worry dissatisfaction may spread to smaller donors and less wealthy institutions. Given the decline in overall middle-class giving and the steady drop in the number of American households making charitable gifts each year, this is not an unreasonable concern. At Princeton, for example, total giving continues to increase, but the number of donors is shrinking. Fewer alumni are participating in the annual fund where smaller gifts typically provide the unrestricted support that all charitable organizations value. The current negative publicity about some of the nation’s most esteemed colleges and universities is not likely to have a positive impact on these trends.
Donor intent disputes can also be discouraging even when – or perhaps especially when – they involve relatively small amounts of money. In our policy primer on donor intent, Jack Salmon tells this story:
An example of a smaller dollar donor whose intent was disregarded is that of Carol Bratton. Bratton worked as an administration assistant to the dean of the Logsdon School of Theology at Hardin-Simmons University. Her late husband also worked at the university as associate vice president of information technology. After her husband passed, she decided to honor his memory by donating to their longtime employer. In 2008, she made a $5,000 gift, and after another five years she had saved enough to gift $10,000—the minimum required to establish an endowment at Hardin-Simmons.
Carol Bratton’s agreement stipulated that if the Doctor of Ministry program should cease to exist, then the dean of Logsdon would have discretion to award the funds to benefit seminary students. In 2020, Bratton received an email informing her that the Logsdon seminary was being closed, and her scholarship would be eliminated. There is no way Hardin-Simmons can now uphold the intent of Bratton’s gift. When she requested the gift be returned to her, the university’s vice president for advancement laughed, and told her it would never happen.
Despite the many differences in their situations, Ross Stevens and Carol Bratton share the experience of donor regret, both disappointed in a university they had once respected and had honored with a gift that carried considerable personal meaning. We may well be in a watershed moment for higher education philanthropy, and we encourage donors who want to continue their support for colleges and universities to approach their giving with care and seek advice along the way. Consult our recently published “Top Ten Tips for Higher Education Funders” and please reach out if our Philanthropy Roundtable team can be of assistance.