From: Issue 40

Donor Dollars

17 September, 2012

Philanthropists are trying to influence how their money is being spent at Canadian universities. Is this a boon for innovation and collaboration, or a threat to free inquiry?

Written by Jeremy Runnalls, Managing Editor

The program looked like a perfect fit for the university. Calgary petroleum magnate Clayton H. Riddell, at the urging of former federal Reform Party leader Preston Manning, was offering to donate $15 million for Carleton University to set up a school in political management. The largest donation in the school’s history quickly received enthusiastic backing from university chancellor Herb Gray, a former longtime Liberal MP, and the school opened in 2010. Yet the governance structure was kept under wraps, with Carleton battling freedom of information requests for more than a year before finally acquiescing this June in the face of privacy commissioner arbitration. What was discovered is becoming an increasingly common phenomenon: philanthropic donations to post-secondary institutions that allow donor influence over the program’s budget, academic hiring and curriculum, in this case through a steering committee majority-appointed by the Riddell Foundation.

The university quickly announced in July that the agreement it itself had agreed to did not fully reflect Carleton’s policies and procedures on staff selection and budget allocations and was being renegotiated. It pointed out that “donor participation at Carleton is not unusual, but there is a difference between participation and decision-making and it’s an important distinction.” Where does that distinction lie? Is it possible for Canadian universities to find that middle ground in public-private partnerships without compromising academic freedom?

Up until 20 years ago, large-scale philanthropic donations to Canadian academic institutions were unusual. In fact, the first business school in Canada to be named after a donor occurred in 1995, when the Richard Ivey family donated $11 million to the University of Western Ontario. Today, 18 business schools have changed their names to reward large-scale donors.

Ken Wyman, program co-ordinator in the post-graduate fundraising and volunteer management program at Humber College, believes that federal and provincial tax changes in the 1990s encouraged private gift-giving to post-secondary institutions, including various provincial matching grants for funds raised privately by universities. Between 1997 and 2007, according to Statistics Canada, philanthropic activity as a source of revenue grew at an average rate of 11 per cent per year. As schools expanded their fundraising departments, large donors began to command a greater share of attention. In 2007, the head of fundraising at the University of Ottawa, David Mitchell, foreshadowed the increasing importance of philanthropy in an interview with the Globe and Mail. “It’s become a permanent feature of how universities do their job. The machinery of fundraising has come of age at universities in the last generation. I don’t think it is about to end.”

Financial pressures stemming from the economic downturn have resulted in university funding being capped or cut at the federal and provincial level, pushing universities to court large donors more openly. Although thousands of donations are made every year with little or no restrictions involved, philanthropists understand that increasing financial constraints are forcing universities to consider different forms of donor involvement on academic decision-making and hiring decisions. The funding of endowed chairs and the establishment of institutes, large-scale scholarship programs, research programs and new buildings have all resulted from these agreements over the past five years, with 16 to 18 of these agreements now in place across the country. With substantial public funds supplementing these donations, the private funding of programs and schools has developed into an increasingly contentious battle over academic freedom.

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