Universities and the Perils of Philanthropy

Universities and the Perils of Philanthropy

Jeffrey Williams: Universities and the Perils of Philanthropy

Can philanthropy be a social ill?

The British university system, like most European universities, has been financed since the Second World War largely through public sources. That is now changing. Of late, public support has been pared down, with the Labour government cutting $1.4 billion last year and the new government cutting $300 million this year. (A report released in May by the European University Association on the ?Impact of the Economic Crisis on European Universities? gives some of the details.)

In place of the lost funds, British universities are actively seeking money from private sources, through philanthropy as well as ?collaboration with business.? A report released in May showed that cash donations hit a record high, approaching $720 million in 2008-09 (that?s not including other kinds of donations). While the drive for donations is familiar in the American system, this is unprecedented in the British system.

The donations only represent a small portion of total funds?less than 5 percent?and the British university had not been on easy street beforehand (it had suffered cuts since the Thatcher regime and seen the institution of student fees, although on a low level compared to those in the United States). But the dependence on private donations augurs a major change in the orientation of British policy. It also provides an example for other European countries, which have likewise experienced increased pressure for private funding. In the case of Latvia, for instance, the IMF and World Bank advised them ?to reduce drastically public funding of higher education.?

These changes probably come as no surprise to anyone watching higher education: they are neoliberalism in action, whereby public services are privatized–in the case of higher education, through greater tuition or pay-as-you go fees, which slide cost from the public to the private individual; increased philanthropy, supplanting the public support of higher ed with private begging; and ?partnerships with business,? breaching the firewall between private, profitable concerns and public education. Gone is the sense of a separate status for higher education.

The steep increase in tuition in the United States over the past thirty years has caused difficulty if not social harm for many people, through the astronomical rise in student work hours and student debt (as I have discussed in recent Dissent articles). And the rise of business partnerships has many problems, some of which are detailed in Jennifer Washburn?s University, Inc. and places like utotherescue.blogspot.com. But philanthropy presents a different case. It seems a social good, or at least a neutral source of income, unlike direct contracts with businesses. What?s the harm?

However, philanthropy is not innocent nor the cure-all that it?s represented to be. It is not without cost, figuratively and in some cases literally. In principle and practice, it turns the orientation of the university toward fundraising. It creates a huge new administrative bureaucracy in ?Advancement? and ?Development? offices, detached from the educational mission of the university. It pushes schools toward pursuits or fields that might garner donations, rather than fields that traditionally foster higher education. Overall, it permeates the ethos of colleges, departments, and even faculty, rewarding those who keep an eye out for donations.

Those are the soft influences; there is also a harder side, sometimes literally entailing mandated programs and curriculum. One example in the United States is a 2008 gift from the BB&T Charitable Foundation to UNC-Charlotte and other colleges in North Carolina that required that Ayn Rand?s Atlas Shrugged be assigned reading for a course and faculty ?have a positive interest in and be well versed in Objectivism.?

Most universities eschew such direct conditions on donations, but grants effect control in vague but pervasive ways. They shift the gravitational field of a school toward programs or buildings dictated by the interests of their donors. For instance, at Carnegie Mellon, where I teach, the new Gates Center weights the table toward computing rather than, say, the humanities. Though some complain that the classics aren?t taught enough, the buildings on most campuses tell the real story of which fields are valued, which not, and who controls them.

When we think of donors, we think perhaps of a wealthy octogenarian making an individual gift, but a sizable portion of philanthropy now occurs through foundations and corporations. Some business commentators have called the new strategic orientation toward giving ?venture philanthropy.? That is, they don?t just give a lump sum for general funds but direct it toward programs that develop their initiatives. This has occurred with a consortium of billionaires who have pushed for the privatization of public grade-school education. They control the sightlines of policy and eventual practice through their giving. It is the practice of an oligarchy: it is a rich, extra-governmental group that exerts control on the governing policies and practices of a state.

Philanthropy can also be undemocratic in another way. Since it is tax-deductible, philanthropy removes money from the tax base and redirects it toward private rather than public interests. A $100 million bequest seems generous, but it siphons inheritance taxes away from public coffers and controls exactly where the money goes instead. It can become a loophole to skirt democratic decisions.

This is not to condemn philanthropy altogether but to distinguish its uses. It is currently being used as a placebo to gloss over the withdrawal of public support for higher education. At worst, it sometimes is used to circumvent public bodies and decision-making, usurping democratic power. The turn to philanthropy represents a rewriting of the social contract, away from social democratic principles to principles of the market, where the richest take control. Both the funding and the decision-making of education should be public. That British and other European universities are turning away from their social democratic principles is not a good sign for democratic education. Public sources entail public accountability; private sources do not.

Socialist thought provides us with an imaginative and moral horizon.

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