EDUCATION / ETHICAL DILEMMAS : Money and Morality: Study of Colleges’ Fund Raising Set

Should American University in Washington, D.C., have named its sports arena after Saudi businessman and arms dealer Adnan Khashoggi in exchange for what critics described as $5 million in dirty money? Should Harvard’s Kennedy School of Government have dangled fancy university titles before a wealthy couple in possible exchange for a $500,000 donation? Should Cal State San Marcos have first accepted, and then rejected, $250,000 for a geology professorship with a proviso that the donor’s controversial theories about Earth science be studied?

Those uncomfortable questions about fund raising in higher education have generated much controversy. And, experts say, similar issues will arise more frequently in the future as colleges and universities feel pressure to raise ever bigger and bigger bucks.

ANSWERS SOUGHT: That’s why a landmark study of ethics in college philanthropy is being started this month by Dartmouth College and the Council for Advancement and Support of Education, a national organization for college fund-raisers and publicists. Study organizers want schools and donors to examine relationships with each other, even if that strains friendships and cuts endowments.

“Being moral sometimes hurts. It sometimes means turning down a gift,” said Deni Elliott, a Dartmouth philosophy teacher and Ethics Institute director who is the head of the study.

The goal is not a rigid code of ethics, she said, but a book of examples providing general guidance to such questions as: Should there be any strings attached to any gift? Should donations have any influence on students’ admission? When does cultivation of a donor become dishonest manipulation? Does the source matter if the money does good?

“It’s not that they’re sleazy. But I’d like people in development offices in colleges and universities around the country to talk about these issues . . . in a way that they recognize the morally relevant issues,” Elliott said.

The bruising competition for dollars among both private and state universities makes the inquiry timely, according to James Donahue, a Georgetown University theology professor who is the council’s consultant on the study. “There is a pull now. The tighter the resources become, the more willing you may be to stretch the ethical standards a bit.”

Georgetown was embroiled in such a situation a few years ago when it took $600,000 from Libya to endow a professorship in Arab studies. After criticism about Libya’s links to international terrorism, Georgetown returned the money, plus interest.

American University kept Khashoggi’s money and his name on the sports center despite embarrassment over his role in the Iran-Contra scandal and his trial for alleged fraud in connection with former Philippine First Lady Imelda Marcos. Both were acquitted.

At Harvard, a Kennedy School dean proposed giving titles of “Officer of the University” to a Texas couple willing to donate $500,000. After word leaked out, administrators called the proposal a mistake. The donation was never made.

UNFAIR ADVANTAGE?: In some other cases, questions have been raised about taking advantage of donors. For example, in 1988, a wealthy woman left large sums of money to both St. Mary’s College in Minnesota and to a former fund-raiser for the college. The fund-raiser said he was entitled to his share of the money because he was a friend of the woman and he had left the school a year before.

However, the college was furious, alleging that a professional contact was abused for personal advantage.

“Colleges have a special responsibility to be above question whenever possible and to have higher standards than other industries,” Elliott of Dartmouth said. “We look to them as models of what the best and brightest think and do.”

The study is to be funded with $320,000 from the W. K. Kellogg Foundation and the Lilly Endowment. Officials said there are no strings attached.