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  • Writer's pictureJay Frost

Beating Up The Benefactors

Since the financial meltdown in 2008, philanthropists have become a frequent piñata for pundits and public alike.

First it was the soft criticism that high-income earners are not generous enough.  Now their giving is described as bad for society as well.  What’s a wealthy person to do?

In an article based on their forthcoming book, “The Trouble with Billionaires: Why Too Much Money At The Top Is Bad For Everyone,” authors Linda McQuaig and Neil Brooks take aim not just at rich people generally but benefactors to universities specifically.  It is more than the fear that major donors might influence curriculum—a charge any university would flatly deny—but that the very act of placing the donor’s name on a wall constitutes some kind of erosion of academic integrity and educational mission.

In making their case, the authors quote University of Toronto Professor Paul Hamel, who has as yet unsuccessfully advocated for naming a building on campus for an important and cherished Canadian non-donor, that “the priorities of the university have been skewed towards areas that interest the elites…rather than towards the priorities of faculty, staff and students who are engaged in critical analysis, research and teaching.”

This assumes both that financially successful alumni are completely out of tune with the needs and interests of their alma mater and that the donors control the entire process, forcing a university to take a gift to do something that is not in its own interest.

This is a fundamental misunderstanding of the way philanthropy works since most large scale giving is the result of long-term cultivation and solicitation by the organization and not some kind of educational takeover by the donor.

McQuaig and Brooks do provide an interesting analysis of a $35 million donation from Peter Munk to the University of Toronto in an effort to argue that contributions of this size are not really “philanthropic” at all.  They point out that the tax deduction this gift afforded, together with the public monies it leveraged, gave Mr. Munk maximum credit (i.e. his name on a building) for an amount that actually “cost” him just a fraction of the total project amount. “This should be treated for what it is,” they write, “not a gift to the community, but rather a business transaction purchasing that most treasured of items — a personal legacy.”

But here is the problem with that logic.  If Mr. Munk or some other wealthy individual, foundation or corporation had not made the donation, then the new school of global affairs which bears his name would either have been funded by the government at far greater expense to the public or not established at all.


These types of “lead” gifts help to capture the imagination and interest of other donors with more modest financial resources and encourage them to support the project at hand.  The gift, in effect, makes the program more real to the broader community and therefore more likely to garner their support. 

Conversely, the absence of such a contribution can suggest a dearth of support among community leaders. The reality is that names on buildings, the core of what seems to offend those who distrust philanthropy as a vehicle for public good, are at the very end of a process.  Cultivation of relationships with individuals who make large contributions usually begins far before they have amassed their fortunes.

More fundamentally, there are only so many rich people in the world who can fund the construction of buildings or endow new programs.  Most donors, who are also recognized for their contributions—perhaps in an annual report, at a public event or on a donor wall—give small but precious amounts.  They too support activities and programs governments cannot or will not fund completely if at all.  They also benefit from tax deductions for their charitable gifts.  Many of these same individuals would love to give more and perhaps have their own family’s name recognized more publicly if they had the resources to do so.

Would the authors suggest that someone giving hundreds of dollars not be recognized?  Or is it only recognition of donations by wealthy contributors that is so offensive? 

Perhaps it is really the very existence of personal fortunes in a time of financial hardship for so many that is at the core of the backlash against philanthropy in all its forms. But naming buildings is about more than tax deductions and family legacies.  For every student today who walks through a building named for some long forgotten alumnus, it is a suggestion of what is possible for them and an inspiration for someday giving back to make that same educational experience possible for those who follow in their footsteps.

(Originally published by DonorPerfect in the Fundraising Sherpa Blog.)

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