Prestigious universities are learning the costs of the big gifts they receive from prominent donors.
The strings that fund managers Bill Ackman and Ross Stevens attached to sizable donations to Harvard University and the University of Pennsylvania, respectively, show the degree to which wealthy benefactors expect to have an ongoing say in administrative matters.
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Today, the world of major university donations was brought to light after famous investor Bill Ackman publicly criticized Harvard University for its refusal to accept his stock gift. The back and forth between Ackman and Harvard has gained national attention and highlighted the misunderstood nature of such financial donations.
Bill Ackman, founder of Pershing Square Capital Management and alumnus of Harvard Business School, sought to donate an estimated $25 million worth of Pershing Square Holdings Ltd shares to Harvard. Ackman suggested this donation to increase the liquidity his fund has outside the United States. Harvard rejected Ackman’s offer due to restrictions around foreign stocks and agreed to accept philanthropic donations of cash only.
This chain of events raised awareness about the intricate process in which university’s accept donations. Specifically, it shed light on the management practices associated with such donations. Although some donations require only a simple acceptance, many gifts have complex agreements and stipulations that universities must read over closely. In this case, additionally, Harvard had to consider the mixture of international elements placed into the donation equation.
Ultimately, although Ackman and Harvard did not reach an agreement, the investor has used this recent situation as a platform to discuss broader implications his effort could bring. He wants bigger universities to alter their donation rules and be more lenient in their acceptance criteria. His overall goal is to make donating a more stimulating process that interests more people to participate in giving.
Harvard responded to the recent uproar through a statement and a spokesperson expressed the university’s gratitude for the gift-giving intentions. In the statement, Harvard University noted “Gifts of the magnitude of Mr. Ackman’s proposed donation can profoundly improve the world and our work in some of the most important areas of endeavor”. Hopefully, this statement will mark the first steps in helping universities make donating a simpler process.
It is clear that Bill Ackman’s clash with Harvard has shed light on a messy, yet essential process: Campus Donations. When faced with difficult decisions about potential gifts, universities must carry out their institutional responsibility of responsibly managing the donations for the benefit of its students and faculty. The availability and willingness to accept such gifts is instrumental for universities to create achievable and successful goals for the future.
