Disclosing donors could both depress charitable giving and put donors in harm’s way
In March 2016, when George Mason University’s administration announced it would be renaming its law school after late Supreme Court Justice Antonin Scalia in response to a $20 million gift from an anonymous donor, officials knew rough waters were ahead.
Attached to the official announcement was a series of “Frequently Asked Questions” that anticipated the backlash from liberal faculty members and students after naming the law school after America’s preeminent conservative jurist.
Among the FAQs were:
“Who do I speak with to protest this?”
“Why would a liberal institution align with a conservative entity?”
And most importantly:
“How do I file a FOIA (Freedom of Information Act) request on conditions of receiving the money and/or the anonymity of the donor?”
Four years later, the identity of the donor to the Scalia Law School is still a hotly contested issue on campus, with progressives claiming they’re wary of the influence such large contributions buy and conservatives concerned that disclosing donors could both depress charitable giving and put donors in harm’s way.
Earlier this month, the anonymous donor, who conditioned the gift on the renaming of the law school, filed a motion in a Northern Virginia court seeking to prevent the public university from revealing his name, according to The Wall Street Journal.
The donor has suggested that if GMU were to win the lawsuit and make his name public, he would rescind the remaining $16 million left from his gift. (The money is used to fund scholarships and faculty positions on an annual basis.)
The donor has argued that GMU has already violated the terms of the anonymity agreement, having released hundreds of pages of documents to a group known as “UnKoch My Campus.” The $20 million anonymous donation in March 2016 was paired with a $10 million donation from the Charles Koch Foundation.
UnKoch My Campus has stated the documents the school provided them in 2017 and 2019 have revealed the name of the donor, even though they are heavily redacted. The donor’s original contract with GMU required that he be notified of any information requests, but he was not notified of the materials provided to UnKoch My Campus.
The FOIA efforts by progressive groups on campus followed organized opposition by professors on campus, who claimed Scalia had made “numerous public offensive comments about various groups – including people of color, women, and LGBTQ individuals” during his tenure on the court. In April 2016, the faculty passed a resolution by a 21-13 vote expressing “deep concern” about the renaming plan.
Yet at the time, none of the professors in the law school objected to naming the school after Scalia. Scalia’s former colleague, progressive heroine Justice Ruth Bader Ginsburg, hailed naming the school after her friend.
“Justice Scalia was a law teacher, public servant, legal commentator, and jurist nonpareil,” Ginsburg said. “As a colleague who held him in highest esteem and great affection, I miss his bright company and the stimulus he provided, his opinions ever challenging me to meet his best efforts with my own.”
“It is a tribute altogether fitting that George Mason University’s law school will bear his name.”
The name change became official on July 1 of that year.
Since the Citizens United Supreme Court case in 2010, anonymous donations by conservatives to causes seen as political has been a major rallying point for Democrats. Just this week, a COVID-19 relief bill drafted by Democrats in the House of Representatives included a provision requiring any corporation who accepted coronavirus relief funds to report their donors and give a full accounting of their political activities.
Those “political” activities include large anonymous donations to liberal universities to promote conservative political figures.
Yet the debate over whether GMU should release the name of its anonymous donor has some concerned about the effect such a move would have on large donations moving forward.
According to Indiana University Professor Emeritus in Public Affairs and Philanthropy Leslie Lenkowsky, faculty objections are already beginning to chill large anonymous donations.
“I do think it is going to cause donors, and has already caused donors, to be hesitant about gifts to higher ed,” Lenkowsky told The College Fix via phone.
“On the other hand, there’s a lot of money out there, and people who are prepared to give money to good ol’ alma mater,” said Lenkowsky. “You just have to look at the number of colleges and universities that do multi-billion dollar endowment drives.”
If George Mason were to go back on their agreement and name the donor, “that’s not going to be good for their fundraising,” Liz Palla, a partner at American Philanthropic*, told The College Fix.
Palla said it would be “ridiculous” for GMU to name the donor, calling it a “deal-killer for a lot of people.”
“It would certainly give them pause in how they structure these things and manage them going forward,” Palla said. “That would have a significant impact on university fundraising.”
Lenkowsky noted that universities have been structuring their donor programs to allow anonymous gifts while circumventing public records laws.
“Typically, when you give money to a charity, the charity has a constitutional right not to reveal the gift,” said Lenkowsky, noting that during the Civil Rights Era, the U.S. Supreme Court upheld a local NAACP charity’s right to keep its donors private, after Alabama passed a law requiring the names of the donors be disclosed.
In keeping with this precedent, universities long ago created systems of “supporting foundations” for people who want to give gifts anonymously. The donor will give to the charitable foundation, which then gives the gift to the university without disclosing the donor’s name.
In the case of the 2016 Scalia donation, the $20 million was sent to the George Mason University Foundation, which is exempt from disclosure laws, then forwarded anonymously to the university.
“Donors to the non-profit Mason Foundation have a right to anonymity,” wrote the university administration in its FAQ document accompanying the renaming announcement. “It is allowed by the Commonwealth of Virginia.”
In a statement provided to The College Fix, the GMU Foundation noted that their charity has been “appropriately” removed from the complaint currently under review by the Circuit Court of Arlington County.
“Previous court rulings have confirmed the foundation’s status as a private entity and that our donors have certain rights, including privacy, associated with their gifts,” the GMU Foundation told The Fix.
In 2018, a group called Transparent GMU sued the foundation, arguing it is a quasi-public body and should therefore be required to release its donor information.
“Our relationship with the foundation is built on a shared belief in the importance of open inquiry, and all of our gift agreements with our donors, including the Charles Koch Foundation, reflect these values,” said GMU spokesman Michael Sandler at the time. Sandler did not respond to a request from The College Fix to comment for this story.
In December 2019, the Virginia Supreme Court ruled against Transparent GMU and upheld the foundation’s right to keep donor names secret.
Historically, there have been a number of reasons large donors would want to keep their gifts anonymous. Over the years, some of the nation’s largest gifts to universities have been secret donors, such as when Kodak’s George Eastman quietly spent $500 million (in today’s dollars) to transform tiny Boston Tech into powerhouse MIT.
Lenkowsky invoked classical Jewish scholar Moses Maimonides, who created a ladder of charitable giving, from least desirable to most desirable. Maimonides regarded anonymous giving as the second highest rung on the ladder.
Maimonides thought anonymous giving was “pure” in the sense that the giver gets nothing out of the gift – not even public acclaim – and it is less damaging to the recipient, as the donor is not forever tied to the institution. (Maimonides’ highest level of giving is granting an interest-free loan to someone in need.)
Additionally, very wealthy people “are often concerned about their safety,” said Lenkowsky, citing the case of a wealthy Indiana donor whose wife was kidnapped after the extent of his net worth became known.
Donors are also concerned that if their wealth and generosity was known, they would have to spend a lot of time fielding appeals from people looking for a contribution.
Some in the philanthropy business have argued that donor privacy should be a bipartisan issue.
“The NRA doesn’t want its donor list out there, and neither does Planned Parenthood,” said Executive Director of the Alliance for Charitable Excellence Christie Herrera in a phone interview with The Fix.
“We are seeing a lot of left-right groups come together to fight against donor disclosure,” said Herrera, noting that recent opposition to a donor disclosure law in New Jersey came from both the American Civil Liberties Union and Americans for Prosperity, a group funded, in part, by Koch-related charities.
Earlier this month, the New Jersey law was blocked by a federal judge.
*Disclaimer: The SFPA has hired American Philanthropic for fundraising consulting.