Education Funding

Andover Gift Raises Questions About Accepting Donations

By Michelle Galley — January 29, 2003 5 min read
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A $500,000 gift to a leading private school has triggered a national debate about when it is appropriate to accept donations and when schools should instead politely say, “No thank you.”

The trouble began for the Phillips Academy after it established a scholarship fund in the name of former President George H.W. Bush. Contributors included wealthy admirers of the Andover, Mass., school’s famous alumnus.

But when one such admirer, Prince Alwaleed Bin Talal Bin AbdulAziz Alsaud of Saudi Arabia, sent half a million dollars to the $3.3 million scholarship fund at the school, controversy raged.

Following the Sept. 11, 2001, attacks on New York City and the Pentagon, Prince Alwaleed criticized U.S. policy in the Middle East, leading then-Mayor Rudolph W. Giuliani of New York to reject the prince’s $10 million gift for the victims of those attacks.

If New York City rebuffed Prince Alwaleed’s money, critics wondered, shouldn’t Andover have done so as well?

“I think it is a totally questionable thing for Andover to do—to accept this gift,” Eric Liu, a former policy adviser to President Clinton and one of many critics, said during an appearance on CNN.

Mr. Liu eschewed the notion, however, that the gift had been a bid by the prince to curry favor with the Bush family, as another commentator had suggested. “The idea that an extra $500,000 to a scholarship fund in the president’s name is going to tip the scales somehow is a little bit laughable,” Mr. Liu said.

The elder Mr. Bush knew nothing about the scholarship fund, according to Sharon Britton, the director of communications for Andover. He has not commented on the gift, but a White House spokesman said the current President Bush—also an Andover graduate—believed it was given in good faith, Ms. Britton said. Officials at the 1,100-student Phillips Academy, which has a total endowment in excess of $450 million and charges $28,500 a year for tuition and room and board, believed they acted appropriately in accepting the money last month regardless of Mr. Giuliani’s action.

Prince Alwaleed “made a statement he felt he was free to make, and the mayor was free to return his gift, and that’s what America is all about,” Ms. Britton said.

Broad Guidelines

Guidelines for accepting donations are broad, subjective, and vary from school to school, said Helen Colson, a consultant to independent schools.

In her book Philanthropy at Independent Schools, Ms. Colson outlines principles of good practice for schools to follow when raising money, including: using gifts only for the purposes for which they were intended, allowing donors to make anonymous gifts, disclosing the total amount of donations a school receives, and not accepting gifts in lieu of tuition.

Independent schools, moreover, often decline donations that have strings attached, according to Ms. Colson. “No one wants to accept a gift that changes school policy or procedure,” she said.

Many schools declined to comment on their policies regarding donations. A spokesman for St. Albans School, a prominent private school in Washington, wrote in an e-mail: “Though we do have gift-acceptance policies for all donations received, I’m afraid this is something we’re not in a position to offer insight into.”

Some experts warn of donors who may try to use the good reputation of a school or organization to better their own images.

G. Douglass Alexander, the founder and president of the Atlanta-based philanthropy-consulting firm Alexander, Haas, Martin and Partners, said serious ethical issues arise when a donor expects a lot of publicity for giving money.

“There is really very little philanthropy going on” in such situations, Mr. Alexander said.

Prince Alwaleed, who did not seek publicity for his gift to Andover, has invested heavily in many U.S.-based companies. In 2001, he was ranked the sixth-richest man in the world by Forbes magazine.

Others say it isn’t anyone’s business from whom schools accept money.

“People are free to complain,” said Steven Lee, an ethics professor at Hobart & William Smith Colleges, in Geneva, N.Y. “But there really is no moral basis for their complaint unless the money is morally tainted.” Such money would come from such sources as organized crime, Mr. Lee said.

People throughout the education community apparently are willing, however, to accept money from some donors who have gotten into trouble with the law.

For instance, the Milken Family Foundation, which has given more than $250 million to education-related initiatives since its inception in 1982, was founded by the financier Michael Milken, who served 22 months in prison after pleading guilty in 1990 to five securities and reporting violations and one charge of conspiracy. Education Week is a former recipient of grant money from the foundation.

Such questions aren’t limited to private schools. Public schools also need to be cautious when accepting donations, said Arnold F. Fege, the director of public engagement for the Washington-based Public Education Network.

“The responsibility to fund public schools lies with the taxpayers,” he said. “When money comes from elsewhere, the benefactor must not require a quid pro quo.” Donors to public schools should not, for instance, demand that a specific curriculum be taught, Mr. Fege said.

Public schools need to consider the source of donations carefully, he added. “I wouldn’t accept money,” he said, “from distillers or cigarette companies.”

Schools should establish clear policies about outside funding, Mr. Fege advised, “before they face the pressure of some disingenuous contribution.”

‘No Strings Attached’

In deciding whether to accept a gift, Andover always considers the source, according to Ms. Britton. “You don’t want to take money if you think it is ill-gotten,” she said.

The school refuses money from tobacco companies. Still, it is rare that fund-raisers at the school need to decline an objectionable gift. “Somebody who is interested in exploiting children probably wouldn’t be interested in helping a school,” Ms. Britton said.

School officials have also turned down gifts in the past, Ms. Britton continued, “if someone tried to attach a condition.” She added, “We don’t want to be hamstrung.

“If someone tried to set up a scholarship fund for boys who play tuba and are from Montana, we would try to convince people to take the condition off it, so that we could provide scholarships to the best kids, the brightest kids, and the most deserving kids.”

Prince Alwaleed’s gift, she stressed, “came with no strings attached.”

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