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Thoughts on proposed changes to Grinnell’s gift policy

Recently, some alumni and faculty members have been advocating for a change to Grinnell’s Gift Acceptance Policy. It appears that the concerns stem, in no small part, from their frustration with Grinnell’s willingness to accept gifts from a local couple, one of whom has a leadership role in the NRA. The Trustees have distributed a draft update to our gift policy and may be voting on it at their February meeting. I consider that vote a bad idea, at least at this time. Since there’s an open forum to discuss the issue, I’m writing this musing to get my thoughts together [1].

From my perspective, there are two key reasons not to pass the policy We do not currently have a permanent VP for Development in office, and, until we do, we should not pass any significant changes to development policy. In addition, a policy must be accompanied by associated practices. The development of those practices and the consideration of their implications really belongs in the hands of the VP for development.

Let’s consider the primary suggested change to the policy [2].

Gifts may be accepted from both individual and organizational donors. Organizational donors include partnerships, corporations, foundations, government agencies, or other entities. Grinnell College reserves the right to deny any gift from any donor. The source of funds may be a factor when determining whether Grinnell College should accept or decline a gift. This may be easier to discern when the funds are gifted from an organization rather than an individual donor. The ultimate authority and discretion in accepting or denying gifts lies [3] with the president and the Board of Trustees. [4]

It sounds reasonable, right? But then we get to the details of implementation. First, and most importantly, at what gift level does this policy trigger? Do we want to do a background check on every gift of $1000? $10,000? $100,00 [5]? And how much time and effort do we have to spend on those checks?

It’s not a trivial question. The people who accept most gifts are typically front-line staff and really should have guidelines. If we set the amount low, we’ll be doing a lot of checks and the president and Board of Trustees will have to review a lot of gifts. And, as far as I can tell, those who advocated for the policy want a fairly low limit. I would venture to guess that the gifts from the local couple are generally around the $10,000 level [6], which the current policy classifies as marginal risk to the College. If the policy has to incorporate them, we need to decrease the cutoff for moderate risk. If we make $5,000, rather than $10,000, the cutoff between marginal risk and moderate risk, it likely doubles the number of cases to consider, which affects the work of the office [7].

But the thing I really want a VP for development to weigh in on is the indirect effects of such a policy. Suppose we refuse a gift from the local citizens who are the target of this whole effort. What effect will that have on gifts from other people in town, many of whom greatly respect that couple? I expect that some will say If the College won’t accept gifts from this couple, I’m not going to give either. [8]

I also expect that there are other indirect effects. Consider a donor with multiple giving options. I can give to Grinnell or I can give to X. I hear that Grinnell now does background checks to see if donors aremoral" enough to donate to Grinnell. I don’t want to go through that process. I’ll give to X instead."

The recommendations I saw from the concerned alumni heighten my worries. In particular, they recommend that

6. If a gift is accepted, the College should be certain to highlight in its statement about the gifts the nature of the source of funds. A gift from [the owner of a firearms retailer] should highlight the role played by guns in ending the lives of 35,000 individuals annually.

Wow! That will have a chilling effect. Let’s see … that policy would mean that a gift from the Noyce family would have to highlight the recent issues with the Intel chip, a gift from any of our alumni on Wall Street would have to highlight how their firms have helped great greater income inequality, a gift from one of the tech firms would have to discuss the ways in which the tech industry has also increased global inequality and reduced privacy, and so on and so forth. If you’re going to say negative things about donors, I’m pretty sure that they’re not going to give. And yes, I realize that’s the point of that suggestion. But there are very few sources of large donations that are not tainted in some way. Perhaps these alumni think Grinnell already has enough money. They are wrong [9].

More broadly, I worry that this feels like a bit of a witch hunt. I’ve heard some say that we should not accept from the local donors because one of the also gives to Steve King [10]. The recommendations begin with In making decisions about whether or not to accept a gift, the College should take into account whether an individual is a leader in an organization whose values differ greatly from the values of the College [11]. That attitude is my other significant concern about the policy and the whole situation. If we had the policy in place in the 1950’s, would we follow the inclinations of the Senator from the state north of us and choose to refuse donations from those who are friends with communists or who had socialist tendencies? The You’re not moral enough to give to Grinnell attitude worries me. I’ve also seen too many cases in which the intentions that are in effect when a policy goes into play are not the ones that are in play when the policy is interpreted a decade [12] later.

I am also surprised that the writers don’t seem to understand the goals and aspirations of large donors [14]. They suggest that we include the following principle: Grinnell College seeks to accept gifts which are not intended to influence College policy or to imply that such influence has or is occurring [15]. But isn’t that why people give big gifts? To influence the College in certain ways and to be acknowledged for those changes. The Finkleman’s generous gift towards Careers, Life, and Service was intended to influence the College to think more carefully about how we support students’ career aspirations. The Kahn’s equally generous gift to support students as they deal with the expense of job searches also influences the way the College acts. In my opinion [16], those are incredibly positive influences on the College and how we act. And I know that our Office of Development and Alumni Relations reflects carefully about large donations and discusses them with appropriate people on campus, including administrators and Council. They do say no. So why add further restrictions?

I certainly don’t want to claim that we should accept gifts from everyone. Gifts that affect policy need consideration, and neither immediate rejection or immediate acceptance. In cases where naming is involved, such as buildings, rooms, and professorships, we should consider the effect on the College’s reputation. But we already do that.

A morals clause in a gift policy is an incredibly complex issue and, because it’s a complex issue, it needs careful consideration of the effects of a new policy (and the failure to pass such a policy). Any policy also needs to accompanied by a clear set of associated practices.

I therefore urge our trustees to table the vote on this policy until we have a clear set of associated practices and we’ve done a thorough analysis of the likely effect of those practices (and the failure to enact those practices) on our ability to fundraise. I expect that either of those requirements will be difficult to achieve until we have a VP for Development in office.

Now I have to figure out how to edit this down to a letter that I can send to the President and BoT.

[1] I drafted the musing before the meeting. I updated it the evening after the meeting.

[2] There are two other wording changes that are not as significant.

[3] Grammarly thinks that should be lie. Since authority and discretion is a compound subject, Grammarly may be right.

[4] Electronic mail from President Kington entitled Special Campus Memo: Gift Acceptance Policy - proposed changes and dated 7 December 2017.

[5] We should probably do some careful analysis of a $100K gift.

[6] Yes, that’s right. You can make a big difference with a donation of $10,000. That much should pay for one or two weekends (or more) of Project Ignite, which impacts large numbers of young people. It would certainly cover two weeks of our summer code camp (assuming that I don’t charge for my labor). It would more than cover ten students’ ability to fly out for graduate school or job interviews, changing each of their lives.

[7] Since the new policy suggests that the President and Board may have to weigh in on these moral issues, how much does it affect their workload and their ability to spend time and effort on other issues facing the College?

[8] In today’s discussion, one of the alumni raised the issue of If the College continues to allow certain folks to donate, I’m sure some alumni will stop donating. That is certainly a reasonable response. I’d like someone to analyze the risks of both adding the policy and not adding the policy.

[9] The new 1.4% tax on endowment income will have some effect. But, even without that, the long-term predictions for our endowment suggest that, without more donations, we will reach a point where we will either have to give up need-blind admissions of domestic students or make some severe cuts to the program. Donations also help us move in new directions or support needed resources.

[10] One of the two may give to Steve King, but I’m pretty sure that there’s no way on earth that the other would ever give to Steve King.

[11] Grinnell College Concerned Alumni (January 23, 2018). Outline of Recommendations for Grinnell College Gift Acceptance Policy. Final set of recommendations will be sent to the Trustees by January 26. Document distributed at an open meeting of 23 January 2018.

[12] Or even a year.

[14] Or even moderate level donors.

[15] See earlier footnote on the recommendations from Concerned Alumni for the citation.

[16] And, I expect, of the senior administrators and faculty who worked on obtaining those gifts. And students also really appreciate these new programs.

Version 1.0 of 2018-01-23.