October 5, 2017 – Updates

Grant Donors’ Goals Are to Advance Learning


As state governments around the U.S. struggle with weak economies and structural budget crises, funding available to higher education is likely to continue to come under severe pressure. To meet this challenge, public universities across the nation will need to seek new sources of financial support to fill the gap.

Repeated budget cuts have been particularly hard on my alma mater, Florida State University, which this year alone faces another $19 million reduction in funding.

Given the severity of FSU’s cuts, I am concerned about the recent criticism the institution received for accepting a $1.5million grant from the Charles Koch Foundation to explore the nature of free societies. Critics have denounced the agreement as “damaging to academic freedom.” Others have accused FSU of “selling out” to corporate interests.

Nothing could be further from the truth. President Eric Barron deserves credit for defending the details of the grant agreement, which seeks to expand academic freedom, not restrict it. Academic freedom is an individual right, not a collective one. The agreement does not prevent anyone from researching, teaching, learning or expressing an opinion.

But as meetings of the Faculty Senate and Board of Trustees approach, what will FSU do next? The university’s decisions are being watched by many in the donor community, as its choices will have an important impact on willingness to provide financial support. Will the university create an environment hostile to private funding? Or will FSU foster an environment for collaborative partnerships capable of alleviating budget-cut woes?

I am grateful for the high-quality education I received while earning my doctorate with the respected faculty of the Economics Department. It helped prepare me for success as a university professor, the vice chairman of the Federal Reserve’s Board of Governors and a businessman.

I have been a long-time supporter of institutions of higher education, including FSU, and have worked in tandem with the Koch Foundation to support other university programs. As a donor, I consider many aspects when deciding which programs to support. It’s important for me to work with universities committed to making sure the resources provided positively shape the educational experiences of students. Just as scholarship donors enjoy hearing the success stories of recipients, program funders want to understand the direct impact we’re having on helping students achieve their individual educational goals.

It’s for this reason that operational grants are periodically evaluated. The evaluation mechanisms unfairly demonized as “strings” by critics of the Koch Foundation grant actually help both the university and the funder understand where the resources were used and if they were effective. Both parties can better evaluate whether the relationship was productive and the grant should be considered for renewal.

This accountability should be welcomed. Our government’s National Institutes of Health grants awarded to universities for the study of biotechnology and health-sciences research are often renewed annually. Yet no one decries the review process or accuses the government of academic interference when it directs money to be spent on specific research.

Similar productive partnerships exist between public universities and private funders. These partnerships form because universities and donors seek opportunities where their mutual interests meet; both organizations want to make sure the resources help individuals learn.

Consider, for example, a $300 million grant donated from the Walton Family Foundation to the University of Arkansas to establish an honors college and graduate school. It is one of the largest charitable donations ever made to an American public university, and you can rest assured the Waltons are closely involved in monitoring its success. Does their involvement mean the Razorbacks shouldn’t have accepted the funding? Or course not. It is simply the sign of a wise investor tracking the expenditure of his or her dollars.

The relationship between donors and universities is important to both parties. A mutual respect for academic integrity and donor intent is essential in building productive partnerships that advance academic learning. Many donors will be watching Florida State’s next moves. Should we be worried?

Manuel H. Johnson of Vero Beach, is president of Johnson Smick International, an investment and consulting firm.

View the original article in The Orlando Sentinel

This article originally appeared in The Orlando Sentinel June 3, 2011
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