A Cut of the Profits Is One Thing, But a Cut of the Charitable Giving…?

A Cut of the Profits Is
One Thing, But a Cut of the Charitable Giving…?


Leonard Zwelling

         On the front page of the NY Times on February 6 is a story
by Nicholas Confessore about Mary Pat Bonner, a woman who raises funds for
liberal candidates by funneling money from big donors to Political Action
Committees while keeping 12.5% for herself. Some donors claim they are unaware
that a percentage of their gift is being siphoned by the Bonner Group. Many other
fundraisers (e.g., the Koch brothers) have their own salaried staff members who
are not incentivized in the fashion that Bonner Group personnel are. Many
donors are not at all happy about learning that a portion of their gift goes to
a middle woman. A flat retainer is a more common method of having the PACs pay these fundraisers,
and is much less controversial.

         The same thing happens in academia all the time. The
President of an institution, who often is the most highly paid member of the
university staff not coaching a team sport, and whose major role for which he
is so well compensated is raising money, may keep 10-15% or more of the donated
money he is already paid to raise for use in his or her discretionary fashion. This can
be true even if the donated funds were secured by a faculty member or the
Development Office without any effort on the part of the President. The President
can than shift those funds to his or her pet projects having nothing whatever
to do with the desired goals of the donor.

I don’t see the difference between the world of big-time PACs and the world of
big-time academia.

         Whether giving to a political candidate or to an institution
of higher learning and/or to its organ of patient care, most donors expect the
vast majority of their gift funds to be used for the purpose they gave them,
consistent with the mission of the institution without passing any
discretionary power to an inside official. Yet, in both worlds, that is not
what happens.

         I am not sure that this passes the smell test are you?

percent of donor money to MD Anderson does the President skim and for what does
he use it?

would say that this is overhead. If that is so, it should be co-mingled with
the federal overhead dollars (indirect grant dollars) or those indirects from
industry contracts and should be solely used for infrastructure like utilities
or secretary salaries. Somehow I don’t think that is what happens.

faculty of Anderson, whose labors really are the generators of the largess of
the wealthy, ought to get an annual report of how much money was withheld from
any donations by the President and exactly what he used it to do. If the
argument against this is that at MD Anderson, it’s all one pot of money, then
have the financial people stop keeping score by departments, the operations
people stop counting patients coming through the different clinics, and the
bureaucrats stop trying to incentivize academic or clinical care activities.
After all, it’s all one pot of money to Make Cancer History, right?

Well, that may be history, too.

1 thought on “A Cut of the Profits Is One Thing, But a Cut of the Charitable Giving…?”

  1. From Brother Raph Pollock at Ohio State (OSU):

    OSU has a different system entirely. All funds donated are placed in an interest bearing account. After six months of encumbrance, 100 percent of the corpus is given to the individual faculty member and the interest goes to the Development Office and this comprises their total budget–they get no other operational funds from anywhere else and we raise about 150-200M annually. The Development Office is tightly allied with the faculty as a result.

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