The Chronicle of Higher Education: From the issue dated October 18, 1989
TRIUMPH TURNS INTO 'FIASCO'
U. of Utah's Loss of $15-Million Gift Illustrates Delicate Balance Needed in Recognizing Donors
By Peter Monaghan
The surprising withdrawal last month of a $15-million gift to the University of Utah has been the talk of university and college fund raisers in recent weeks. What looked like a triumph for Utah a few months ago turned into a fund-raising fiasco, and college officials elsewhere are asking what lessons the incident has for them.
In June, James LeVoy Sorenson, a medical-products entrepreneur who is believed to be the wealthiest person in Utah, gave the university its largest gift ever, an event campus officials described as "joyous." But when controversy erupted during the summer over naming the medical school for him, Mr. Sorenson asked the university to return his gift. In a letter to President Chase N. Peterson, Mr. Sorenson wrote sarcastically that his gift, which had been six years in the making, seemed "too much for the University of Utah to handle."
Development officers at institutions around the country say the incident was extraordinary and, for the University of Utah, as spectacular a letdown in fund raising as the reception accorded to its claims that a scientist there had achieved room-temperature fusion.
While unusual, the problems that Utah fund raisers experienced illustrate some of the difficulties that can crop up when colleges and universities attempt to offer donors recognition for their gifts. Naming, or renaming, a school or a building can be a controversial event on a campus, and what seems like a windfall for a college can prove to be a stroke of bad luck. Protests can arise over the donor's background and his or her association with the university, as well as over the amount of faculty and staff involvement in the decision. Sometimes clashes are possible when donors believe they have not been honored properly.
Despite the sensitive nature of building- or school-naming arrangements, institutions do not always have adequate policies to deal with such events, some college fund raisers say. "Donor recognition is an art, not a science, and we've all made mistakes," says William McGoldrick, vice-president for institute relations at Rensselaer Polytechnic Institute. The trick, he says, is "to give public recognition in such a way that you please the individual without compromising the institution."
Officials at the University of Utah thought they had done just that. Mr. Sorenson, a long-serving member of the university's hospital board, donated 250,000 shares of stock, worth more than $15-million, that he had acquired in Abbott Laboratories, a medical-products company. Utah officials announced they would change the name of their hospital and medical school from the University of Utah School of Medicine and Medical Center to the J. L. Sorenson School of Medicine at the University of Utah. The announcement prompted about 300 faculty members and students in the medical school to protest, claiming that the change threatened the school's name recognition and, therefore, its reputation. Faculty members argued they should have been consulted. Hundreds more faculty members, students, alumni, and donors, along with several state legislators, joined the protest.
President Peterson attempted to negotiate an amicable settlement. He offered to establish and name for Mr. Sorenson an institute of medical research and several endowed chairs in the medical school. Mr. Sorenson bluntly declined, saying the university wasn't holding up its end of the bargain.
He wrote to Mr. Peterson: "It seems to me that the University's desire in recent weeks has been more to avoid controversy than to find appropriate uses for my endowment."
Spokesmen for the university and Mr. Peterson have expressed regret over the collapse of the gift. "Between Mr. Sorenson and Chase Peterson," said J. Michael Mattsson, the university's vice-president for university relations, "there is an understanding of what happened and why, and there is a feeling of sadness on the part of both."
What happened, Mr. Mattsson says, is that university officials failed to recognize the extent of misgivings over renaming the school that were voiced during consultations with the university's capital-campaign leaders, department chairmen in the medical school, and even other donors. Consultations, he says, "were not broad enough, and not deep enough, although we thought they were at the time."
"It's a delicate thing," he adds, "because when you're negotiating a gift with an individual, and you're discussing ways that person may be recognized, you're not able to take a vote among the students and the faculty. Decisions have to be made."
Still, Mr. Mattsson insists that much of the protest's fervor was fueled by misinformation that spread quickly on campus. One rumor, for example, held that Mr. Sorenson had demanded, and had been granted, veto authority over faculty appointments. Of that, Mr. Mattsson says: "That's ludicrous." Another rumor, that graduates' diplomas would no longer display the university's name, also was unfounded, he says.
Most campuses, the University of Utah included, try to minimize problems by adopting ground rules for the recognition they will give to donors. Institutions commonly require that trustees or state boards of higher education approve naming decisions, and that academic officers be consulted, too. Mr. Mattsson says Utah's guidelines did not directly address the naming of schools, and will probably be revised to cover all possibilities.
Most colleges will not name a new building after a benefactor unless the donation is at least 50 per cent of the construction cost. That depends, however, on how much money the institution thinks it will be able to raise for that building, or for any building. The University of Miami, for instance, asks that gifts cover all construction costs, plus 25 per cent of maintenance costs.
Fund raisers say good policy includes deciding in advance what will be named for donors -- buildings, classrooms, seats in them, and fountains outside; endowed professorships and other "people-oriented" items like scholarships, financial-aid packages, research funds, and library funds. At the upper limit, will a school be renamed? Will the whole university?
Naming a school, says Ronald D. Vanden Dorpel, vice-president for development at Northwestern University, is an important decision to which "very few universities have given serious thought."
Northwestern has named schools of journalism, business management, and engineering for donors. It has attempted to name them carefully, Mr. Vanden Dorpel says, because a name with clout can "ratchet a school up in reputation" and serve as a rallying point for donor, faculty, and student recruitment.
Another issue for colleges is the donor's personal reputation or background. Colleges should be very selective about what kind of donors they approach, says John R. Miltner, vice-chancellor for university advancement at the University of California at Irvine and a former president of the National Society of Fund Raising Executives. "You really ought to concentrate your fund-raising attention on names you want associated with your campus for a long period of time," he suggests.
Whether a donor possesses the right cachet is, of course, a judgment call. At the University of Utah, protesters said Mr. Sorenson lacked it, richest Utahan or not.
Even when institutions take special care in arranging to name things for donors, problems can develop. At the University of Washington, officials have grappled with the association of a donor with the university and the amount of attention given to him. Depending on one's point of view, the university has either given the donor too much recognition, or not enough.
In 1976 the university agreed to name the running track at its stadium for a donor, Cornelius C. Chavelle, who had promised a relatively modest gift of $166,400. Campus officials named the track, then put Mr. Chavelle's name on a large events board visible from the much-traveled road outside.
The latter action, officials later decided, exceeded the requirements of its agreement, so they left Mr. Chavelle's name off a new, electronic board erected in 1987. Mr. Chavelle's estate objected, however, and has sued the university for breaching the terms of the gift (The Chronicle, October 4).
The gift had already proved troublesome to the university. First Mr. Chavelle, who was briefly a county judge, became embroiled in a personal scandal. Then, when he died in 1977, the university had to sue his estate to obtain installments of his donation that he had not paid when alive, nor mentioned in his will.
University officials now say that even large donations to their campus are not marked by large signs. A new library addition, named to honor a $10-million gift, for example, is to have a sign consistent with others on the campus, and much smaller than the one Mr. Chavelle originally enjoyed.
Privately, university officials describe the dispute as a product of inexperience. Since the controversy arose, they have tried to insure that signs honoring donors are handled thoughtfully and tastefully.
Some universities take great pains to avoid offending a donor. One challenge is renaming a building already named for a previous donor. Many fund raisers, because they consider previous memorializations inviolate, don't even try, and instead scour their campuses for facilities with names like "Old South," or no name at all.
Many others resort to piggy-backing one name onto another. A variation of this occurred recently at Northwestern University. The Robert R. McCormick Charitable Trust gave the university $30-million to rebuild a vast engineering complex that had been built in 1939 with another big gift, $36-million, from Walter P. Murphy. He asked that the building be unassumingly named The Technological Institute.
When Northwestern officials decided to attach the name of Mr. McCormick, the late publisher of the Chicago Tribune, to a school within the complex, they settled on the Robert R. McCormick School of Engineering and Applied Science of the Technological Institute. But first they pored through correspondence from Mr. Murphy to the university. "We didn't want to break faith with him, even though he doesn't have any survivors," says Mr. Vanden Dorpel.
Fund raisers say that increased competition for donor dollars and rising building costs in recent years have forced them to "market" their capital campaigns differently to their donors. Rarely able to pay for whole buildings, donors nowadays are giving money for smaller parts of "bricks and mortar."
All that translates into more recognition for donors, says George A. Brakeley, Jr., founder of Brakeley, John Price Jones Inc., a fund-raising consulting company. He estimates that more than 75 per cent of charitable gifts now require some kind of naming.
Sometimes it appears that a college will name just about anything for a gift. Institutions typically publish glossy brochures suggestive of sales catalogues, listing "gift opportunities." Many have named classrooms, laboratories, founders' groves, alumni fountains, staircases, and fireplaces for donors. Mr. Brakeley, a veteran of over 50 years in fund raising, says he can think of a few universities that have immortalized donors by naming heating plants.
Past experience shows that many institutions exercise "monumentally disastrous judgment" when it comes to donor recognition, says Robert P. Roche, chairman of Barnes & Roche Inc., another fund-raising consulting company. One danger: "Once you name a facility, it's hard to get other people to give money for it. The bloom's off the peach."
Rita Bornstein, vice-president for development affairs at the University of Miami, warns of a related danger: tackiness. She says she once had to rebuff a donor who wanted a building with his name in lettering large enough to be clearly visible from nearby Highway 1, and with a similarly bloated subscript reading: "In Memory of My Beloved Mother."
The ultimate question in the naming game is, of course, Is the name of the university itself on the block?
Often, yes. At the University of Miami, says Ms. Bornstein, this question has been discussed, "in general terms." She cites $250-million as a working price. That kind of gift, she says, would permit the university, and particularly development officers, to leap-frog generations of work.
Copyright © 1989 by The Chronicle of Higher Education
TRIUMPH TURNS INTO 'FIASCO'
U. of Utah's Loss of $15-Million Gift Illustrates Delicate Balance Needed in Recognizing Donors
By Peter Monaghan
The surprising withdrawal last month of a $15-million gift to the University of Utah has been the talk of university and college fund raisers in recent weeks. What looked like a triumph for Utah a few months ago turned into a fund-raising fiasco, and college officials elsewhere are asking what lessons the incident has for them.
In June, James LeVoy Sorenson, a medical-products entrepreneur who is believed to be the wealthiest person in Utah, gave the university its largest gift ever, an event campus officials described as "joyous." But when controversy erupted during the summer over naming the medical school for him, Mr. Sorenson asked the university to return his gift. In a letter to President Chase N. Peterson, Mr. Sorenson wrote sarcastically that his gift, which had been six years in the making, seemed "too much for the University of Utah to handle."
Development officers at institutions around the country say the incident was extraordinary and, for the University of Utah, as spectacular a letdown in fund raising as the reception accorded to its claims that a scientist there had achieved room-temperature fusion.
While unusual, the problems that Utah fund raisers experienced illustrate some of the difficulties that can crop up when colleges and universities attempt to offer donors recognition for their gifts. Naming, or renaming, a school or a building can be a controversial event on a campus, and what seems like a windfall for a college can prove to be a stroke of bad luck. Protests can arise over the donor's background and his or her association with the university, as well as over the amount of faculty and staff involvement in the decision. Sometimes clashes are possible when donors believe they have not been honored properly.
Despite the sensitive nature of building- or school-naming arrangements, institutions do not always have adequate policies to deal with such events, some college fund raisers say. "Donor recognition is an art, not a science, and we've all made mistakes," says William McGoldrick, vice-president for institute relations at Rensselaer Polytechnic Institute. The trick, he says, is "to give public recognition in such a way that you please the individual without compromising the institution."
Officials at the University of Utah thought they had done just that. Mr. Sorenson, a long-serving member of the university's hospital board, donated 250,000 shares of stock, worth more than $15-million, that he had acquired in Abbott Laboratories, a medical-products company. Utah officials announced they would change the name of their hospital and medical school from the University of Utah School of Medicine and Medical Center to the J. L. Sorenson School of Medicine at the University of Utah. The announcement prompted about 300 faculty members and students in the medical school to protest, claiming that the change threatened the school's name recognition and, therefore, its reputation. Faculty members argued they should have been consulted. Hundreds more faculty members, students, alumni, and donors, along with several state legislators, joined the protest.
President Peterson attempted to negotiate an amicable settlement. He offered to establish and name for Mr. Sorenson an institute of medical research and several endowed chairs in the medical school. Mr. Sorenson bluntly declined, saying the university wasn't holding up its end of the bargain.
He wrote to Mr. Peterson: "It seems to me that the University's desire in recent weeks has been more to avoid controversy than to find appropriate uses for my endowment."
Spokesmen for the university and Mr. Peterson have expressed regret over the collapse of the gift. "Between Mr. Sorenson and Chase Peterson," said J. Michael Mattsson, the university's vice-president for university relations, "there is an understanding of what happened and why, and there is a feeling of sadness on the part of both."
What happened, Mr. Mattsson says, is that university officials failed to recognize the extent of misgivings over renaming the school that were voiced during consultations with the university's capital-campaign leaders, department chairmen in the medical school, and even other donors. Consultations, he says, "were not broad enough, and not deep enough, although we thought they were at the time."
"It's a delicate thing," he adds, "because when you're negotiating a gift with an individual, and you're discussing ways that person may be recognized, you're not able to take a vote among the students and the faculty. Decisions have to be made."
Still, Mr. Mattsson insists that much of the protest's fervor was fueled by misinformation that spread quickly on campus. One rumor, for example, held that Mr. Sorenson had demanded, and had been granted, veto authority over faculty appointments. Of that, Mr. Mattsson says: "That's ludicrous." Another rumor, that graduates' diplomas would no longer display the university's name, also was unfounded, he says.
Most campuses, the University of Utah included, try to minimize problems by adopting ground rules for the recognition they will give to donors. Institutions commonly require that trustees or state boards of higher education approve naming decisions, and that academic officers be consulted, too. Mr. Mattsson says Utah's guidelines did not directly address the naming of schools, and will probably be revised to cover all possibilities.
Most colleges will not name a new building after a benefactor unless the donation is at least 50 per cent of the construction cost. That depends, however, on how much money the institution thinks it will be able to raise for that building, or for any building. The University of Miami, for instance, asks that gifts cover all construction costs, plus 25 per cent of maintenance costs.
Fund raisers say good policy includes deciding in advance what will be named for donors -- buildings, classrooms, seats in them, and fountains outside; endowed professorships and other "people-oriented" items like scholarships, financial-aid packages, research funds, and library funds. At the upper limit, will a school be renamed? Will the whole university?
Naming a school, says Ronald D. Vanden Dorpel, vice-president for development at Northwestern University, is an important decision to which "very few universities have given serious thought."
Northwestern has named schools of journalism, business management, and engineering for donors. It has attempted to name them carefully, Mr. Vanden Dorpel says, because a name with clout can "ratchet a school up in reputation" and serve as a rallying point for donor, faculty, and student recruitment.
Another issue for colleges is the donor's personal reputation or background. Colleges should be very selective about what kind of donors they approach, says John R. Miltner, vice-chancellor for university advancement at the University of California at Irvine and a former president of the National Society of Fund Raising Executives. "You really ought to concentrate your fund-raising attention on names you want associated with your campus for a long period of time," he suggests.
Whether a donor possesses the right cachet is, of course, a judgment call. At the University of Utah, protesters said Mr. Sorenson lacked it, richest Utahan or not.
Even when institutions take special care in arranging to name things for donors, problems can develop. At the University of Washington, officials have grappled with the association of a donor with the university and the amount of attention given to him. Depending on one's point of view, the university has either given the donor too much recognition, or not enough.
In 1976 the university agreed to name the running track at its stadium for a donor, Cornelius C. Chavelle, who had promised a relatively modest gift of $166,400. Campus officials named the track, then put Mr. Chavelle's name on a large events board visible from the much-traveled road outside.
The latter action, officials later decided, exceeded the requirements of its agreement, so they left Mr. Chavelle's name off a new, electronic board erected in 1987. Mr. Chavelle's estate objected, however, and has sued the university for breaching the terms of the gift (The Chronicle, October 4).
The gift had already proved troublesome to the university. First Mr. Chavelle, who was briefly a county judge, became embroiled in a personal scandal. Then, when he died in 1977, the university had to sue his estate to obtain installments of his donation that he had not paid when alive, nor mentioned in his will.
University officials now say that even large donations to their campus are not marked by large signs. A new library addition, named to honor a $10-million gift, for example, is to have a sign consistent with others on the campus, and much smaller than the one Mr. Chavelle originally enjoyed.
Privately, university officials describe the dispute as a product of inexperience. Since the controversy arose, they have tried to insure that signs honoring donors are handled thoughtfully and tastefully.
Some universities take great pains to avoid offending a donor. One challenge is renaming a building already named for a previous donor. Many fund raisers, because they consider previous memorializations inviolate, don't even try, and instead scour their campuses for facilities with names like "Old South," or no name at all.
Many others resort to piggy-backing one name onto another. A variation of this occurred recently at Northwestern University. The Robert R. McCormick Charitable Trust gave the university $30-million to rebuild a vast engineering complex that had been built in 1939 with another big gift, $36-million, from Walter P. Murphy. He asked that the building be unassumingly named The Technological Institute.
When Northwestern officials decided to attach the name of Mr. McCormick, the late publisher of the Chicago Tribune, to a school within the complex, they settled on the Robert R. McCormick School of Engineering and Applied Science of the Technological Institute. But first they pored through correspondence from Mr. Murphy to the university. "We didn't want to break faith with him, even though he doesn't have any survivors," says Mr. Vanden Dorpel.
Fund raisers say that increased competition for donor dollars and rising building costs in recent years have forced them to "market" their capital campaigns differently to their donors. Rarely able to pay for whole buildings, donors nowadays are giving money for smaller parts of "bricks and mortar."
All that translates into more recognition for donors, says George A. Brakeley, Jr., founder of Brakeley, John Price Jones Inc., a fund-raising consulting company. He estimates that more than 75 per cent of charitable gifts now require some kind of naming.
Sometimes it appears that a college will name just about anything for a gift. Institutions typically publish glossy brochures suggestive of sales catalogues, listing "gift opportunities." Many have named classrooms, laboratories, founders' groves, alumni fountains, staircases, and fireplaces for donors. Mr. Brakeley, a veteran of over 50 years in fund raising, says he can think of a few universities that have immortalized donors by naming heating plants.
Past experience shows that many institutions exercise "monumentally disastrous judgment" when it comes to donor recognition, says Robert P. Roche, chairman of Barnes & Roche Inc., another fund-raising consulting company. One danger: "Once you name a facility, it's hard to get other people to give money for it. The bloom's off the peach."
Rita Bornstein, vice-president for development affairs at the University of Miami, warns of a related danger: tackiness. She says she once had to rebuff a donor who wanted a building with his name in lettering large enough to be clearly visible from nearby Highway 1, and with a similarly bloated subscript reading: "In Memory of My Beloved Mother."
The ultimate question in the naming game is, of course, Is the name of the university itself on the block?
Often, yes. At the University of Miami, says Ms. Bornstein, this question has been discussed, "in general terms." She cites $250-million as a working price. That kind of gift, she says, would permit the university, and particularly development officers, to leap-frog generations of work.
Copyright © 1989 by The Chronicle of Higher Education
