Paul L. Caron

Monday, June 17, 2019

What The Alabama Returned Gift Episode Can Teach Us About Donor Relations

Following up on my previous posts (links below):  Chronicle of Higher Education, U. of Alabama’s Returned Gift Is a Case Study in Donor Relations Gone Bad:

Alabama Logo (2019) (Crossed Out)The saga is a case study in how donor relations can go bad, complete with a crescendo of national publicity and a frenzied public-relations effort to set the record straight. ...

The falling out in Alabama is a worst-case example — though hardly the first of its kind — involving universities and big-money donors. Doug White, a philanthropic adviser and author, said it highlighted the need for mutual expectations to be made clear for each party’s role in the relationship after a donation is made or pledged.

That misunderstanding was clear in an email exchange between Culverhouse and Bell on May 25 in which the donor wrote: “You seem to think the quid pro quo is I give you the largest sum and commitment in the school’s history and you have no return consideration as your end of the transaction.”

“In my mind, it goes back to a fairly basic concept,” White said. “And that is: A gift agreement should carry a lot of these understandings down on paper.”

White, who is the author of a 2014 book on the breakdown of relations between Princeton University and a longtime donor family, said the lesson from Alabama is twofold: Make future expectations clear, and stay in touch with the donor to anticipate possible conflicts. Disagreements between donors and universities aren’t uncommon, he said, but “you don’t try to eliminate the tension; you just try to figure out how to best manage it.” ...

That the conflict escalated so quickly — and so publicly — emphasizes the need for university officials to address misunderstandings with donors before the disputes appear in national news outlets.

According to White, what pushed Culverhouse to turn hostile and to presumptuously assert his role in the law school’s administration — and what drives many wealthy donors who fall out with their beneficiaries — was a perceived lack of respect. White said that even if such a perception is a projection or is based in misunderstanding, it is university administrators’ responsibility to cater to the donor’s ego and smooth out the conflict.

“That moment when the gift is made is really the beginning of a huge new phase, and oftentimes a lifetime phase,” White said. “And I know he’s a past donor … but you can’t let your guard down. This is what stewardship means.”

White just might be onto something. Despite all the public accusations over the past week, Culverhouse indicated to The Chronicle that he was willing to return to the table with the university if its officials would just “sit down, calm down, and put it all back together.”

Prior TaxProf Blog coverage:

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This is going to be on somebody's tax exam.

Posted by: Mike Livingston | Jun 18, 2019 4:21:52 AM