Donations come with strings

A post from PaulL, regular commenter and occasional author.

This story in the Herald tickled my fancy.

It’s behind a paywall, so let me give a summary for those who don’t choose to pay.

Grant and Marilyn Nelson, from Canterbury, became quite wealthy in the 90s through selling their building products company, which they had built from scratch. They created a foundation with the intent of giving away most of that money. As part of that they created an endowment of $3M to Victoria University in 2013 to establish the Institute for Governance and Policy Studies (IGPS), and in particular they wanted the Institute to do research into the influence of money and lobbying in politics, which was a particular concern for them.

They appear to have believed that this institute would be a long term thing – other people would donate too, and it would become a permanent fixture at Victoria University. Accordingly their gift deed was quite general so that it would still be relevant in 100 years time. It did provide some information about their areas of interest, but it didn’t mandate that those get researched.

After 3 years they concluded that pretty much nothing had happened. The money had been spent on accommodation and staff, but no research had actually happened into the areas they were interested in. They talked to the University about it, and seem to have agreed the problem was that there wasn’t enough money, so they gifted another $7M, taking the total to $10M.

After another few years, little if any research has actually occurred into the area they were interested in. So they threatened to take the money back entirely (presumably their deed of gift allowed that), and ended up agreeing to shift to a contestable grants model. Under that model academics can apply for funding for specific research, and are funded to conduct that research.

None of the academics at the IGPS applied for any of these grants, so the IGPS no longer has funding from the Nelsons. It may need to close down with associated loss of jobs. A former director of the centre, Professor Jonathon Boston, is upset at the University for not pushing back, and thinks it’s a violation of academic freedom.

So what about this story entertained me?

Firstly, we have a couple who are concerned about the influence of donations. They’re presumably worried that people who donate get some level of control.

So what do they do? They donate some money to a university. But then they get annoyed because the university don’t do what they want. Their donation very clearly came with strings, and they quite clearly expected to get the things that they wanted. It’s amusing to fund research into the influence of donations that might come with strings by……making a donation that comes with strings.

More amusing is that the recipients of that donation didn’t do what they wanted. They’re offended by that “We provided $10 million to make sure that the research work that we wanted to get done was carried out and it was very disappointing that staff thought that they could ignore this and get away with doing whatever they wanted to do.”

I guess that’s news to them – when you donate money you usually don’t actually get any control. I don’t personally think that money in politics has that much influence. I think people donate to parties that are going to do the kinds of things that they want, rather than political parties doing the kind of things people want because of the donations. That is to say, political parties do whatever the hell they want (or that they think is in the best interests of the country), and the donations just fund them to do that, rather than giving any control over direction.

It’s very sensible to move to a contestable grant model. In that model you are funding specific research, and you only fund the things you actually want to fund. If that’s what they always intended then it shouldn’t really have been structured as an endowment. I’m not aware of a similar structure in politics, although perhaps that’s where lobbyists come in – they only focus on the specific things you want. But politicians don’t have to listen to them.

Next, I’m amused at the academics. They have this flow of money from people who want something. They take the money, then do whatever they want. So the money stopped. Colour me surprised.

Things moved to a grant model, and the grants are for research the donors want done. Prof Boston thinks that compromises academic freedom. So, if I applied for funding for research into lung cancer, then once I had the money can I decide that I’d rather research basket weaving? No, the grant was for a purpose, if I don’t want to do that research I shouldn’t have taken the money.

Here’s they key though. It’s not limiting academic freedom to fund only specific research. You can still research whatever you want, you just can’t do it with my money. You still have academic freedom. You just don’t have funding.

I’m even more amused that the academics concerned decided not to apply for a grant, because they weren’t interested in research in that area. So they are academically free. But also unemployed. Because money doesn’t actually grow on trees, and if nobody wants to fund what you’re researching, you have no job.

If they were specifying the results you should find when you do research, then that would absolutely compromise academic freedom. I can think of a few disciplines in academia in which coming to the wrong conclusions would absolutely dry up your funding, and that is definitely a limit on academic freedom in those disciplines. More material, probably, is that those who come to the “wrong” conclusions get ostracised and cancelled. You’d have to be enormously strong to stand up against that sort of pressure.

All in all, this is an illuminating tale of how the real world works for both sides. And it seems to have come to a reasonable resolution, albeit one that isn’t so good for the funding of the IGPS.