PSU Vanguard Shield Icon

Generosity can come with strings attached

More often than they care to mention, colleges and universities quietly pocket big contributions from donors who land in society’s doghouse.

Just look at the universities, including the University of Houston, that still plans to fill academic positions endowed in former Enron Corp. Chairman Kenneth Lay’s name, or the nation’s roughly 40 Arthur Andersen professors of accounting.

In Minnesota, generous and high-profile St. Olaf College alumnus Dean L. Buntrock, founder and former chief executive of Waste Management Inc., who donated $26 million to the school, recently denied accusations of accounting fraud by the Securities and Exchange Commission.

So how awkward is it for the Northfield, Minn., school to have a new Buntrock Commons student center?

“We are careful to deal with people who understand the mission of St. Olaf College,” said Gordon Soenksen, the school’s vice president for advancement. “What (Buntrock) and his family saw was the need for a community gathering place. That’s what they created.”

Nobody, said the University of Minnesota’s Norman Bowie, is perfect. And that’s something to consider, even as there are boundaries of what’s acceptable and what’s not.

“There are two areas where institutions get in trouble,” said Bowie, who holds the Elmer Andersen chair for corporate responsibility. “The first is if they’re dealing with a shady character and they know it up front. The second is if they’re dealing with someone who’s done something particularly egregious.”

In the case of St. Olaf, where Buntrock sat on the school’s board for 23 years, officials maintain that:

– These are allegations and Buntrock has declared his innocence.

– The gift to St. Olaf was a personal one and not from Waste Management.

– Buntrock has long demonstrated a commitment to the school.

“There’s been a whole bunch of good that’s come from this particular man and this particular family,” said Bill Carlson, chairman of the school’s economics department. “The emphasis being on the good that comes from private gifts to any college. That’s the way this sector operates. We have to rely upon donors.”

Augsburg College in Minneapolis kept a 1987 donation of $500,000 from an alumnus notorious for sending anonymous letters urging racial and religious purity, even after the college found out what he was doing. He unsuccessfully sued to get the money back.

The University of North Dakota kept a $100 million gift for a hockey arena from an alumnus who threatened to pull the plug midway through construction unless school officials agreed to keep the school’s nickname, the Fighting Sioux. Some Native Americans find the nickname offensive, but school officials agreed to keep the name – and the gift – anyway.

“It’s the sort of nightmare scenario for a person in a fund-raising position,” says Mark Dienhart, who oversees fund-raising efforts at the University of St. Thomas. “Your institutional reputation and what you stand for is a precious commodity.”

St. Olaf philosophy professor Ed Langerak thinks the school can use its current situation as a teaching tool. The school, after all, requires every student to take an ethics class.

“I would just raise the question between ethical constraints and capital exploitation of corporate loopholes,” Langerak said. “I’m not saying Buntrock did anything. (But) this issue would be a good one.”