Scandals spotlight the role of private funding in science

The Associated Press reported this month that the family behind Purdue Pharma, the maker of Oxycontin, donated more than $60 million to universities in the past five years, well after lawsuits were launched against the company for its role in the opioid epidemic. This, just weeks after the Jeffrey Epstein scandal sent shock waves through some of the world's most prestigious universities and high-profile labs. Many of those funds were earmarked to support scientific research, leading observers to suggest the Sackler family and Epstein burnished their reputations through science.

Canada isn’t untouched by these scandals. McGill University and the University of Toronto are listed as recipients of Sackler funds: $3.17 million and $36,000, respectively. And, according to Buzzfeed, the University of British Columbia received $25,000 from Epstein through one of his foundations.

These events bring into sharp relief the challenges confronting universities—here and abroad—as they seek support for scientific research and other programs from private donors. They are also a reminder that who funds science matters.

“Reputation of the donor is an issue that continues to grow because who gives to your organization has now become an extension of your values and principles,” said Michael Nilsen, Vice President, Marketing, Communications & Public Policy at the Association of Fundraising Professionals (AFP), in an interview with RE$EARCH MONEY.

Science Philanthropy

In Canada, philanthropy is becoming an increasingly important piece of the research funding puzzle, according to a 2018 survey of charitable giving to post-secondary institutions in Canada, conducted by the Council for Advancement and Support of Education (CASE) in partnership with the Canadian Council for the Advancement of Education (CCAE). Among the 38 institutions who provided data about the charitable purpose of the philanthropic funds they received, about one-quarter of funds secured were designated for research programs and partnerships. Looking to the future, a campaign launched by McGill University on September 26 aims to raise $2 billion, of which $750 million is earmarked for “research, accelerating discovery and breakthroughs in strategic areas,” such as neuroscience, environmental sustainability, and the social impacts of artificial intelligence and data science.

The reasons universities are turning to private donors are multiple. Competition for research dollars is increasingly fierce and the cost of doing research is rising. Some institutions are trying to offset stagnating or shrinking government budgets for education and research, while others are striving to boost their budgets in the pursuit of institutional excellence. For example, the University of Calgary is wrapping up a $1.2 billion campaign, launched in 2016, predicated on the idea that “great cities need great universities, and great universities are built on great philanthropy.”

“I think institutions are getting more astute at leveraging community investments and donor philanthropy to support, augment and advance more traditional funding streams that have supported research," said Nuvyn Peters, Vice President, Development and Alumni Engagement at the University of Calgary, in an interview with RE$EARCH MONEY. "There are now many institutions across Canada that will have a fundraiser within the Vice President for Research office. They're working on closing gifts, but they are also looking at what are some of the research projects that we're doing that would resonate with a community leader."

Fundraising Ethics

As philanthropic donations in support of research grow in number and size, Canadian post-secondary institutions are at increased risk of being caught up in controversies similar to those now playing out in the United States and elsewhere. There are systems in place to mitigate that risk, but the recent scandals raise the question of whether they are good enough.

Professional societies like AFP, CCAE and CASE have codes of ethics and standards to promote ethical decision-making. AFP members are required annually to sign the code, and there is an ethics committee that oversees complaints and provides advice to fundraisers who are faced with ethical dilemmas, such as whether to return funds gifted by so-called "toxic donors" like Epstein.

AFP recently surveyed its membership, which includes 3,800 Canadian fundraising professionals, about ethics. “One of the things that really stood out is our members say they need not just the ethical advice, but also approaches to talking to their senior directors and CEOs and boards about it,” said Nilsen.

This is particularly true in the “giving season,” the months from October to December when many charities and not-for-profits receive one-third to one-half of total annual donations. At the outset of October, AFP launched its first Ethics Awareness Month. “It’s an extremely important time of year in terms of raising funds and that will lead to some pressures,” said Nilsen. “We want to shine the spotlight on ethics, which is much more than a list of do’s and don’ts. It’s a way of approaching problems and bringing people together to come up with a solution that makes sense."

Fundraising Policy

Post-secondary institutions also have policies and procedures in place to govern engagement with donors. For example, the University of British Columbia’s fundraising policy guides how the office of Development and Alumni Engagement stewards donations. It includes specific policies related to gifts equal to or exceeding $5 million, as well as those that are determined to be sensitive or precedent-setting. The policy outlines a handful of factors to be considered when assessing the ethics of a gift. Those include whether the gift “could improperly benefit an individual or organization”; “could compromise UBC’s public image, reputation or expose UBC to embarrassment”; “has terms that may require UBC to violate human rights”; or “would give the donor or the donor’s representative the right to designate the recipient of a donation including an award, lectureship, professorship, chair, other honorific."

However, there is often no clear answer. “Different organizations will come up with different responses based on any number of factors. In some cases there’s a bright-line answer, in some cases there isn’t,” said Nilsen.

In addition to fundraising policies, most universities also have staff dedicated to researching potential donors, as well as gift agreements that outline what the donor and the university have agreed on before a gift is accepted.

"There are very clear articles written within all of our gifts agreements that outline where a donor will not be involved in the management of the gifts and in decision-making," said Peters. "We want to not only protect the reputation of the university, but also the donor's reputation. And, we want to make sure that as that relationship continues to develop between a donor and the university, we are able to abide by that donor's intent, while ensuring that the university maintains independence in the use of and governance of those philanthropic funds. That's critical."

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