Donors Are A Big Deal To USC. How Does The Turmoil Around Student Protests Affect Fundraising?

When University of Southern California administrators canceled valedictorian Asna Tabassum’s commencement speech this spring, the stated explanation — safety reasons — left many students and faculty confused. How could a university with its own private security, access to LAPD assistance, and that only a year before hosted President Barack Obama for commencement, not protect a student?

According to student journalists, in a call soon after with the university’s top administrators, faculty asked if perhaps the withdrawal of Tabassum’s speech — after she was criticized by pro-Israel activists — was meant to appease one or more donors.

USC’s top academic officer reportedly denied the accusation.

USC, like many other private universities, raises a lot of money. And as the faculty question alluded to, big university donors like to shape a university’s direction. But what is the relationship between donors and university policy? And how do those relationships change when the university draws widespread criticism?

“My main reaction to questions about the role of donors is it's probably over-emphasized compared to its actual importance,” said John Matsusaka, a professor of business and law at USC. He worked at USC during the various scandals that led to the exit of USC’s last president, C.L. Max Nikias. Those scandals rocked the confidence of big-money donors to the university.

And while USC administrators faced withering scandals in the last decade, how university officials have responded to protests on campus that seek to end Israel's war effort in Gaza — including by calling in police to clear student encampments — do not appear to be rocking the support of big time donors.

“[T]here has been no impact on donations,” USC said in a written statement to LAist.

Does the university answer to donors?

That doesn’t mean donors aren’t upset.

Two weeks after USC pulled its invitation for Tabassum to deliver a commencement speech, USC alumnus and benefactor Lloyd Greif — he has an academic center named after him — told the L.A. Times that administrators made a mistake inviting her in the first place.

Greif has a history of criticizing administration actions. In 2018 he lashed out at USC’s top leaders for the removal of a popular business school dean.

Other donors may simply tell their concerns to the staff members charged with raising money.

“Development is collateral damage during scandals, I’ve experienced that,” said a former USC employee with knowledge of USC’s fundraising. The employee asked for anonymity for fear of repercussions.

But donor reaction might be less about the original problem than it is about trust. That employee said one donor told them it’s not so much because of the scandals, "but because of the cover up, and other donors felt that way too.”

The ways administrators are held to account

There are all kinds of consequences — big and small — to administrative controversies.

For example, university faculty voiced their displeasure with President Carol Folt's recent decision-making by censuring her earlier this month.

“I always want our university leadership to succeed,” said Devin Griffiths, a USC English and comparative literature professor who authored the censure resolution. Censure is a formal statement of rebuke against top leadership, but not a call to resign.

“I'm not sure if I've entirely lost confidence with [President Folt] yet but … it's very hard for me to imagine what she can do at this point to really restore the confidence of the faculty and students,” he said.

The way the previous USC administration handled revelations about a campus gynecologist who had sexually abused hundreds of patients troubled Ange-Marie Hancock, then a professor of political science and gender studies at USC. She incorporated investigating university practices into an undergraduate class about the #MeToo movement.

But an upset high-profile donor can draw attention to problems in a unique way.

For many universities, “There is a history more recently of donors withdrawing their financial support, should there be a decision that they disagree with,” said Hancock, who is now executive director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University, after 15 years at USC.

Another student encampment and university officials’ response to it at Columbia University have made the New York school an example of conflict over how to address protester demands.

One major donor to that university said he had lost confidence in Columbia’s administration.

“I am no longer confident that Columbia can protect its students and staff, and I am not comfortable supporting the university until corrective action is taken,” said Robert Kraft to the New York Times. Kraft is the owner of the NFL’s New England Patriots.

In December, the University of Pennsylvania lost a $100 million donation and the following month, a big Harvard “mega donor” pulled his support.

What’s the most important job of a USC president?

The biographies of Folt’s two predecessors underline the extraordinary amount of money the two presidents brought to USC. President Steven Sample’s bio lists 10 major donations totaling $542 million. Nikias’ bio highlights his leadership of a $6 billion dollar fundraising campaign.

USC’s board of trustees hired Carol Folt in 2019 in part because she had navigated a major college sports scandal while president of the University of North Carolina at Chapel Hill.

“[Folt] has never been a fundraiser and part of the deal with her coming to USC was that she wasn't going to be as vigorous a fundraiser as [Steven] Sample and Max Nikias,” said emeritus USC education researcher William Tierney.

It’s USC vice presidents, deans, the provost, and individual schools’ development officers that have the most interactions with big donors, according to the former USC employee.

An LAist review of Internal Revenue Service filings, also provided by USC, show contributions — donations made outside of fundraising events, as well as non-governmental grants — declining over the past several years. Governmental grants have grown.

The fundraising often brings relationships with funders that top administrators must cultivate and nurture. Hancock worries that students will suffer if donors pull out in response to a university crisis.

“If you were to talk to most development or advancement professionals, they will tell you that … aside from big buildings and having your name on a building, doing student scholarships is one of the other major, major resources that private donors give to universities around the country,” she said.

USC said it gave out $724 million in scholarships in the fiscal year 2022.

What about future donors?

Many of USC’s top donors are former students who have gone on to become wealthy. Current students are still processing whether the administration’s actions will affect their view of the university after graduation.

“They've made some poor decisions. Yes. But at the end of the day, it is a school that I genuinely love,” said undergrad Gabrielle Annon at a graduation celebration earlier in May.

USC is famous in Los Angeles for its cultivation of “The Trojan Family,” building school support among undergraduates and alum.

“The basic idea is that we're one family, that we stay connected together and that that relationship lasts over time,” said Griffiths, the professor of English and comparative literature at USC.

“I think there are many students and faculty and members of the administration who take that to heart and feel it,” he said.

In the weeks after USC administrators called on police to clear an encampment of protesters, feelings among students for the university appeared to vary.

“I still love the school, still a Trojan for life,” said undergrad Emma Adamson. She feels donating will be part of being a member of the Trojan Family after she graduates.

“[Donating] depends [on] my future, but hopefully if I do have enough money to donate, if it's going to the right places, I'd have to make sure of that,” she said.

But not all have forgiven the university’s missteps in the last month of the school year — canceling the valedictorian’s speech, clearing out protesters, and adding security checkpoints.

"It felt like collective punishment to everyone," said Anusha S, a USC graduate student who doesn’t go by her last name. She’s made up her mind about donations. "I don't want my money to go to a college that didn't really give me the best experience."

“I'm not a big donor but have always contributed to scholarships,” Viki Goto said via email to LAist. Goto said this is her reunion year as a USC alumnus and she won’t be attending.

“I'm urging my fellow alumni to withhold their contributions until the University seriously addresses their many shortcomings in handling this situation,” she said.

Griffiths, the professor, said he doesn’t embrace the culture of The Trojan Family. "The thing I always tell people is, institutions don't love you,” he said. But, he added, “The people who work at those institutions really do care about you.”