The trick of making private donations work

Despite efforts to give it away, it seems that no one wants Jim Balsillie’s money.
In the wake of his failed attempt to purchase the Phoenix Coyotes NHL team, Balsillie has been rejected again — this time by Canadian universities.

Last week, York University turned down a $30-million offer from Balsillie’s Centre for International Governance Innovation to establish a school in international relations and 10 research chairs in international law — which would have been matched by the Ontario government with an additional $30 million.

Dozens of York professors argued the deal would threaten the university’s academic freedom, and on April 2, Osgoode Hall Law School’s faculty council voted 34-7, with eight abstentions, against it.

In a statement, York provost Patrick Monahan expressed his disappointment: “We believe this initiative held tremendous opportunity and promise for the university. We also believe that, with CIGI’s full co-operation and support, we had developed an academic governance framework that would have provided strong protection for academic freedom and institutional autonomy.”

In a letter to The National Post, Osgoode professors Gus Van Harten and Stepan Wood wrote: “The deal would have channelled public and private funding to the university through an external gatekeeper, with unprecedented strings attached. . . . CIGI had alarming rights regarding appointment, renewal, and termination of faculty. York’s obligations to give CIGI a role in academic affairs were enforceable in binding arbitration, but CIGI’s commitments to protect academic freedom were not.

“Private funders must recognize that there are important limits to what they can request in exchange for money. Serious academic institutions will ensure the limits are respected,” they added.

The University of Ottawa is among those “serious academic institutions” since last year it also backed out of a potential deal with CIGI. Louis de Melo, uOttawa’s vice president external relations, says in that case it wasn’t a matter of academic freedom, but rather the long-term sustainability of the agreement.

CIGI’s proposal would have provided funding for 10 years, but de Melo says the university wouldn’t be able to sustain the program in the long term.

“We just decided that as much as we’d like the deal to happen, the conditions weren’t fully there for it to be a successful one for both parties,” he says.

To ensure the success of a deal with the private sector, de Melo offers his advice: “You need to have very clear guiding principles from Day 1 to ensure that both parties really understand what they’re getting into.”

It’s also important to have a solid framework to protect both parties, he adds. The University of Ottawa has a specific designation policy to determine how to handle private donations. And support from the faculty is essential.

“In order for a gift to be productive and to be effective, you have to ensure that your internal champions buy into it,” he says.

He notes many universities have had success with donations from the private sector. Last year, the University of British Columbia received an $11.86-million donation from alumnus Peter Allard, which helped build its new law school building. The University of Toronto recently received donations worth more than $2 million each from law firms Osler Hoskin & Harcourt LLP and Torys LLP to help with its new law school building project.

And with the increasing lack of government funding to post-secondary institutions, de Melo says private donations are becoming critical. However, he warns against accepting donations to fill a void. 

“I think we need to be very careful that we don’t see private donations . . . as a replacement for budget operations, but rather to what will enhance the academic mission of the university or the research mission of the university.”

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