The recent controversy surrounding MIT neuroscience raises questions about how much power philanthropists have over universities.

Tinker Ready

You could call it the philanthropy corner of MIT. Within a block of the corner of Main Street and Vassar sit several large new research buildings bearing the names of the wealthy donors who funded their construction: Ray and Maria Stata, Eli and Edythe Broad, Lore Harpe and Pat McGovern, Barbara and Jeffry Picower.

These institutes have created new research facilities and opportunities, but two of them, the McGovern Institute for Brain Research and the Picower Institute for Learning and Memory, are now at the center of a controversy. The failed recruitment of a young neuroscientist by MIT earlier this year brought to light ongoing tensions between the two neuroscience centers. MIT president Susan Hockfield convened a panel of MIT professors outside of the life sciences to examine the relationship between the two. They released their highly critical report last week.

The panel found intense competition and lack of communication between the McGovern and Picower Institutes, which are “impeding progress in neuroscience at MIT.” It wrote that the head of the McGovern Institute effectively reports only to the McGovern board of directors and not to the university’s leaders. And the report says that the system in which the institutes fund faculty positions while the departments make the actual appointments could create “conflicting goals” between the institutes and departments.

Some MIT faculty members dispute the accuracy of the report and the committee is currently receiving comments on it. But the incident at least raises larger questions about whether such institutes—many of which have separate boards and funding sources—operate under the same rules as the rest of the university and are even at odds with it. For some observers, these questions stem from a troubling trend at universities: donors are asking for more influence.

“Philanthropists are less willing to accept universities that say, ‘That’s the way we do things,’” says William Tierney, director of the Center for Higher Education Policy Analysis at the University of Southern California in Los Angeles, who studies university governance. “They say, ‘Well, maybe that’s the way you do things, but we’re not going to give you money if you do things that way.’”

He adds, “I don’t think we know enough to say that this is a transformation that has irrevocably harmed higher education. I think there are warning signals.”

Money in

The Picower and the McGovern family foundations are only two of thousands that give money to scientists and universities each year. In 2004, colleges and universities attracted a larger share of foundation funding—nearly 18 percent or $2.7 billion–than any other group, including museums and human service groups, according to the Foundation Center, a New York-based research group.

At universities, billions of research dollars flow in every year, but not through the same door. One set of staff and policies help researchers win and manage research grants from major government agencies like the National Institutes of Health. Separate sponsored research offices handle corporate support, which in many cases is subject to guidelines and disclosure rules designed to prevent conflicts of interest. Development offices usually negotiate “individual gift agreements,” often within the terms of a school’s “gift acceptance policy”, says Rae Goldsmith of the Council for Advancement and Support of Education, a professional group for university fundraisers.

But these individual agreements–which can cover terms like naming rights, governance, payment schedules, and limits on how the gift can be used–can vary from donor to donor. Many private universities say they want to protect the privacy of their donors and don’t disclose the terms of these agreements. “MIT does not comment on the specifics of private philanthropy,” says MIT spokeswoman Patti Richards.

At the same time, potential donors make contact with a university in a variety of ways, via alumni offices, individual researchers, or the development office. University administrators may not always have a complete picture of how donations are moving through their institutions, says Evelyn Brody, a professor at the Chicago-Kent College of Law who studies the nonprofit sector.

“The relationships that lead to these gifts are often at different levels and it must be very difficult for these universities to control,” Brody says.

Power struggle

The combination of wealthy, powerful donors and the lack of a standardized, transparent system for dealing with them can result in donor-funded institutes that operate somewhat independently of the university, Tierney says. For exampel, on its website, the Picower Institute, describes itself as “an independent research entity within MIT’s School of Science.”

One possible consequence is that well-endowed institutes can become more powerful than academic departments, says Tierney. What happens, he wonders, when departments need faculty in one area but the institute wants them in another?

“What we are seeing now is: faculty have their tenure-line appointments but the department doesn’t have any money. Where the money is happening is in the research institutions,” he says. “So you get the rich institution saying to the department, ‘We’re going to hire these people. Would you like them to be in your department?’”

At MIT, the response from the administration has been to create a new centralized system of oversight for the two brain institutes and the two departments where neuroscientists are appointed. After three years, MIT will assess whether it is still needed.