'Good' and 'Bad' Gifts to Business Schools
Every year MBA programs worldwide receive multimillion-dollar gifts to establish centers specializing in particular disciplines, open new headquarters, or offer business school students scholarships. Most of these gifts have a positive impact on the lives of students enrolled in MBA programs.
But what happens when the reputations of the individuals making gifts to MBA programs are tarnished? And how do schools deal with these crises?
A recent example illustrates how careful administrators need to be when accepting donations to MBA programs. At the end of the day, business schools are brands, and as such they need to be protected as fiercely as other businesses safeguard the images of their products and services.
Libyan controversy hits MBA program
The London School of Economics and Political Science (LSE) hosts the TRIUM Global Executive MBA, along with NYU Stern and HEC Paris. The executive MBA trains 65 senior-level executives to run businesses with an entrepreneurial mindset within a socioeconomic and geopolitical context.
As strongman Moammar Gadhafi cracks down on pro-democracy forces in Libya, the LSE finds itself addressing the use of a £300,000 (about $486,000) donation from the Gadhafi International Charity and Development Foundation, chaired by Saif al-Islam, one of Gadhafi's sons and an LSE graduate.
In a BBC Radio 4 interview, outgoing LSE Director Howard Davies says the LSE will place the donation in a scholarship fund to support North African students. "I do think that it's clear that the source of [the money] now is not one we wish to be associated with," Davies says. He goes on to note that while many governments previously saw al-Islam as a modernizing figure in his father's regime, "that does not look to have been a good assessment."
The decision to accept the Libyan donation was "extensively debated" at the school at the time, Davies says, explaining that the funds were finally accepted as al-Islam spoke in favor of the development of democracy in his country and said he wouldn't control the LSE research that he funded. "We took a risk on that and I think it's right to say that that risk has backfired on us," Davies concludes.
At press time, the LSE Council was investigating plagiarism and ghostwriting claims linked to al-Islam's Ph.D. thesis, and Davies had resigned over the Gadhafi scandal.
Building MBA brand equity through business school donations
Such scandals are relatively rare, however. More often, generous gifts to business schools enhance the reputations of both the receiving school and the donor with good publicity. In recent months, four universities have announced donations that should encih the student experience in their MBA programs.
Lily Safra--wife of the late Edmond J. Safra, founder of the Republic National Bank of New York--has granted Harvard University $12.3 million to support the work of the Edmond J. Safra Center for Ethics. "If we truly value justice and basic human dignity, ethical questions need to be part of every field of study and every policy discussion," Mrs. Safra tells the Harvard Gazette. Ethics is an important topic at Harvard Business School, where Dean Nitin Nohria is leading an overhaul of the school's curriculum to emphasize competence and character-building among its students.
Saint Leo University, meanwhile, has received $4 million from alumnus Don Tapia to build its business school. After growing up in a "rough" Detroit neighborhood, serving in the Air Force and working as an air traffic controller, Tapia founded the largest Hispanic-owned business in Arizona and then obtained his bachelor's degree in business and MBA online through Saint Leo.
The retired chairman and CEO of Lincoln Capital Management, Kenneth R. Mayer, has given the University of Notre Dame, his alma mater, $10 million to fund MBA scholarships. "Ken has been a great friend to the Mendoza College for many years, and his personal example of ethical leadership is inspiring," says Carolyn Y. Woo, dean of Notre Dame's Mendoza College of Business, on the school's website. "The fellowships offered in his name will allow our MBA program to develop like-minded, values-driven leadership from some of the top candidates worldwide." Among the top 3 percent of applicants to MBA programs worldwide, Meyer Fellows are slated to receive full-tuition scholarships and stipends.
A $50 million commitment from the late Edward P. Evans should allow Yale University to build a new School of Management campus, putting into practice its social and environmental stewardship philosophy. "With this gift, Ned Evans has expressed confidence in the School's future and ensured that construction can proceed without putting undue pressure on our budget," says Yale President Richard C. Levin on the school's website. "We are immensely grateful for his generosity." Yale graduate Evans was chairman and CEO of publishing house Macmillan Inc. from 1979 to 1989.
