Anonymous donors put colleges to ethics test

DES MOINES, Iowa — A mystery is unfolding in the world of college fundraising: During the past few weeks, at least nine universities have received gifts totaling more than $45 million, and the schools had to promise not to try to find out the giver's identity.

One school went so far as to check with the Internal Revenue Service (IRS) and the Department of Homeland Security to make sure a $1.5 million gift didn't come from illegal sources.

"In my last 28 years in fundraising ... this is the first time I've dealt with a gift that the institution didn't know who the donor is," said Phillip Adams, vice president for university advancement at Norfolk State University, which received $3.5 million.

The gifts ranged from $8 million at Purdue University in West Lafayette, Ind., to $1.5 million donated to the University of North Carolina, Asheville. The University of Iowa in Iowa City got $7 million; the University of Southern Mississippi in Hattiesburg; the University of North Carolina, Greensboro; and the University of Maryland University College in Adelphi got $6 million each; the University of Colorado, Colorado Springs, was given $5.5 million; and Pennsylvania State University, Harrisburg, received $3 million.

It's not clear whether the gifts came from an individual, an organization or a group of people with similar interests. In every case, the donor or donors dealt with the universities through lawyers or other middlemen. Some of the money came in cashier's checks, while other schools received checks from a law firm or another representative.

All the schools had to agree not to investigate the identity of the giver.

"Our chancellor was called to a Denver law office and had to sign a confidentiality agreement that she would not try to find out," said Tom Hutton, spokesman at the University of Colorado, Colorado Springs. "Once the chancellor signed it, she was emphatic that we don't try to find out."

Each donation has been delivered since March 1 and came with the same stipulation: Most of the money must be used for student scholarships, and the remainder can be spent on various things, such as research, equipment, strategic goals and operating support.

"We have no idea who this generous individual is, but we're extremely grateful," said Lynette Marshall, president and chief executive of the University of Iowa foundation.

Usually when schools receive anonymous donations, the school knows the identity of the benefactor but agrees to keep it secret. Not knowing who is giving the money can raise problems.

William Massey, vice chancellor for alumni and development at UNC-Asheville, said the school was in contact with the Department of Homeland Security and the IRS to make sure the money was legal before accepting it.

"There may be an ethical problem if you knowingly accept funds from ill-gotten gains," said Colorado Springs' Hutton. University officials "do due diligence and ask the appropriate questions and receive satisfactory answers."