- Fundraising is an important part of a university president's responsibilities.
- Penn president Liz Magill stepped down after several big donors pulled or threatened to pull funding.
Penn President Liz Magill's resignation, following months of criticism and a botched congressional testimony, rocked academia.
Some celebrated it as a win against antisemitism; others viewed it as curbing free speech and the right to protest.
While there are many reasons Magill stepped down, one possible factor is straightforward: money.
The responsibilities of a modern college professor are two-fold, Michael Hemesath, a professor of economics at Carleton College and the former president of Saint John's University, told Business Insider over email.
Internally, their job is to focus the school's academic mission and campus culture. Externally, they must serve as the school's public face and fundraise — something that is taking up more time as private donations become integral to universities' budgets.
"In recent decades, the role of a university president, particularly at bigger institutions, has shifted significantly toward more external commitments, primarily fundraising as institutions grow more complex and educational costs have continued to rise faster than inflation," Hemesath said.
At a big research institution, external responsibilities can take up 75% or more of a president's time, he added.
Nearly 60% of respondents to the 2017 American College Presidents Study said fundraising was one of their two most time-consuming responsibilities.
In a 2011 study, public university presidents reported spending an average of 6.7 days a month fundraising and 5.27 days a month hosting major donors. About 75% of respondents ranked their fundraising duties among their top three responsibilities as president.
Whether or not you support Magill's positions, there's no arguing that her actions have caused Penn to lose support from donors — and had she stayed, it could have lost even more.
The University of Pennsylvania appears to have taken the most public flogging from its donors — with high-dollar alumni threatening very openly to pull their money after Penn's handling of antisemitism on campus and free speech. And Magill was facing donor dissatisfaction before Hamas' October 7 attack on Israel.
Following the attack, the Huntsman family, hedge fund veteran David Magerman, and billionaire Clifford Asness all said they halted donations to Penn.
Apollo CEO Marc Rowan, who donated $50 million to Wharton — Penn's business school — in 2018, said he would close his checkbook until Magill stepped down. Asset manager Ross Stevens threatened to pull a donation worth $100 million if the school's leadership didn't change. And members of Pennsylvania's State Senate said they would not vote to fund the university's veterinary school until Magill resigned.
Beyond these individual donors, the noise around Magill could have caused others to hesitate before writing a check.
"As prominent donors withdraw support, other donors may take that as a signal of the loss of institutional focus on education, and these many smaller donors may decide that they too should withdraw support," Hemesath told BI in October.
Harvard's donor backlash didn't appear as severe
Harvard president Claudine Gay also came under fire for her December 5 congressional testimony, but the school has not seen a public donor backlash at the scale of Penn's.
Harvard's most high-profile loss came in October, when the foundation of billionaire former Victoria's Secret CEO Les Wexner cut ties with the school.
While business leaders and Harvard alumni like Bill Ackman and Ken Griffin have spoken out against Gay, few have committed to withdrawing donations.
And unlike Magill, Gay generated a giant show of support from faculty and alumni as the Harvard board deliberated on her future. Harvard's board announced Tuesday that Gay will stay in her role.
It's hard to say whether the lack of financial backlash contributed to the board's decision to keep Gay in her role, but it's sure to be an important part of her job going forward.