MSU donations drop 25%; Nassar effect uncertain
Fundraising at Michigan State University took a 25 percent hit in the second half of 2017, a period in which the bad news surrounding Larry Nassar grew increasingly worse.
Across that span, the former MSU doctor pleaded guilty to child pornography charges and criminal sexual misconduct, drew a 60-year sentence in the pornography case and was publicly accused of sexual abuse by three former Olympic gymnasts — and as his toxic story splashed across the front pages, donations fell to $104.2 million from $138.8 million in the same period the year before.
But there are potential silver linings in what seems like an ominous cloud. Experts in collegiate fundraising say that any backlash should reach its expiration date by the start of the 2019 school year, and that the fall of Nassar and the fall-off in gifts are not necessarily related.
In comparison to MSU, donations to the University of Michigan dropped by only 0.86 percent in the last two quarters of 2017, while another large Big Ten institution showed an increase of 23 percent.
That school was Penn State, where former assistant football coach Jerry Sandusky was sentenced to 30 to 60 years in prison in 2012 for sexually assaulting boys, and three administrators were ultimately jailed for covering up Sandusky’s crimes.
Penn State’s rebound could be an encouraging sign for MSU, and its response to a wrenching scandal could also be a template as the university goes forward without a president who resigned, without an athletic director who retired, and without knowing how deeply its finances and reputation will be damaged by NCAA penalties and the potential lawsuits from more than 250 of Nassar’s victims.
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“Will Michigan State take a hit in the short term? Absolutely,” said Kristen DeVries, vice president for university advancement at Lawrence Tech University. “If they continue bungling, it could be a much longer term.”
If, however, “they can get back to what has made Michigan State so attractive to academics, students and parents,” any fundraising slump should be over in 18 months. “That,” DeVries said, “is exactly what happened at Penn State.”
Richard Bundy, a former MSU staffer who’s now the vice president for development and alumni relations at Penn State, said the most important thing fundraisers did as the Sandusky issue reverberated was to “spend time listening to their donors.”
The university had its most successful fundraising year immediately before Sandusky’s arrest in 2011. Its second- and third-best years have come since his conviction.
“The institution is going through a painful time right now, but so are its alumni,” said Bundy of MSU, where he spent 1997-2000 with the Eli Broad College of Business. “To an extent, development and alumni relations professionals can help their alumni understand what happened, in an open and non-judgmental way. That’s a really important consideration for them.”
MSU declined to comment on Nassar’s potential impact on fundraising. “Right now,” said spokesman Kent Cassella, “we have one focus: supporting the courageous survivors of Larry Nassar’s horrific abuse and providing them with the help they deserve.”
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A sampling of recent MSU donors, with gifts ranging from three figures to eight, may have been telling in that they affixed their outrage to Nassar rather than his employer.
Computer scientist John Koza of Los Altos, California, gave $2 million to the MSU engineering school in 2014 and followed it with a $10.7 million bequest in 2016 to a program called the BEACON Center. A UM alumnus four times over who also supports engineering programs at his alma mater, Koza, 74, was a pioneer in genetic programming and co-founded a company whose computer systems operate state lotteries.
“My future plans have nothing to do with this Nassar,” he said. “The university has tens of thousands of people. It’s inevitable that some of them are bad apples.”
James MacKay of Birmingham and MSU’s Class of 1990 wears his allegiance on his bumper: His license tag features a Spartan helmet and the message, B1GGRN.
He was initially so outraged by Nassar and what appear to be his enablers that “I thought about getting rid of my plate,” he said. But after an ESPN report seemed to connect tenuous dots from Nassar to MSU’s football and basketball programs, “I circled back around” to being angry at the doctor more than the school that employed him.
It’s treacherous ground, conceded MacKay, 50, a marketing director. He doesn’t want to be seen as defending Nassar, whom he loathes. But he loves MSU, he treasures his Spartan memorabilia, and yes, he’ll still send occasional checks.
“You’re not going to find everybody just turning the spigot off,” said Arthur Criscillis of Alexander Haas, an Atlanta-based fundraising consultancy whose list of past and present clients includes more than 180 schools. “Nothing happened that’s different in the classrooms. Nothing happened in the research labs. The university is larger than any one person.”
The swiftness of a university’s recovery, he said, depends on “the degree to which the institution takes decisive action, resets its sights, refocuses on its mission, articulates its aspirations and gets about the business of its good work.”
Criscillis worked with the University of Tennessee, he said, during a tumultuous period in which two presidents “found themselves without a job under challenging circumstances, shall we say.”
One resigned in 2003 after accusations of misusing university resources. The next resigned in 2009 after a series of tussles that led to a faculty no confidence vote. Nevertheless, UT completed a successful billion-dollar capital campaign.
MSU hit the mark in its own four-year, $1.5 billion Empower Extraordinary campaign last September, a year early. The campaign, fueled by donations by more than 230,000 people, was extended through the end of 2018 — and is one of the reasons the 25 percent decrease last July through December might not be significant.
“I’d be very leery of putting some sort of cause and effect here” with Nassar, said Alden Briscoe of Brakeley Briscoe, a fundraising consultancy in San Mateo, California.
Capital campaigns tend to front-load large donations, he said, meaning the heaviest hitters might have already swung by late 2017. In an accounting that includes cash gifts, planned gifts, pledges and realized bequests, the date on a large check — June 29, for instance, rather than July 1 — can skew a six-month report.
It’s possible, Briscoe said, that “some potential donors are saying, ‘I don’t want to be connected to this institution where terrible things happened.’ ” But a controversy typically “has an impact for a period of time and then, ultimately, people get over it.”
“What we want most,” said Larry Gaynor, 62, “is closure. We want to know the truth. The quicker we do, the quicker the victims, the alumni and the school can heal.”
At his alma mater, said the CEO of the beauty products company TNG Worldwide, “these are the darkest days by far since 1855, when it was founded.” But having pledged $3 million to the Broad College of Business to establish the Gaynor Entrepreneurship Lab, he and his wife, Teresa, “are not changing any of our plans. We’re going forward.”
Spring graduate Abigail Reed of West Bloomfield Township is featured online in MSU’s annual giving report. She helped direct a $17,000 donation from the Senior Class Council to MSU Safe Place, a support and resource center for survivors of relationship violence and stalking.
Particularly given her interest in Safe Place, the Nassar disaster “changes the way I look at certain individuals within the institution,” said Reed, 23. “But I hope people don’t take it out on the university as a whole because I love it there.”
Agreed, said Jason Vines, 58: “Please focus on the guy who did this.”
Vines has a master’s degree in labor and industrial relations from MSU, and his wife, Betsy, holds a bachelor’s in business travel management. On their front porch in Wilmington, North Carolina, they fly a Spartan flag.
Vines had a long and colorful career in business communications. With Ford, he dealt with the Firestone calamity, in which defective tires were blamed for 271 deaths in the U.S. Later, with Compuware, he helped handle the fallout when the company hired former Detroit Mayor Kwame Kilpatrick.
In a crisis, he said, “the guiding principles are simple. No. 1: Take care of your customer. No. 2: Be transparent and honest.”
He said that if MSU needs him, he’ll move to East Lansing for the next six months at no charge to help interim president John Engler and his team navigate the roiling waters.
“I love the university,” he explained, enough to set aside his current career as a consultant and author.
Vines’ first book, a memoir of confronting corporate chaos, was called “What Would Jesus Drive.” The answer is all of four words long, he said, and they are crucial as Michigan State pays the price for Nassar:
“He drove the truth.”