Ethics Scenario #23: Tidwell University

23. Tidwell University’s chief development officer, Ted, receives a call from “Wild Bill” Hanford, one of its best known alumni, requesting a meeting to discuss a possible major gift. Hanford was recently released from a federal prison in Allenwood, PA, having served a 3-5 year sentence for insider trading. At the meeting, Mr. Tidwell asks if the university would consider a $30 million donation for the purpose of building a new facility to house Tidwell’s business school, with state-of-the-art technology embedded in the building. The only requirement would be the building would have to be named “The William Hanford School of Business.” Ted thanks Mr. Hanford for his offer, and replies that it would need to be a decision of the entire board to decide whether to accept such a donation for this purpose. Two months later, the President of Tidwell puts the issue before the board of the institution. The board approves it.

a. Can the board ethically approve this donation?

b. If the donation is approved and provided, should Mr. Hanford be provided with a substantiation letter permitting him to take a full tax deduction for his donation because of the tangible value in having the building named after him?

c. If the donation is not accepted with the strings attached, is there some middle ground the board might pursue to not offend this major donor and generate needed funds to finance its programs and do so ethically?