The Case for Careful Review and Transparency for Non-Traditional Sources of Funding Such as That of the Charles Koch Foundation 

On November 12, 2019 UNC Greensboro’s AAUP Chapter hosted a lecture entitled “The Charles Koch Foundation and Contracted Universities: Evidence from Disclosed Agreements” given by Professor Douglas Beets, an accounting professor at Wake Forest University, where he has taught since 1987.*  Professor Beets made a compelling case for why non-traditional sources of funding such as the Charles Koch Foundation should receive more careful review and transparency at all universities.  As traditional sources of funding are diminishing nationwide— particularly funding from state governments – these non-traditional sources can affect the quality of higher education—for good or bad—long after the initial funding disappears. 

Beets became interested in the Charles Koch Foundation as he became aware of its quest since 2000 to donate hundreds of millions of dollars to US universities, including a significant amount of money to Wake Forest. Charles Koch, who founded the CKF, is a staunch Libertarian. The eighth wealthiest person in the world with financial resources of $80 billion dollars, Koch has devoted his life to politically and financially supporting small government and minimum regulation of business.  Prof. Beets served on its Senate task force to review the CKF’s expectations in return for its generous contributions. 

Between 2008 and 2017, the CKF has contributed over to $230 million dollars dozens of major universities across the country, including Wake Forest, UNC-Chapel Hill, Duke, and UNC-Greensboro. What particularly caught his attention while serving on the task force was the fact that, until recently, CKF had kept its agreements/contracts with universities secret. When confronted with public pressure and the Freedom of Information Act, CKF changed course:  currently CKF specifies that its agreements going forward will be open to public disclosure, though the foundation has not seen fit to make the bulk of its past agreements public. 

Consequently, Prof. Beets has gained access to 14 CKF contracts with universities that were established before 2019. But he has discovered some disturbing patterns within these contracts:

  • All contracts specify the creation of an institute or center that aligns with the Cato Institute and/or Ayn Rand philosophies.  (Charles Koch philosophy)
  • All contracts require the establishment of tenure-track positions that align with Libertarian views. (Charles Koch philosophy)
  • Most contracts specify that these tenure-track positions be established in Economics departments and/or Business Schools.
  • Most contracts have identified a specific individual or individuals to manage the established centers or institutes.
  • Most contracts have mission statements that advocate for teaching and supporting political philosophies that call for less government regulation and more free enterprise. 
  • All contracts insist that public disclosure must be approved by CKF.

Prof. Beets stated that the contracts all emphasize and support “academic freedom,” but Beets notes that whereas AAUP supports the role of the instructor as the primary source for decisions involving  academic freedom, the contracts dilute this primary source of decision making by including the university centers/institutes, students, and staff, as well as the instructor, in determining ultimate decisions involving academic freedom and curriculum planning.  

Moreover, Beets noted that when faculty senate learned that CKF proposed a gift to Wake Forest of three million dollars, the Senate voted to establish a task force to review the award.  The task force recommended the rejection of the donation if CKF insisted on its standard terms, which two thirds of the Faculty Senate thought threatened the pursuit of academic freedom, a right of the faculty. Yet the university administration did not sever its ties with CKF, and its contributions to Wake Forest have grown from three million dollars to five million dollars. While this money will support tenure-track positions that espouse CKF philosophy for four to ten years, the university may need to support these professors for the duration of their careers, should CKF withdraw their funding.

*Douglas Beets earned his Ph.D. from Virginia Polytechnic Institute and State University. He is also a Certified Public Accountant, licensed in the state of Tennessee. Dr. Beets has served on the accounting staffs of Armco Steel Corporation, Eastman Kodak Company, Russell & Purkey, CPAs, and Arthur Andersen & Co. He joined the Wake Forest University faculty in 1987 and is a tenured full professor. BEETSHis teaching interests are business ethics, auditing, and financial and managerial accounting principles and his research interests include business ethics, accounting education, accounting for the environment, corporate responsibility, and international corruption. His articles have been published in Accounting Educators’ Journal, Accounting Horizons, Business and Professional Ethics Journal, Business and Society, Business and Society Review, CPA Journal, Journal of Academic Ethics, Journal of Accountancy, Journal of Business Ethics, Journal of Global Ethics, Research on Accounting Ethics, Scientometrics, and other academic and practitioner journals.

–Post by Deborah Bell

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