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

The 2019 Meeting of the North Carolina AAUP Conference

On October 4 and 5, the North Carolina State Conference of the AAUP held its annual meeting at the University of North Carolina at Chapel Hill. Rudy Fichtenbaum, President of the national AAUP, and Jasmine Banks, Executive Director of UnKoch My Campus, joined faculty from Appalachian State, UNC-Charlotte, Elon University, Shaw University, Duke University, UNC-Greensboro, North Carolina Central University, and UNC-Chapel Hill. We had lively, productive, and inspiring discussions of intersecting national, state, and campus-specific challenges to academic freedom and of student and faculty resistance to on-going threats.

Rudy Fichtenbaum spoke on Friday night. As UNC-CH professor emerita, Sherryl Kleinman reported in her recent post on Academe Blog, Fichtenbaum emphasized:

 the importance of faculty organizing, whether public employees can [legally] engage in collective bargaining or not. Faculty should recognize threats to academic freedom and shared governance, acting in solidarity against those threats. We can create a “union” of tenure-track, tenured, and non-tenure-track faculty.

Kleinman also summarized the key questions raised by Banks’s Saturday morning presentation, which started by laying out the Koch Foundation’s long-term plan

to turn colleges and universities into the kinds of places that will make students true believers in free-market ideology. As Banks noted, the Kochs have learned to rebrand their efforts so as to hide their overall goal.

Banks’s talk brought to mind two questions. First, will faculty who take money from funders with a clear political agenda find themselves, even unconsciously, shaping their program in ways that keep the donor happy? If donors are displeased, they will stop supporting a program after the initial gift. Second, who would a faculty member or director not take money from? Everyone has a line they will not cross. Medical schools, for example, stopped taking money from the tobacco industry. As Jane Mayer wrote in Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right, the Kochs are among the major funders of climate change denial. Taking money from the Koch Foundation legitimates an organization that denies the major crisis of this historical moment.

Banks and conference attendees focused on two Koch-funded programs already established at UNC-Chapel Hill, a minor and certificate in philosophy, politics, and economics (PPE) and the Center for the Science of Moral Understanding. A Program for Public Discourse was just launched at UNC-Chapel Hill with seed money from a North Carolina donor, the Dowd Foundation, which is also funding a capitalism studies program at UNC-Charlotte. As Banks demonstrated, the justifications for such programs are strikingly similar to those presented by the Koch Foundation (see Frank Dowd’s op-ed in the Charlotte Observer) and offer more paths by which collective faculty control over the curriculum can be circumvented or coopted.

During the afternoon on October 5, a panel of faculty from Appalachian State and Elon University returned to many of Fichtenbaum’s points in their discussions of organizing for salary increases and administrative resistance. The presentations highlighted the importance of solidarity between tenure-track and non-tenure-track (contingent) faculty and of mobilizing public support for faculty.

The conference concluded by agreeing to launch this website/blog where we will periodically post North Carolina AAUP-related news and electing new state AAUP officers:

  • President: Michael Behrent, Appalachian State University
  • Vice President: Michael Frierson, UNC-Greensborough
  • Treasurer: Chet Dilday, Fayetteville State University
  • Secretary:  Richie Zweigenhaft, Guilford College.

Following this successful conference, the North Carolina AAUP looks forward to expanding and protecting academic freedom on campuses across the state.

by Karen M. Booth, Associate Professor of Women’s and Gender Studies, UNC-Chapel Hill and Secretary-Treasurer, UNC-CH Chapter of the AAUP.