Saturday, February 5, 2011

Quid Pro Quo

A university ranked design and construction firms pursuing projects at the institution not only according to their skill and experience, but also in terms of how much money they had contributed in support of students, either through scholarships or internships. Some in the construction industry shrugged this off as part of the cost of doing business, while others saw it as extortion.

Rising tuition and declining public support for higher education have led many colleges and universities to search for other forms of revenue in order to balance their books. Donations from alumni and supporters of these institutions have become one of the most important sources of additional income, enabling administrators to reduce the cost of attendance through scholarships and enhance the experience of students through internships, among other forms of extra-curricular activity.

Raising money in this way seems like a win-win for everyone. Students receive a more affordable education, donors see the immediate benefit of their gifts, and universities can stretch their already limited funds. The tax laws, at least in the United States, make this an attractive transfer of money from wealthy adults to poor students, while also encouraging investment in our future through support of the best and brightest of our youth.

But what if the donations are not entirely voluntary? What if, as in the case here, gifts to an institution come as part of a quid pro quo in exchange for giving a commission to the individual or firm making the contribution? And does it matter if this “you-scratch-my-back, I’ll-scratch-yours” approach to philanthropy goes to a good cause – financially supporting students in need – or do the ends, however noble, not justify the means?

Philanthropy, of course, always involves a degree of pressure applied by those seeking a gift on those who have the capacity to give. That pressure, though, almost always takes the form of playing upon a donor’s allegiance to the institution, eagerness to help others, or desire to be recognized or remembered in some permanent way. At the same time, there almost always involves some quid pro quo in philanthropy, although that, too, usually involves acknowledging a gift publically, naming something in honor of the donor, or inscribing the donor’s name in some highly visible place.

But when donations to a college or university get linked to doing business there, a ethical line gets crossed. However “voluntary” this may seem, in that a firm has the right not to pursue a business opportunity with the institution, giving a gift in order to compete for work has more of the characteristic of extortion. In a difficult economy, when firms may be desperate for work and unable to walk away from a possible commission, this arm-twisting on the part of the institution becomes even more objectionable, taking advantage of businesses, financially, when they can least afford it.

Situations like this highlight the limits of modern ethics. A utilitarian might argue that ranking firms based on the amount of scholarship money they have given disadvantages a few – the owners of a firm – in order to benefit many – the generations of students who will receive the scholarship. At the same time, a Kantian might argue that the good intention of the institution to help students in need makes this policy acceptable, however objectionable the means of doing so.

But good ends or good intentions do not justify any means, and extortion – even if implicit in a request for proposals – must remain outside the bounds of what we consider ethical. We would, otherwise, quickly create a condition in which bribery and extortion became an expected aspect of trade, a practice that we see happening in some corrupt countries and that has the paradoxical effect of impoverishing everyone as a few try enriching themselves in the process. A world in which no good deed happens voluntarily means that only bad ones will.

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