A few lessons for Tsinghua University on raising funds and naming buildings

PUBLISHED : Saturday, 04 June, 2011, 12:00am
UPDATED : Saturday, 04 June, 2011, 12:00am


Tsinghua University got more than it bargained for with its publicity campaign last month to mark its 100-year anniversary. The university came under the spotlight last week after its No 4 Teaching Building was named 'Jeanswest Building', with the name appearing in shiny Chinese and English characters, along with a line saying that Jeanswest, as a leading casual clothes company, had contributed its share to the nation's education.

It appears that this share did not come cheaply - it is rumoured to be in the region of 5 million yuan (HK$5.98 million). Jeanswest thinks it is doing a good thing at a prestigious university, as it has with other education-oriented mainland philanthropic projects.

But students at Tsinghua and the public have other ideas, and the wave of criticism on and off the web has forced the university to remove the gilded plate from the building. People accused the university of 'selling out', making a 'mockery of education', and failing to honour the 'spirit' of universities.

But, to be fair, universities around the world need donations to survive, and it is not unusual to name buildings and even entire schools after prominent donors. Strolling round the campuses of Harvard, the Massachusetts Institute of Technology and Yale, for example, it is hard to avoid many more esoteric names on buildings than are currently at Tsinghua.

A top-rated university needs to attract talent - both faculties and students - to compete globally. And that needs a lot of money, in the form of professorship endowments, research grants, funds for building and maintaining laboratories and facilities, scholarships for needy students, sports programmes - the list goes on. If one looks at the financing situation at the world's leading universities, it is clear that, for most, public financing and tuition revenue are not usually enough to cover all these expenses, and the remaining tab has to be picked up through private and corporate donations. In some cases, these donations can be huge: Harvard's endowment fund has hit US$37 billion in the past.

Let us be clear on two points about donations. One, we are talking about philanthropy, so they should be made with no strings: the donors should not interfere with the university's operations or any other academic decisions in exchange for a cheque. Second, these donations are not for advertising. Paying millions for a plate on a building wall would be money poorly spent if it was merely meant to attract a look from the few hundred students who pass by each year.

I would say that Tsinghua meets these two criteria. So what is all the fuss about? Apparently, what makes this case different, and has so outraged the public, is the fact that a crown sanctuary of learning in China is now associated with a humble seller of low-cost apparel, which in traditional Chinese values does not command much respect. In other words, it is not so much the naming of a building after a commercial brand per se that has annoyed people, but the naming of a building after a commercial brand not worthy of the university's status. I am guessing the reaction would be very different had the donor been, for instance, IBM.

So it seems that not all donations are created equal: the donor's social status seems to play a role.

Perhaps we should look at how the Haas School of Business at the University of California at Berkeley came about. UC, Berkeley is a much more prestigious university than Tsinghua, and the Haas School of Business a much more respectable name than the No 4 Teaching Building. UC, Berkeley began a big fund-raising campaign for a new building for its business school in the late 1980s. The Walter & Elise Haas Fund made a US$24 million donation, the largest in the history of UC, Berkeley to that date, and the school was renamed the Haas School of Business in honour.

At the time, Walter Haas was the president and chairman of Levi Strauss & Co, a privately held clothing company known for its brand of jeans, and Elise was his wife. In other words, Levi's was a leading low-cost clothing company, not unlike Jeanswest - albeit with a much larger international footprint. But one could also argue that Jeanswest could be called a multinational, with its founding history in Australia, transiting Hong Kong and blossoming into a huge success on the mainland.

What I will say is that it appears the price was too cheap. Haas' US$24 million is, in today's dollars, worth more than US$60 million, or close to 400 million yuan. On that basis, I agree with the public fury.

Ultimately, there is a line that distinguishes legitimate donations from monetising every little piece of property on campus, in which case the university turns into a despicable advertising parlour. Tsinghua has not sunk to that level yet, but the grand fund-raising plan leaked in the aftermath of this controversy suggests it is embarking on a dangerous route.

Maybe Tsinghua should take a look at how the University of Wisconsin at Madison raised funds. After becoming dean of its business school, Michael Knetter went looking for a US$50 million donor in 2002 in exchange for putting his or her name on the school. No one was interested, so Knetter did something radical: look for contributors to pay to keep the school's name off the market. Eventually his plan bore fruit: 13 alumni gave US$85 million for assurances that the business school would not be named for any donor for at least 20 years.

John Gong is an associate professor at the Beijing-based University of International Business and Economics. johngong@ gmail.com