UNC keeps donor contracts private. But should the public know what’s being promised?
As UNC-Chapel Hill investigates how a high-profile donor contract was leaked to the media, some legal experts say the document shouldn’t be confidential anyway.
They argue that North Carolinians should be able to see what promises public universities are making in exchange for private funding in cases where such deals obligate a public institution to use the money.
Under the state’s public record law, “records and public information compiled by the agencies of North Carolina government or its subdivisions are the property of the people,” unless specifically exempted. The law includes a long list of items that can be exempted, such as trade secrets, individuals’ income tax information or Social Security numbers.
Mike Tadych, a Raleigh attorney specializing in media and First Amendment law, said this week he has scoured the state law in search of a clause that would exempt agreements like the one between megadonor Walter Hussman Jr., the university and the UNC-CH foundation.
“I’ll be damned if I can find anything in the statutes that allows that contract to be exempted from public records law,” Tadych said. “The law is clear that absent a statutory exemption, they’re public records. We can’t find an exemption.”
The Hussman contract, made public by The News & Observer, shed light on the strings attached to the $25 million gift that put his name on the journalism school. The donation also gave Hussman influence — intentional or not — in the hiring and tenure case for journalist Nikole Hannah-Jones that sparked national controversy. The contract also compelled public resources to be used for an inscription of Hussman’s core values on the public building.
The contract says the terms of the agreement will be confidential except as “permitted by Donor or required by law.”
The university’s fundraising campaign is largely supported by gifts made to and managed by fundraising foundations that are private, nonprofit corporations under state law, according to university spokesperson Joanne Peters Denny.
Generally, confidentiality is standard among universities and nonprofit organizations, she said in an emailed statement. And UNC-CH follows ethical policies and guidelines that are widely accepted by the philanthropic sector when dealing with donors and prospective donors.
“This practice is in line with peer university institutions, including the UNC System,” Peters Denny said. “These foundations are not state agencies and their business is not subject to the North Carolina Public Records Act.”
But Tadych, the attorney, said that because the agreements obligate a public university to take some action, such as etching an inscription or naming a building, the fact that they are negotiated in part through a private foundation is moot in in the application of public records law.
Brooks Fuller, director of the North Carolina Open Government Coalition and an assistant professor of journalism at Elon University, also questioned the university’s stance.
“When a public body or a public university enters into an agreement with a third party, unless there is something specific in the public records statute that exempts it, that agreement is a public document,” Fuller said.
Fuller and various media outlets, including the N&O, had asked for a copy of the contract, but UNC-CH denied the request.
UNC’s investigation into the leak
David Routh, UNC-CH’s chief fundraiser and Vice Chancellor of Development, announced an investigation into the “leak of confidential donor information” related to the Hussman contract two days after The N&O published the story about the gift agreement.
Routh said they give donors their “solemn promise to uphold and protect the confidentiality of their gift,” and reports of this leak were “seriously troubling.”
Through this inquiry, UNC-CH seeks to understand how the “protected information” was disclosed and how to institute better practices around these agreements in the future, according to Peters Denny.
About two weeks later, at least two UNC-CH journalism professors and Dean Susan King were asked to meet with university officials to discuss how the confidential Hussman gift agreement was publicly disclosed. The contract circulated among journalism faculty after The N&O made the document public.
The email request for a meeting came from Katie Nolan, chief of staff and executive director of strategy, policy, and special projects in the Human Resources Office, who said Catherine Pierce, assistant vice chancellor and chief of staff for University Development, also would attend.
Journalism professor Daniel Kreiss said at first, he didn’t think much of it because he didn’t have anything to do with the leak and didn’t have access to the document. But he was concerned that this issue was a bigger priority for the university than Hussman’s role in the Hannah-Jones controversy.
“In my eyes a donor trying to influence a hire and tenure at the university and board of trustees level … that’s what should be investigated,” Kreiss said.
He initially agreed to meet, but later backed out after talking to other faculty members. Some of his colleagues suggested he bring a lawyer, record the conversation, review his rights as an employee and prepare questions about the scope of the investigation ahead of time.
Kreiss said he felt like this was “not going to be an innocent inquiry.”
In an emailed response to Kreiss’ questions, Nolan told Kreiss that “University leadership” asked her to gather information about how the gift agreement was disclosed.
Nolan said she was told “by its terms, the gift agreement is a confidential document” and UNC-CH was assessing its procedures for maintaining the confidentiality and security of donor agreements. That includes talking to individuals who may have relevant information to share, she wrote.
Nolan said this inquiry was not being done under any specific formal policy or process at that time because university leaders did not have enough information to determine whether a policy or process had been violated.
“I have been asked to gather information to help in that assessment and to help determine whether different protocols are needed to maintain the security of confidential documents,” she wrote.
Journalism professor Deb Aikat got the same email from Nolan asking to meet with her to discuss how the contract was leaked.
In his meeting, Aikat said he was told they were talking to a lot of people about the issue, as illustrated by the long list of time slots over three days. He also learned the university had reviewed his emails without his knowledge.
They also told Aikat there was no policy violation for leaking the document, he said.
Faculty members do not negotiate contracts with donors, so why is the inquiry targeting faculty members in the Hussman school?
“You have no other message except to create a chilling effect,” Aikat said. “We are a public institution and we cherish transparency, accountability and honesty. So any voice that is fostering such practices should be supported.”
Both Aikat and Kriess have been publicly critical of Hussman’s influence on the journalism school given his donation, particularly surrounding the Hannah-Jones hire. When asked why journalism faculty were targeted in this inquiry, Peters Denny said the university sought out individuals who might know about the access, possession and disclosure of the donor gift agreement.
“Contrary to allegations and suggestions, these discussions have nothing to do with employee speech and everything to do with information potentially relevant to the donor gift agreement,” Peters Denny said in an emailed statement.
Potential influence of private donors
UNC announced in 2019 it would be renaming its School of Journalism and Media for Hussman, who with his family was making a $25 million endowed gift, the largest in the school’s history. Hussman, a Carolina alumnus, is chairman of Arkansas-based WEHCO Media Inc., which owns newspapers, magazines and cable television companies in six states.
The university said at the time that Hussman’s core values of impartiality, credibility and truth would be etched in granite at the entrance of Carroll Hall, home of the journalism school. But UNC did not release the agreement itself, which includes details about how Hussman’s gift will be disbursed.
Media outlets and watchdog groups asked to see the contract after Hussman sent a series of emails trying to dissuade UNC-CH trustees and university officials from offering New York Times journalist Hannah-Jones a tenured position as a Knight Chair in the journalism school.
The argument over whether Hannah-Jones would be offered tenure, as previous Knight Chairs had been and as a faculty committee had recommended, sparked a national controversy about academic freedom, race and gender.
Hannah-Jones directed The 1619 Project for the Times, reframing American history with a focus on the lasting effects of slavery and the contributions of Black people.
UNC-CH’s trustees initially did not vote on tenure for Hannah-Jones, meaning tenure could not be granted. She first accepted the Knight Chair without tenure, then later said the terms were not acceptable. When trustees finally voted on June 30 to extend a tenure offer, Hannah-Jones turned UNC down and announced she would be going to a newly created Knight Chair at Howard University instead.
In campus protests and open letters on social media, students, faculty and alumni said UNC’s treatment of Hannah-Jones was racist and that neither trustees nor a donor, regardless of the size of his gift, should have meddled in the hire.
Since that meddling was made public, some might not be able to trust that future decisions are made in the best interest of the campus, some faculty said.
“We are at a moment now where my colleagues and I see every single decision that’s being made as having a potential donor behind it,” Kreiss said.
They’ll be skeptical if a major new policy is announced or a new dean is hired and the decision-making process is not completely transparent, he said.
“We all have to be under the assumption that a donor had a hand in that,” Kreiss said. “I think we’d be naive not to.”
Reliance on private funding
With cuts to the UNC System that extended far and wide in the early 2000s, campuses have become increasingly reliant on private support.
UNC-CH has been a leader in fundraising and Routh, its chief fundraiser, called donations from individuals and institutions the “lifeblood of Carolina.”
According to the most recent edition of the Carolina Development Annual Report, nearly 60,000 donors from around the world stepped up to support the school during the fiscal year ending June 30, 2020, despite the financial pressures of the COVID-19 pandemic.
According to the report, commitments totaled $565 million, making it the third best fundraising year ever for Carolina. And cash gifts set a new record of more than $424 million.
The donations helped push the “For All Kind: the Campaign for Carolina” to a total of $3.35 billion, making it ahead of schedule in its goal of raising $4.25 billion by Dec. 31, 2022.
The campaign, launched in October 2017, “is the University’s most ambitious in history and among the nation’s largest public university fundraising campaigns on record,” the report said.
Gifts to UNC-CH in fiscal 2020 included the first installment of an $845,000 grant from the Duke Energy Foundation to fund programs promoting science and technology education on campus and an $11 million pledge, later increased to $25 million, by Steve Bell and his wife, Jackie, in support of a new building for the Kenan-Flagler Business School.
According to the report, gifts, private grants and investment income made up 17.4% of UNC-CH’s revenue in fiscal 2020. State appropriations accounted for 16.6%.
As it stands now, faculty, students and taxpayers don’t know the terms of those gift agreements. And until the university changes that practice, or is challenged legally, the donor contracts that partially fund the state’s public institutions will continue to be kept secret.
This story was originally published August 11, 2021 at 11:39 AM with the headline "UNC keeps donor contracts private. But should the public know what’s being promised?."
