How important are the views of wealthy donors?

A recent kerfluffle in academia over an academic appointment made – and then unmade – by the University of Illinois to an academic who was accused of anti-Semitic tweets has raised the question of just how much influence big donors have over matters that traditionally were in the sole purview of the faculty and academic administration:

As news spread in late July about a new University of Illinois faculty hire and media outlets began publishing some of his profanity-laden tweets, a number of wealthy donors threatened to stop giving money to the university, recently released documents show.
The letters about professor Steven Salaita started arriving in Chancellor Phyllis Wise’s inbox July 21, and the writers did not hold back.
“Having been a multiple 6 figure donor to Illinois over the years, I know our support is ending as we vehemently disagree with the approach this individual espouses,” wrote one UI business school graduate.
“I have consistently believed that our flagship state university is a treasure that deserves our continued support and contributions. No more. We will now cease our annual contributions to the university and will let our fellow alumni know why we are doing so,” wrote another graduate.
Here are exchanges (an 8MB, 280 page pdf) about Salaita, released by the UI under the Illinois Freedom of Information Act.
The writers included university alumni, donors, students, parents of students and members of the Champaign-Urbana Jewish community. Most were furious to learn that Salaita was to teach classes this fall on the Urbana-Champaign campus. More than one said they would stop financially supporting the university.
The letters provide a glimpse at the pushback the university received from various constituents about Salaita, whose angry tweets about Israel’s invasion of the Gaza Strip have drawn widespread attention. The letters from donors, some of them identifying themselves as members of the UI’s $25,000-plus “presidents council,” have also raised questions about the motivation behind the administration’s decision to not forward Salaita’s name to the board of trustees for formal approval last month.
The chancellor, however, through a spokeswoman, maintains her decision was not influenced by them, but was based out of concern for the students, campus and community.

This has led one academic blog to worry about the implications of this influence:

…most people, including, I suspect, most academics, don’t realize how important rich people are to the running of universities. Some months back, I was able to listen in on a conversation including a college president (not my own), and was startled to discover how much time the president spent managing relations with the Board of Trustees. Being a board member usually involves a two way relationship. As a trustee, you get some social kudos, and some broad-scale influence over how the university is run. In return, you are expected to give the university a lot of money. Relations with rich donors who aren’t on the board are somewhat similar, albeit less organized – again, there’s an implied quid pro quo, and the implicit or express threat if if you, as a rich donor, don’t like something that the university is doing, the money will dry up. While you do not have any veto, influential officials in the administration will listen – very carefully – to what you say, and be likely to represent on behalf of your viewpoint in internal discussions.

I’m surprised that anyone finds this surprising. “He who pays the piper calls the tune” is not a new phenomenon. But it’s true that academia, in particular, has traditionally viewed itself as above what they apparently view as a rather grubby reality, even though the influence of corporate donors and sponsors on the kind of research that science and engineering departments do has increased greatly over the past few decades since the height of government funding during the Cold War.
I found it especially  interesting, though, that this academic was startled by how much time a college president spent “managing relations with the Board of Directors.” Of course many of them likely are wealthy donors as well. But I would bet that the “managing” had less to do with donations and more to do with what boards are supposed to do, which is governance.
This is a mistake that lots of orchestra musicians make as well. Boards aren’t just about raising money, and a good Board isn’t just a bunch of people willing to give lots of money to the institution, although of course the Board needs to set an example. Boards fundamentally are about governance and making decisions. Only slightly secondary is the role of the board in helping the staff do their jobs; not by micro-managing but by providing advice and different perspectives.
All of this makes the role of an orchestra CEO more about dealing with the board, and less about dealing with operational questions, than most musicians think. My orchestra recently hired a chief operating officer precisely for this reason; to free up our CEO to do more work with the board and to enable him to take better advantage of what the Board has to offer in terms of board members’ relationships in the community.