Colleges and universities need money to operate, more money than tuition and state funding alone can provide, especially for large-scale projects like buildings and athletic facilities. Schools solicit private donations to fill in the gap.

But what is a school to do when a private donation comes from a controversial donor, someone who holds racist views, for example? This is a tricky question faced by schools across the country, including Sacramento State.

As recently reported in The State Hornet, Sacramento-area businessman and philanthropist Charles M. Goethe gave Sac State hundreds of thousands of dollars, beginning in the 1950s and ending as part of his estate left after Goethe’s death in 1966.

According to research done by Sac State professor of social work Tony Platt, Goethe also actively spread ideas that today would be called racist.

Goethe published hundreds of pamphlets, articles and letters supporting forced sterilization of what he deemed society’s “undesirables,” praising the Nazis, and advocating discrimination against Asians and Latinos in real estate and immigration.

Platt found that Goethe’s last recorded donation was to a white supremacist group.

This semester, an online petition started by undergraduate history major Derek Hamilton and signed by many members of the Sac State community urges the university administration to publicly renounce the racist legacy of Goethe by renaming the C.M. Goethe Arboretum on campus and facilitating a public debate over what to do with the remaining monies from Goethe’s estate.

Platt estimates these remaining funds, currently held in the CSUS Foundation, to be worth over $3 million.

Contributers’ integrity analyzed by universitiesThe issue of tainted donors can be difficult for schools, and Sac State is not alone in having to grapple with it.

University development officers are responsible not only for soliciting donations, but also making sure the funds are legitimate, (not the profit of a crime, for example), and ensuring that the values of the donor are compatible with the values of their schools.

“This is very much on the minds of people out raising money for colleges and universities,” said Jonathan Meer, vice president of university advancement at the University of the Pacific in Stockton.

Carole Hayashino, who holds the same position at Sac State, agrees.

“I think these are really important questions for us to discuss as development officers in higher education.”

Schools exercise a lot of control over where donations come from, said Brad Barber, assistant vice president for institutional advancement for the University of California system, because the school almost always solicits big donations.

“You know who you’re asking,” Barber said. “You don’t ask somebody if you’ll be ashamed of taking their money.”

Vince Sales, Sac State’s associate vice president of development, agrees: “Developing that relationship happens over a period of time. You get to know the donor, their beliefs, what they’re interested in … They become good friends of the university.”

But large donations are tempting, making it hard for some schools to say no.

As reported in the Chronicle of Higher Education, Ralph Englestad, an alumnus of the University of North Dakota who made a fortune speculating in real estate and running casinos in Las Vegas, began donating money to his alma mater in the 1980s, culminating in a $100 million gift to finance the construction of a new hockey venue, the Ralph Engelstad Arena in Grand Forks, which was completed in 2001.

Engelstad had been fined $1.5 million by the Nevada Gaming Control Board in 1988 for damaging the reputation of the state by, among other things, celebrating Hitler’s birthday by having parties inside one of his hotels and maintaining a collection of Nazi memorabilia.

Board officials also reportedly found tools inside the hotel used to make bumper stickers carrying the message “Hitler was right.”

A delegation of University of North Dakota representatives went to Nevada to tour Engelstad’s hotel and decide whether the university should continue to accept his donations.

The delegation ultimately decided, despite the findings of the Gaming Control Board, that Englestad was guilty only of “bad taste,” and recommended that the university continue to accept his donations.

The decision, however, was not unanimous. University of North Dakota English professor Elizabeth Hampsted, who went with the delegation to Nevada, did not support accepting Engelstad’s donations.

In a recent interview with The Hornet, Hampsted said, “He certainly was insensitive. He was making a lot of money on Nazi collectibles. He certainly didn’t have any objections to the Nazi point of view. I was certainly opposed to taking his money.”

When asked why she believed her university chose to ignore Englestad’s controversial actions, Hampsted said, “It was the $100 million.”

Sometimes, however, schools are blindsided by a controversial donor, and a case involving Ausburg College in Minnesota offers one solution to the problems of the past.

In 1986 an Ausburg alumnus named Elroy Stock donated $500,000 to the college for new building construction.

The next year, a postal service investigation revealed that Stock had been anonymously sending hate-filled letters to mixed-race couples and parents who had adopted children of a different race than their own.

Ausburg initially decided to return Stock’s money because, as a prepared statement issued by the school said, “It is contrary to Augsburg’s mission and values to accept gifts from someone whose beliefs are directly opposed to our mission.”

But giving the money back would have violated several state rules governing charitable donations. So Ausburg decided instead to use Stock’s money to fund Scholastic Connections, a program that offers scholarships to students of color.

Platt supports a similar redirecting of Goethe’s money still left at Sac State.

“How those material legacies will be used is very relevant and important,” he said and suggests the money could be used to fund scholarships in social justice or ethnic studies. Platt believes the worst mistake the Sac State community could make would be to ignore Goethe’s legacy.

“He did live; he did leave a lot of money to this university; he was involved with this university in a very active way from the early days,” Platt said. “He’s a part of our institutional history. I think we have to address that and deal with it.”