A clash between two philanthropists and a well-regarded research institute over a $10 million donation highlights the dire financial situation faced by universities and the pressure they’re under to do what donors want.
Christchurch couple Grant and Marilyn Nelson gave the money to the Institute for Governance and Policy Studies (IGPS) at Victoria University of Wellington several years ago, they say so it could carry out work on political party donations and lobbying.
“I wanted to bring this out into the open, but more so the public understood what was going on,” Grant Nelson tells The Detail.
“We didn’t specify what sort of work they actually had to do – the work had to be about lobbying and party political donations – but they were free to decide whatever they wanted to do.”
But the Nelsons weren’t satisfied with the institute’s work and after years of wrangling they’ve reached a new funding deal with the university.
However, that’s put the IGPS on the brink of closure.
“It’s quite alarming,” says Thomas Coughlan, the NZ Herald‘s deputy political editor.
“All sorts of institutes and all sorts of universities in New Zealand have issues like this,” he says, referring to the need for donations to prop them up financially.
Coughlan tells The Detail how he investigated the dispute between the Nelsons and the IGPS, and pieced the story together with the help of more than 130 pages of emails and documents obtained through the Official Information Act.
The IGPS, he says, is not well known outside of academic circles, but is highly regarded in Wellington for its research into the public sector, government and how it could improve.
Despite its reputation, its funding has always be insecure.
“New Zealand universities are pretty poorly funded particularly when it comes to research schools like this,” says Coughlan. The endowment from the Nelsons and their Gama Foundation gave it a secure future.
Coughlan details the legal agreement and how work on donations and lobbying was included in the institute’s charter, which lays out the range of priorities and areas of primary interests for the institute.
“It was never really clear in this document that the family really wanted the institute to focus on these two issues,” he says.
Coughlan says the documents he obtained showed the university’s view was that the obligations in the IGPS’ charter were fulfilled.
Through Gama, the Nelsons have poured millions of dollars into projects they are passionate about, from saving a native forest, to a legal battle over Covid-19 wage subsidies, as well as academic work.
“He and his wife have ruffled some feathers obviously,” says BusinessDesk journalist Greg Hurrell, who wrote about the Nelsons as part of a series on philanthropists and charities.
“But that was his dogged determination to improve governance and also do work for the environment.”
Hurrell outlines the three research projects Gama is funding through a new contestable grants process with Victoria University.
“Certainly Gama Foundation is trying to affect real change in New Zealand as they see it because they are concerned about people with money being able to unduly influence the political process.”
Hurrell says there is a small part of the charitable sector – the individual philanthropists – who want to have a say over how the money is used.
“On the side of the Institute of Governance and Policy, I think it is reasonable that they want to have more freedom.
“As far as the Nelsons go, yes, I think they would have been better off with soliciting for proposals for funding instead of expecting that institute to do what it wants all the time,” Hurrell says.
Grant Nelson tells The Detail that the experience has put him off wanting to make further endowments to universities.
“I have heard that other people have had the same problem as us. It’s perhaps not unusual.
“We’ve had dealings with quite a few different universities and provided funding for different projects and I think it’s probably better to have a grant system rather than provide an endowment with the income going to support the work.”
Jonathan Boston, Emeritus Professor of Public Policy and the first of the institute’s three directors, says it’s his view that each director “faithfully and diligently fulfilled the terms of the institute’s charter, which was agreed with the Gama Foundation in 2012.
“Any suggestion that the research or other activities undertaken by the institute were inconsistent with the charter is incorrect.”
Coughlan says the future of the IGPS is uncertain – it doesn’t have secure funding and the university is consulting on its future.
One of the options, he says, is to shut it down, if there is no money available to sustain it.
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