The University of Kentucky’s Gatton College of Business and Economics will receive a $12 million gift from Papa John’s Pizza founder and CEO John Schnatter and the Charles Koch Foundation, officials announced Tuesday.
Roughly $10 million will be used to create the John H. Schnatter Institute for the Study of Free Enterprise at Gatton. In addition, $2 million will give Schnatter naming rights for the central atrium in the Gatton building, which is undergoing a $65 million renovation.
Schnatter, who lives in Anchorage, has traditionally given to athletics at the University of Louisville, but earlier this year, he and the Koch Foundation — financed by billionaire industrialist Charles Koch — teamed up for a similar gift to focus on free enterprise at U of L. A combined $6.3 million gift created the John H. Schnatter Center for Free Enterprise at the U of L College of Business.
In a statement, Schnatter said he was excited to establish the institute.
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“The free-enterprise system is the greatest mechanism mankind has ever created to eliminate poverty, enhance prosperity and enable the pursuit of happiness,” he said. “Entrepreneurship is critical to unlocking the power of the free market system. We’re proud to support this effort to educate the next generation about free market principles and equip aspiring entrepreneurs with the know-how to launch successful businesses.”
Previous Koch Foundation gifts to higher education — which often focus on the benefits of capitalism — have ignited controversy because of concerns over academic autonomy. For example, the contract for a similar gift at Florida State University had to be rewritten after faculty and students expressed outrage that the foundation could influence hiring and programming.
Anita Levy of the American Association of University Professors said academics are always concerned about “any donor that would dictate terms for the donation that might affect academic freedom — who would have to be in charge, what kind of hiring was done, whether there were any contingencies related to faculty activities.”
Earlier this month, the Board of Trustees at Western Carolina University in Cullowhee, N.C. voted to accept $2 million from the Charles Koch Foundation to fund a free enterprise institute despite a 21-3 vote by the faculty senate opposing the donation.
Donations to higher education by Koch, who also donates heavily to Republican causes, have prompted student activism, including the group UnKoch My Campus, which documents Koch donations to universities.
“Despite the very small amount of documentation available, we have found significant evidence of donor influence that violates academic freedom and defies faculty governance, sometimes against the expressed will of the faculty, signed into place by increasingly political administrators and governing boards,” said Ralph Wilson, a member of UnKoch My Campus.
Full details of the gift to UK are not yet available because the final agreement is not yet final, UK officials said. The gift was approved by the UK Board of Trustees Tuesday afternoon; the institute must also be approved by the University Senate.
UK spokesman Jay Blanton said the agreement requires the two donors to be notified every time a request for information about the gift is made under the state’s Open Records Act.
With any gift we get, it’s imperative to support faculty, it’s imperative to have academic freedom and academic independence.
Gatton College of Business and Economics Dean David Blackwell
However, UK officials said they will be fully in control of the institute, which will study the benefits and pitfalls of capitalism.
“With any gift we get, it’s imperative to support faculty, it’s imperative to have academic freedom and academic independence,” said Gatton Dean David Blackwell. He said the institute’s name includes the phrase “the study of,” not “for” free enterprise.
“We’re going to take a scientifically rigorous approach, use research to inform our methods and let the data speak,” Blackwell said. “We hope by taking this rigorous academic approach that we will appear in the very top journals.”
The money will allow Gatton to hire five new teachers: one tenured faculty member, three tenure-track faculty members and one senior lecturer. It will also be used to finance graduate fellowships and guest speakers.
“The feeling of the faculty is that we’re provided an opportunity to hire additional faculty, which we desperately need to teach and engage in valuable research,” said William Hoyt, chairman of the Gatton economics department. “We’re completely in control of hiring and promotion, and we’ll just treat it like a regular position. As it was discussed, we feel pretty comfortable.”
The gift will continue the work started by a $2.5 million gift from BB&T that became the BB&T Program for the Study of Capitalism. John Garen, the BB&T Professor of Economics, will probably head the new institute, Blackwell said.
Blackwell said the Koch Foundation wanted Schnatter to receive recognition for the gift, but foundations led by the Koch family are better known for their higher education funding. A Dec. 15 report from the Center for Public Integrity found that in 2014, two Koch foundations gave $23.4 million to colleges and universities. Most of those donations are spent on free market programs.
John Hardin, director of university relations for the Koch Foundation in Arlington, Va., said the foundation supports more than 300 colleges, donating to a variety of causes.
“We’re interested in all ideas and questions about what enables human beings to prosper,” he said in a phone interview. “We believe 100 percent in academic freedom, in academic inquiry. You have to allow folks with the best knowledge to pursue these ideas. ... It’s truly about the marketplace of ideas.”
Any political scientist worth his or her salt knows the terms free enterprise and the free market is a really distorted representation of America’s corporate political economy. The clear intention of the Koch Brothers is to advance a very simplistic understanding of our complex corporate global economic system.
Political science professor Ernest Yanarella
Gifts with strings attached can cause controversy. In 2009, coal executive Joe Craft helped raise $8 million to build a new basketball player dorm at UK, but he required that it be named the Wildcat Coal Lodge and include a tribute to the history of coal mining in the lobby. That resulted in famed author and UK alumnus Wendell Berry pulling his archive of papers from UK in protest.
Faculty trustee Robert Grossman said he understood that “the agreement was written very carefully to make sure the donors do not have control over academic content, and so we welcome their donation.”
But former faculty trustee and political science professor Ernest Yanarella said he was unhappy with the gift.
“Any political scientist worth his or her salt knows the terms “free enterprise” and “the free market” is a really distorted representation of America’s corporate political economy,” he said. “The clear intention of the Koch Brothers is to advance a very simplistic understanding of our complex corporate global economic system.”
Yanarella said he was “quite concerned about the subtle repression of free debate on this campus and the tightening bonds between corporate and academic world — how that linkage really skews the power of corporations over our academic institutions.”