Dirty Money: From Rockefeller to Koch

Catholic University's decision to accept $1 million from the Charles Koch Foundation to support the study of "principled entrepreneurship" is like a modern-day reenactment of 1905's "tainted money affair."
An illustration from an April, 1905, Puck magazine shows John D. Rockefeller "purifying" his donation to a clergy member. (Library of Congress)

Last November, the Catholic University of America announced a pledge of $1 million from the Charles Koch Foundation to support the study of “principled entrepreneurship” at the university’s new business school. As the billionaire funder of various libertarian causes and much of the Tea Party movement, Koch (along with his brother David) is not exactly a stranger to controversy. But his foundation has made gifts to many educational institutions in the past—its website lists 270 colleges and universities it supports, including more than two dozen Catholic schools—with only the occasional stir of opposition. And so he might have assumed that his gift would be met with a press release and that mild mix of gratitude and entitlement with which the public now greets most seven-figure gifts to educational and cultural institutions. After all: Who doesn’t like principled entrepreneurship?

Yet, this time, the gift to Catholic (CUA) caused more than a stir. In fact, from a significant swath of the broader Catholic community it provoked something close to outrage. As things stand today, the outcry hasn’t managed to scuttle the donation. But it has the chance to do something even more important: to renew a vital and century-long debate about the terms of philanthropy itself.

There are two reasons why Koch’s gift did not slide tranquilly into Catholic’s coffers. One is that CUA holds a unique status among American institutions of Catholic higher education; both because of CUA's national profile and because U.S. bishops founded it and sit on its board, American Catholics tend to be especially defensive about its reputation. The other is that Koch’s gift coincided with a moment of mounting confidence among Catholic progressives, who have found an ally in Pope Francis. In fact, just a little more than a week after CUA announced Koch’s donation, the Pope issued his first major public pronouncement, denouncing the “deified market,” the folly of supply-side economics, and the “new tyranny” of unfettered capitalism. Here, it seemed, was a call for principled entrepreneurship that placed Koch’s libertarianism directly in its sights.

Soon after news of the gift broke, Catholics Scholars for Worker Justice, in partnership with a progressive Christian organization, Faith in Public Life, issued a statement, signed by 50 leading Catholic educators (including several from CUA itself), expressing “serious concerns” about the donation. “While the Koch brothers lobby for sweeping deregulation of industries and markets,” they wrote, “Pope Francis has criticized trickle-down economic theories, and insists on the need for stronger oversight of global financial markets to protect workers.” The University should leave no doubt that it stands with the Holy Father. “We are concerned that by accepting such a donation you send a confusing message to Catholic students and other faithful Catholics that the Koch brothers’ anti-government, Tea Party ideology has the blessing of a university sanctioned by Catholic bishops.” They cited the Kochs’s opposition to the expansion of Medicaid, hostility to public unions, and support for global warming denialists. (They also gestured toward past allegations that Koch had meddled with academic content and faculty-hiring decisions in a prior donation to another university). An affiliated group, Faithful in America, launched an online petition urging the school to return the money; it has since collected more than 33,000 signatures.

CUA’s administration was not impressed. In a testy statement, the university brushed aside any insinuation that Koch would have—or had sought—control over hiring decisions. And it slammed the protest for its double presumption—both in determining which sorts of philanthropic gifts were worthy of respect (the educators had praised the Kochs for their cultural philanthropy even as they cast suspicions on their support for educational institutions), and in instructing Catholic University on social teachings that were far from settled. (Andrew Abela, the business school’s dean, responded to the protest by calling into question the Church’s support for public-sector unions and by arguing that, though Catholic social thought affirmed environmental stewardship, it did not insist that “if you question global warming or climate change that’s a sin.”) The campaign, the administration declared, was simply “an effort to manufacture controversy and score political points.”

In case there was any doubt about the matter, two weeks ago, Catholic’s president John Garvey and Dean Abela confirmed their decision to keep the gift in an op-ed in the Wall Street Journal. “[I]t would be an unhealthy precedent for a university to refuse support for valuable research because the money, somewhere back up the line, once belonged to a donor whose views on other subjects were unpopular within the academic community,” they declared.

This might be the end of this current controversy. But we should expect similar ones in the years to come—at least if history is any guide. We are living, we are frequently told, in a new Gilded Age. The historical parallel is carted out most often in discussions of the nation’s mounting income inequality or of the populist backlash that has accompanied the trend—phenomena that distinguished the decades bracketing the turn of the last century as well. 

The age’s more welcome associations are also invoked, with references to the flowering of modern philanthropy, the emergence of major public benefactors like John D. Rockefeller and Andrew Carnegie. In their place today we have Bill Gates and a corps of social entrepreneurs flush with tech and finance wealth and the willingness to siphon off some of it toward the public good. There is yet another hallmark of the Gilded Age, a product of these others, that also marks our own: the development of a robust public debate about the relationship between the giver, his gift, and the public’s responsibility in policing it.

* * *

In fact, the controversy at Catholic University strongly echoes another that broke at the turn of the last century and that first catapulted that debate into public prominence. It began in March 1905 with the announcement of a contribution of $100,000 by John D. Rockefeller to the American Board of Commissioners for Foreign Missions, the missionary arm of the Congregational Church. Rockefeller, the Standard Oil magnate whose ruthless pursuit of corporate consolidation was matched by his embrace of a homely Christian piety, was at the time one of the richest and most hated men in America. And so, when news of the gift spread, a faction within the denomination quickly rose up to denounce it and insist that the American Board return the money.

The faction was led by a Congregational minister from Columbus, Ohio, named Washington Gladden, who a decade before had targeted a Rockefeller gift to the University of Chicago by railing against “tainted money.” Now the phrase became the protesters’ watchword. Standard Oil, they declared, “stands before the public under repeated and recent formidable indictment in specific terms for methods which are morally iniquitous and socially destructive.” In order for the Church to serve as a “moral educator,” and to “arouse the moral reprobation of the general conscience” against its grossest offenders, it must “stand entirely clear of any implication in the evil it is set to condemn.” The acceptance of a gift from John D. Rockefeller compromised this obligation, for it involved the Board “in a relationship implying honor toward the donor.”

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Benjamin Soskis is a fellow at the Center for Nonprofit Management, Philanthropy, and Policy at George Mason University. He is the co-author of The Battle Hymn of the Republic: A Biography of the Song that Marches On.

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