A Bribe or a Gift

The Varsity Blues scandal involves 34 parents who were charged last March with paying money to get their children into college and to receive help to improve scores on college admissions exams. Fifteen of those parents have pleaded guilty to fraud. One of them, actress Felicity Huffman, apologized and admitted to paying $15,000 to have her daughter's SAT exam score artificially inflated. She has been sentenced to two weeks in prison and is to report in later this month. Unlike Huffman, another actress, Lori Loughlin, and her husband, the designer Mossimo Giannulli — who parted with $500,000 — are planning to fight it out in court. They plan to argue that the money they paid to get their daughter into the University of Southern California wasn't a nefarious bribe, but that it was instead an act of altruism.

Loughlin's attorney, William Trach of Latham & Watkins, contends that the money the government calls a bribe was really a charitable donation. "Checks were made out to USC Athletics and to a fund at USC," he says. "Those checks were cashed by USC." Trach's logic, apparently: the money was sent to a charity and the charity put the money into its bank account; therefore, it was a charitable contribution.

There's more to the Varsity Blues scandal — much more — but your question centers on something that might not be able to be proven in a court of law, but which is central to ethical decision-making. It also involves a slippery-slope consideration, as many parents support the colleges their children apply to, even before the application is submitted.

I acknowledge that a pure heart isn't the only thing driving many charitable contributions. Buildings and programs, for example, are often named for donors, a public recognition of their generosity. And there's no issue with that — not with the IRS and not with the public. But where do we draw the line between a public accolade and a more tangible quid pro quo — a favor or advantage granted or expected in return for something? If Loughlin's defense goes down the road of altruism, it will have to jump over the hurdle of both the timing of the payment — at this point it's difficult to call it a gift — and the quo relative to the quid.

As of now, it appears that in the gift vs. bribe argument, evidence for the bribe is stronger. Further, for broader reasons than bringing a group of parents trying to game the system to justice, it's important to know the difference. Philanthropy has entered an era of unprecedented scrutiny of motive, while at the same time nonprofits are asked to show their impact. Our sector must be vigilant; we cannot afford to let charlatans, without charitable motive, to falsely define the narrative of what doing good means.

This may not be the ultimate or best answer, but this comes to mind: Your university might establish a policy not to accept any gifts from prospective parents, even from those who already have children attending. If the prospective student's parent is an already generous alumnus or alumna of the school, then make it clear that no further gifts will be accepted once an application has been received.