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Gus Carlson is a U.S.-based columnist for The Globe and Mail.

The revolt by billionaire donors pulling funding from elite U.S. universities because they believe the institutions did not condemn the Hamas attacks on Israel strongly or swiftly enough proves one thing: Money talks, even on the moral high ground that leaders of academia have often claimed as their own.

In recent days, there’s been a display of a certain hypocrisy among these paragons of higher education, whose leaders have been quick to endorse various social causes in the past and scold corporations behind slogans such as “silence is complicity.” Now these universities have themselves remained silent or dragged their feet in publicly condemning this latest act of terrorism.

Make no mistake, this attack was terrorism. Regardless of where you stand on the Israel-Palestine issue, it’s a fact that Hamas is designated a terrorist group by many Western governments, including Canada’s, and that on Oct. 7 it killed and abducted civilians.

Ordinarily, it’s true these universities do not necessarily need to say anything about each and every aspect of current affairs that have nothing to do with them. But as Ivy League stalwarts Harvard and the University of Pennsylvania are learning, if you have already gone down that path and taken a public posture on social and political issues, beware about commenting only on those you choose. In this case, the “silence is complicity” message they have weaponized on other issues has become a liability rather than an asset.

Corporate leaders should pay close attention to the way this has quickly become a financial and reputational Achilles heel for school presidents and their boards of trustees. The big cheque writers these leaders rely on for their existence – in effect, their customers and investors – are holding up the mirror to them for a change. Harvard and Penn alone stand to lose half a billion dollars or more in funding, based on the donation history of those objecting. And the list is growing.

Among those showing their disgust: Ken Griffin, founder and chief executive officer of Citadel LLC who has given more than US$500-million to Harvard, has pulled back on his US$300-million pledge this year; Jon Huntsman, former U.S. ambassador to China, whose family has donated US$50-million to Penn through 2018, said he will close the chequebook on future donations; and Ronald Lauder, the billionaire heir to the Estée Lauder cosmetics fortune, said he would re-examine his support for Penn because of the slow and tepid response of the school.

Apollo Global Management Inc. CEO Marc Rowan, a graduate of Penn’s Wharton School who donated US$50-million in 2018, called on donors to send just US$1 in protest. Israeli billionaire Idan Ofer and his wife Batia have stepped down from an executive board at Harvard after donating US$20-million to the school.

Some business leaders have taken the protest further. More than a dozen CEOs have condemned college leaders’ failure to denounce anti-Israel campus demonstrations. In an effort to exert leverage on Harvard to speak up about these rallies, billionaire hedge fund manager Bill Ackman, a multimillion-dollar donor, called for protesting students to be identified to ensure he and other CEOs would not hire them.

The revolt is not merely symbolic. Endowments are big business at U.S. colleges and universities. Harvard has the fattest coffers in the country, with an endowment of more than US$50-billion at the end of 2022, according to U.S. News & World Report. Penn’s endowment is more than US$20-billion.

Beyond the financial blows, the reputational bricks flung by donors have been damaging. In a letter to Harvard president Claudine Gay, the Wexner Foundation said it was “stunned and sickened at the dismal failure of Harvard’s leadership to take a clear and unequivocal stand” against Hamas’s actions.

In a letter to Penn president Elizabeth Magill, Mr. Huntsman suggested “moral relativism has fuelled the university’s race to the bottom” and “the university’s silence in the face of reprehensible and historical Hamas evil against the people of Israel (when the only responses should be outright condemnation) is a new low.”

Penn has since said it should have moved faster and with more force to condemn the attacks. Even when Harvard commented, many said its posture was tiptoeing and equivocating.

The cautionary tale amid this turmoil is becoming painfully clear. These universities would not have been in this position if they had simply kept their mouths shut on all the other matters about which they have commented. Perhaps it’s time for companies to stop bowing to the pressure of activists – internal and external – and revisit their predilection to weigh in publicly on social and political issues that have nothing to do with the products and services they sell.

Considering the financial implications of this situation, leaders in academia and the corporate world might adopt a more comprehensive policy like the one embraced by the University of Chicago: Stop commenting completely on such issues that are beyond the scope of your mandates. If you don’t, no one wants to hear you complain about pushback or plead poverty if the money stops flowing.

If you run a university, run it. If you run a company, run it. And leave the treacherous – and increasingly costly – world of pontificating and posturing to others.

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