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British Columbia Donors not overly alarmed by UBC president Arvind Gupta’s resignation

University of British Columbia spent $350,000 on the search to find a new president before Dr. Arvind Gupta was chosen.

Martin Dee/UBC

Many University of British Columbia donors met president Arvind Gupta during his year heading the institution and liked his ideas.

Several of the biggest contributors – including developers Peter Wall and Michael Audain and businessman Peter Dhillon, who among them have given tens of millions to UBC – say Dr. Gupta's abrupt resignation in August, and the mystery swirling around it, will not affect their future giving.

Their levels of concern about the controversy differed, however. Some were phlegmatic about what they saw as a power struggle that Dr. Gupta lost. But, in a sign that the university will need to take care how it steers through the controversy, some expressed discomfort at what has happened and the lack of information.

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That is a warning for UBC, where donations from alumni and others are a strong pillar of the financial structure. The school received $204.3-million from donors in 2013-14, its most recent report said, and had a total of $1.1-billion in endowment investment on its books by the end of that year.

Mr. Wall, a property developer, said he was not alarmed by the surprise resignation.

"[Dr. Gupta] told me he was a numbers person, and he told me he wanted [all the departments of the university] to be more accountable. But he was too brand new and he didn't get the support," said Mr. Wall, who gave UBC one-third of his real-estate company in 1991 to finance the Peter Wall Institute for Advanced Studies. That donation is now worth $100-million.

Mr. Wall was reflecting the view of several insiders at UBC that Dr. Gupta tried to get more control over the money that deans now direct and had not built up the political capital on the board of governors or elsewhere to take on such a powerful group.

Other donors say they know little about what is going on, but still have faith in the university and its people. UBC's decision to bring former president Martha Piper back as interim leader was especially reassuring.

"Like a lot of people, I'm concerned," said Mr. Audain, a prominent real-estate developer and art collector who has given more than $10-million to UBC over the years. That includes $5-million for the construction of a new fine-arts building that bears his name, as well as a donation to the university's Museum of Anthropology. "I just wish the university well and I think the university is going to very safe under [Martha Piper's] management."

David Cheriton, a founding Google investor who teaches at Stanford University and donated $7.5-million to UBC's computer science department while Dr. Gupta was president, echoed that.

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"It is a little concerning that there is no public explanation and some disturbing speculation. However, I don't see it having an effect at the level that I am supporting," Dr. Cheriton, who gave $2-million to UBC in 2010 as well, said in an e-mail.

Venture capitalist Hari Varshney, Ocean Spray chairman Peter Dhillon, and a representative of Nature's Path founders Arran and Ratana Stephens also said their support for UBC is unchanged.

"My support will always be there," said Mr. Varshney, who has donated to a career centre at the Sauder School of Business, as well as scholarships and the Centre for India and South Asian Research. "I would like to know what happened. I thought Arvind was doing a great job. He wanted to make it really research-oriented. But Martha is now coming and I know her very well."

Mr. Dhillon, who has given about $6-million to UBC for such things as research into the disease that killed his father, pulmonary fibrosis, and a Centre for Business Ethics, also praised Dr. Gupta.

"I really like Arvind. I was sad to see him go." But he said UBC has many good people and his working relationship at the university is with the dean of the Sauder school.

One donor who expressed more concern was Allan Eaves, the founder of the successful biotech company Stemcell Technologies, who told a media outlet he was disappointed that Dr. Gupta was gone just as he was about to hit his stride with new plans. Dr. Eaves did not return a call from The Globe and Mail.

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The university says it has not seen any signs yet of other donors shying away, but acknowledged some effects are possible.

"It's probably too early to gauge any impact, but we have not seen a huge reaction directly related to giving," Richard Fisher, UBC's communications officer with development and alumni engagement, said in an e-mail. "Donors give to the things they care about, and those things don't typically change. Leadership is important, however, and any kind of instability may have an effect. Too early to tell."

Besides the financial hit if donors are put off by the mess, the short reign of Dr. Gupta has already cost the university money and will lead to further expenses.

UBC spent $350,000 on the search to find a new president before Dr. Gupta was chosen, including travel and meeting costs, said the university's communications branch. (According to UBC's financial statements, $157,500 of that went to the search firm Spencer Stuart.) A year later, the university must undertake these expenses again.

It paid $354,000 in severance to the vice-president of finance, Pierre Ouillet, after Dr. Gupta moved him out of that job as one of his first major personnel decisions.

University financial statements indicate that other people who left during Dr. Gupta's tenure, a woman who had been working in the president's office and the vice-president of communications, were paid $60,000 and $40,000 more than the norm for the time they worked, based on their salaries of the previous year. UBC lawyers said it could not provide details, for privacy reasons, on whether that was severance or accumulated vacation time.

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Dr. Gupta will receive his president's salary of $335,000 for the next year while he is on a leave from teaching to rebuild his academic career. He got $9,000 in expenses when he moved to the president's house on campus and will get the same again when he leaves. That may not be for a few months, as the university acknowledges the housing market is difficult these days and it may take time for him to find another place.

UBC's current vice-president of finance, Andrew Simpson, said the university has contingency money built in for unexpected events.

"In any given year, we get surprises from all sorts of directions. The implications from this are really minimal."

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