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Giving Back Meaningfully

Bose’s share transfer to MIT exemplifies responsible corporate investment in universities

By Tarina Quraishi

Student researchers at MIT will soon have acoustic sound systems and noise-canceling headphones to thank for funding their endeavors. On April 29, Amar Bose, chairman of the Bose Corporation, announced that he had donated the majority of stock in his audio products company to the Massachusetts Institute of Technology. Bose earned his bachelor’s degree, master’s degree, and Ph.D. from MIT and served on its faculty from 1956—eight years before he founded the Bose Corporation—until 2001. The university is now the majority owner of the Bose Corporation, but its shares are nonvoting, and Bose remains the chairman of the company. Dividends will be used to “sustain and advance MIT’s education and research mission.” Bose’s decision to confer majority ownership to his alma mater reflects the long history of financial interdependence shared by private universities and corporations. As such, Bose’s contribution sets a precedent of how corporate leaders can exert a positive influence over the universities they benefit.

Major corporate investments should reflect a genuine commitment to the intellectual goals of the academic initiative being funded. Larry Ellison, CEO of enterprise software giant Oracle Corporation and the fifth richest person worldwide, made headlines in 2006 when he reneged on a promise to donate $115 million to Harvard. The gift, which would have been the largest donation from a single individual in the University’s history, was intended to fund the establishment of a Harvard-affiliated global health foundation. Ellison’s change of heart came after Larry Summers stepped down as the University’s president. “It was really Larry Summers' brainchild and once it looked like Larry Summers was leaving, Larry Ellison reconsidered," an Oracle spokesperson told CBS News. The Oracle case demonstrates the volatility of planned corporate investments based merely on personal relationships between CEOs and university administrators. In retrospect, Ellison’s business focus on enterprise technology seems to have had little connection to the global health initiative he had planned to fund at Harvard. In contrast, the Bose Corporation’s emphasis on technology development aligns with its plans to sponsor MIT research.

If corporate leaders plan to devote a portion of their company’s profit to an academic institution, the university or project receiving funding should be of personal significance to them. Notably, Harvard produces more CEOs than any other university in the country, and its endowment—funded in large part by alumni donations—gives Harvard a reputation as one of the world’s wealthiest institutions. As demonstrated by Bose, alumni and faculty enjoy an in-depth understanding of a university’s goals and, in result, how best to fund them. Bose’s choice to donate shares to MIT, rather than a one-time monetary gift, ensures sustained research funding for long-term projects. Moreover, Bose can exercise the influence of his substantial relationship with MIT to make certain that his company’s dividends are rightfully utilized to fund research, holding the university accountable.

Finally, corporate-university partnerships must be of mutual, but fair, benefit. Corporate investments are too often the harbingers of skewed research leading to disproportionate corporate gain. Universities, in need of research funding due to federal budget cuts, accept corporate sponsorship, but the private funding is sometimes accompanied by a dominating corporate presence that dictates the nature of university research, policy or action. For a prime example, look to recent controversy over pharmaceutical investment in top medical schools, which prompted Harvard Medical School to enact policies to limit pharmaceutical sponsors’ marketing presence at its continuing medical education conferences, among other accountability measures, earlier this year. The Bose case illustrates how a company can benefit without compromising the goals of its benefactor university. By transferring majority ownership to MIT, the chairman of Bose may be guarding his original vision for the company against competing interests, making it difficult for the Bose Corporation to go public in the future and solidifying its emphasis on research, while possibly taking advantage of gray areas in tax codes. Despite these corporate benefits, the details of the share transfer that have been disclosed thus far exhibit little potential for compromising MIT’s research or academic aims.

In fiscal year 2010, corporate donations accounted for 17 percent of the approximately $600 million donated to Harvard. Fostering positive ties like that of Bose and MIT, this well-endowed university should carefully review the motives of proposed corporate investments in order to maintain the integrity of its Wall Street alliances.

Tarina Quraishi ’14, a Crimson editorial writer, lives in Hollis Hall.

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