Billions in Foreign Gifts to American Universities Go Unreported by National Association of Scholars

Without enforcement, colleges and universities slip transparency and fiduciary responsibility and open American institutions to foreign coercion through billions of ghost dollars.

“Higher education is awash with conflicting interests,” said NAS Fellow and report author Neetu Arnold. “To fund new programs and projects, to compete for a limited number of students, and fund bloated administrations, schools accept large amounts of taxpayer funds. Universities also search for partnerships and grants abroad, sometimes from adversarial governments. These grants and payments come with stipulations. One stipulation, Section 117, requires that universities disclose foreign gifts to the Department of Education. Yet, many universities fail to do so, even when threatened with extensive and embarrassing investigations.”

Shadows of Influence is built upon our Foreign Donor Database, the product of hundreds of public records requests. The database contains partial or complete information on foreign funds from more than 70 universities and provides a rough sample of American higher education. Through the analysis of our database and the data collected by the Department of Education (ED), we conclude that colleges and universities severely underreport foreign gifts.

“It is clear that for decades, both the ED and universities ignored Section 117 disclosure requirements,” continued Arnold. “It would be unsurprising if we didn’t see any deviation from the expected reporting amount, but what we found was jaw-dropping.”

By using public records requests, we compiled the amounts of reported and unreported foreign gifts to universities. We found that from 2010 to 2016, universities failed to disclose some 54 percent of all reportable gifts. During the Trump administration, particularly after the ED’s investigation found $6.5 billion in unreported foreign funds, disclosures by universities far exceeded the total amount we could find by records requests by $1.7 billion. Under the Biden administration, universities returned to the status quo—underreporting gifts by at least 39 percent.

“Worse,” explained Arnold, “once universities knew the Biden Department of Education would no longer investigate underreporting, some universities stopped reporting altogether. And to add insult to injury, the ED closed the public portal created by the ED under Trump.”

Section 117 is an important, if lesser-known, part of the Higher Education Act. It allows the public and lawmakers to examine the investments that foreign nations, especially adversaries, make in American education. Yet, without enforcement, the law fails to provide these safeguards. Shadows of Influence offers four recommendations for policymakers to improve foreign funds transparency in higher education:

1. Make donor names visible to the public;
2. Make each gift’s purpose visible to the public;
3. Regularly audit a random sample of universities for foreign funds disclosure compliance;
4. Penalize universities that fail to disclose their foreign funds.

“When American college students stump for foreign terrorist organizations and authoritarian governments, we must wonder where and how they receive such propaganda. The hundreds of millions spent by Qatar, Saudi Arabia, Iran, China, and Russia are a good place to begin the search. Section 117 could help lead the way should the desire to strengthen American security and better American education overcome the lobbying power of higher education and foreign governments,” concluded Arnold.