Even the most naive freshman knows the golden rule at Harvard--money makes the University possible, and a lot of it must come from gifts every year. But sometimes the University faces ethical questions over accepting money, and these problems can create some of the most difficult and complex decisions the administration may face.

In his 1979 open letter on cthical problems in fundraising. President Bok explained that these problems fall into two categories. "Disputes occasionally arise, either because donors seek to achieve improper objectives through their gifts or because they have previously acted in a way that seems reprehensible," he said.

There are no absolute criteria for rejecting a gift in either kind of case. However, there are some guidelines for rejecting donations, according to Thomas M. Reardon, director of University Development.

The most obvious reason for rejecting a donation is that was given with ulterior motives. If it appears that the donor is giving only to use the University's status for his own purposes, the University will look at the case very closely.

An example of this kind of problem cited by President Bok is his decision to reject an offer from a military regime in Greece to fund a chair in Modern Greek Studies. Bok believed the government was primarily trying to curry favor with the economically influential Greek-American community and, to this end, hoped to use the gift to Harvard to improve its image in the United States.

Another kind of "improper objective" involves restricted donations. The most important test, according to Bok, is that these restrictions must not intefere with the "four essential freedoms of the university--to determine who may teach, what may be taught, how it shall be taught, and who may be admitted to study."

A donor is not allowed to choose a professor to promote a personal prejudice or a particular school of thought within a field of study." We would not accept a professorship restricted to promoting the values of socialism, the free market system, or any other doctrine. We must reject donations that compel the University to promote a particular set of values or beliefs," said Bok.

The most difficult set of cases involves the character of a donor. These are rare because the University gets much of its money from sources it knows, according to Reardon. In these cases the University must face questions about how the University should decide it will not accept a donation, and how or when the University should serutinize donors.

Consistent guidelines on such matters are somewhat clusive. "To be a notorious public figure is one standard," said Reardon. If a person is a convicted felon or under indictment, his gift is unlikely to be accepted.

Perhaps the hardest cases involve men with shady reputations but who have never been indicted or convicted.

An example of the dilemmas that can arise from fundraising is the case of the Charles W. Engelhard Library of Public Affairs. The Charles W. Engethard Foundation gave the Kennedy School of Government $1 million in 1979 for a public affairs library. The catch was that the man whose name and money grace the foundation had made his money in gold mining in South Africa.

Months of intense student and faculty protests, by those who saw the donation as a endorsement of the apartheid South African regime, resulted in a compromise between the Kennedy School and the Engelhard Foundation. The $1 million was accepted, but the library remains nameless with only a plaque in the magnate's memory.

These cases involve many personal judgments both as to what behavior is cloudy enough to warrant rejection of a gift and upon what evidence and by whom these judgements may be made.

Ultimately, the decision in cases like this lies with the Harvard Corporation, but the basts for decision is consensus within the University. "The right thing is interpreted by a whole group of people including faculty, administrators, the president, and the corporation. Generally that process works very smoothly and is more informal than formal," said Reardon.

Although some extreme cases may warrant refusing a gift, Bok contends in his 1979 statement that most donations fall in the "acceptable" category. "On the whole I would be inclined to accept such donations on the ground that the tangible benefits of using the money for scholarships or faculty salaries should overcome the more abstract, symbolic consideration," Bok writes.

The University should not agree to use the names of donors when it knows that "their lives and conduct are in plain conflict with the values and ideals of the institution," said Bok. However, these judgments must be made with great discretion, and it is generally imprudent to remove someone's name after memorializing him.

University officials claim that it is not practical to investigate potential donors in most cases, and there are no clear principles regarding conditions or criteria for checking up on a donor. The University typically does not pay attention to the background of a donor unless some information comes in the attention of the administration suggesting that the donor is not someone with whom the University would want to be associated, Reardon said.

"Ultimately, the problem is reasonableness," said Reardon. The University tries to weigh what it can do with the money against objections to the donors and makes decisions based on a consensus within the University, he adds.