Great Dome of the Massachusetts Institute of Technology, Cambridge, Massachusetts/photo by Wangkun Jia/Shutterstock.com

Funding from disgraced financier Jeffrey Epstein, a convicted sex offender who took his own life in August while imprisoned on new charges, has raised serious questions for general counsel at universities around the country about how to handle reputational risks from tainted donors.

Nowhere have those questions hit harder than at the Massachusetts Institute of Technology in Boston where the school's president, L. Rafael Reif, said Thursday that a probe has found links to him and his senior administrators from Epstein donations.

Reif had asked general counsel Mark DiVincenzo, who could not be reached for comment Thursday, for the probe in a Sept. 7 campus memo. DiVincenzo, who also oversees the school's risk management and compliance units, retained the Goodwin Procter law firm to conduct an independent investigation into the Epstein links.

The law firm presented a preliminary update Wednesday night to MIT's executive committee. Neither DiVincenzo nor the school returned messages Thursday seeking comment.

But in a new memo Thursday, Reif said Goodwin Procter found that he apparently signed a 2012 thank-you letter to Epstein for a donation made to a professor. Reif does not recall signing the letter.

The update included the thank-you letter as well as information that senior members of his administration were aware of other gifts the school received from Epstein between 2013 and 2017. Goodwin Procter partner Roberto Braceras heads the investigation for the law firm.

Other schools also took Epstein donations. Harvard University has acknowledged receiving a $6.5 million Epstein research gift in 2003, three years before the financier faced sex crime charges. It reportedly did not return the gift. Harvard general counsel Diane Lopez did not immediately return messages seeking comment.

Other schools have faced donor issues as well. Last summer, Purdue University removed the name of John Schnatter from a research center and rejected a pledged $8 million donation after the founder of the Papa John's pizza chain allegedly used a racial slur. Ball State University, Schnatter's alma mater, also erased his name from an institute, returned his gift, and issued a statement condemning racism. Both schools are in Indiana.

Purdue general counsel Steven Schultz told Corporate Counsel the school has a new donor policy that includes a "protection of reputation" clause in major agreements involving the naming of a building or facility. Schultz said, "We will reserve the right to remove a name if the board or other appropriate decision-making authority makes a good-faith determination that, based on a significant change in circumstances, continued use of the name would have a material[ly] adverse impact on the university's good name, integrity or reputation."

In another donor clash, the University of Alabama had a rift with Miami attorney Hugh Culverhouse Jr. over his pledge of $26.5 million to the law school that was named for him a year ago. Culverhouse urged students to boycott the university after Alabama passed a restrictive abortion law. The university returned his money and removed his name from the law school.

Stanford University and the University of Southern California saw their donor policies questioned during the recent national admissions scandal. Harvard has also faced criticism for naming the school's Arthur M. Sackler Museum after another big donor, the Sackler family. One branch of the family founded Purdue Pharma, the maker of OxyContin, which is facing court suits for feeding the opioid crisis.

There is help on the horizon for general counsel seeking donor advice. Bill Stanczykiewicz is assistant dean for external relations and director of the Fund Raising School at the Indiana University Lilly Family School of Philanthropy. He teaches courses on philanthropy and fundraising.

"What we teach, and what ought to be," Stanczykiewicz said, "is before all nonprofits, including universities, fundraise, they should work on a gift acceptance policy that is ratified by the board."

He said the policy should spell out if there are any companies or types of individuals from whom the school will not accept donations, such as convicted criminals, or people convicted of morals charges or accused of racial slurs, or even elected officials.

He said, "Once the fundraising campaign starts, the pressure is on to meet goals. Putting limiters in place before we start can help if something comes along that is contradictory to our values."

He added a pledge or gift agreement is a contract. "Where a general counsel can help is to create that contract in a way that honors both parties, but still provides protection with flexibility should something negative happen with a gift."

His bottom line: "Try to put safeguards in place and have the courage to enforce them before tantalizing large gifts are offered." One key example: "Thou shalt not accept gifts from noted sex offenders," he said.