Dive Brief:
- Temple University is terminating a $55 million gift — the largest in the institution’s history — by mutual agreement with donor Christopher Barnett. Barnett, a healthcare entrepreneur and alumnus, has also stepped down from the university’s board, Temple leaders said Tuesday.
- Unsealed court documents show that Barnett’s autism clinic company, the ABA Centers of America, is under federal investigation for alleged fraud and money laundering.
- Barnett “strenuously denies” the allegations and “intends to defend vigorously” against them, according to Temple board Chair Mitchell Morgan and President John Fry. But the university is nonetheless canceling the gift, which would have endowed Temple’s public health college.
The impact: No payments had yet come due on Barnett’s gift, which was announced last October. While the university had already begun referring to its public health program as the "Barnett College of Public Health," it has since reversed the name change.
“We are grateful that Mr. Barnett has expressed a desire to avoid any negative impact on Temple,” Fry and Morgan said Tuesday. They also noted that Barnett has "cooperated with the university through this difficult process" despite also recovering from a “life-threatening medical event.”
They reassured stakeholders that the public health college “remains one of Temple’s strongest academic units” and is still a priority for the university despite the termination of Barnett’s multimillion dollar gift.
The funds would have in part provided $20 million to an autism lab at Temple, according to the student newspaper Temple News. Last year, Barnett donated $1 million in seed funding to the lab, which was then named after his company.
The Context: The federal investigation into fraudulent billing practices at ABA Centers of America, which Barnett founded in 2020, gained public attention last week following coverage by behavior analyst Samantha Parnham in her newsletter, Reinforcement & Ruin. The federal criminal investigation follows multiple lawsuits against Barnett’s company over its billing. In one such case, the grocery chain Publix and ABA Centers of America are suing each other.
Barnett's ties to Temple long predate his $55 million donation being announced.
The university initially rejected Barnett's application, but he got in after pledging to an admissions counselor he’d one day give back to Temple, according to a since-deleted post on the university’s website.
He became a member of the university's governing board last May and had earlier served on the board for Temple’s public health college.
What we’re watching: The loss of Barnett’s gift is without doubt a financial blow for Temple, given that it was a record-setting donation. The cancellation “does not diminish the philanthropic momentum and strength of Temple,” Fry and Morgan said, pointing to a record fundraising year even without the gift.
While a university spokesperson did not immediately respond to questions Wednesday, the public health college will very likely have to make financing or spending adjustments to account for $55 million that won’t be there after all.
