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  • Writer's pictureSydney Orr

Unethical Donations: Should Misappropriated Funds be Returned to the Source?

Updated: Jan 17

Do colleges and universities have a legal, moral, and/or ethical obligation to return donations that are illegally attained or severely misappropriated? This is the question that the University of Southern Mississippi (“USM”) should be asking considering recent court filings that show that monies received via donations was misappropriated welfare money.


In February of 2020, Mississippi state auditor, Shad White, discovered that $77 million of the State’s welfare funds were “fraudulently diverted from a federal antipoverty program known as Temporary Assistance for Needy Families” (“TANF”).[1] The State then filed a civil lawsuit against 38 defendants.[2] A defendant of note is National Football League (“NFL”) Hall of Famer, Brett Favre.[3] According to court documents, Favre actively worked with John Davis (the former head of Mississippi’s Department of Human Services, a welfare agency), and Phil Bryant (then-Governor of Mississippi) to utilize welfare money to build a volleyball stadium at USM.[4]

Additionally, Favre was largely assisted in finding funds to build the stadium by Nancy New.[5] New ran the nonprofit Mississippi Communication Education Center, and misappropriated millions of federal welfare funds the nonprofit received to Favre, the University of Southern Mississippi, and other prominent figures within the State.[6]

The University of Southern Mississippi is Favre’s alma mater, where his daughter competed on the volleyball team.[7] According to court filings, New, at Favre’s behest, donated $5 million of TANF funds to the USM Athletic Foundation under the guise of a lease for a “multi-purpose wellness center on the University’s campus” in order to get around welfare fund restrictions.[8] According to TANF regulations, “TANF funds can’t be used to pay for a brick-and-mortar structure.”[9] [10] Favre’s daughter has since graduated from USM, and gone on to complete her final year of NCAA eligibility at LSU.[11]

New and Davis were arrested for conspiracy to steal welfare funds.[12]New pleaded guilty to “federal wire fraud charges and to state charges on fraud, bribery, and racketeering.[13] Davis was sentenced to 32 years in state prison after pleading guilty to a combined 20 federal and state charges of conspiracy and fraud.[14]

School responsibility

While lobbying for the construction of the new volleyball facility, Favre spoke to then-USM President, Dr. Rodney Bennett, to discuss funding and ways to save money on construction costs.[15] In text messages included as evidence in the court filings, Bennett texted Bryant in January of 2020 stating, “I’ve asked Brett not to do the things he’s doing to seek funding from state agencies and the legislature for the volleyball facility… I will see for the umpteenth time if we can get him to stand down.”[16] These messages show that the University, by way of Bennett, knew that the donated funds for the volleyball facility were misappropriated welfare monies.[17]

The USM Athletic Foundation is a 501(c)(3) nonprofit.[18] However, the Foundation legally does not have to verify the source of funds donated.[19] Additionally, the IRS no longer requires that most nonprofits disclose the names of its donors if the donors donate more than $5,000.[20] Thus, it may be argued that USM had no obligation to complete due diligence and verify where the $5 million donated for the volleyball facility came from.[21] Furthermore, the school has no legal obligation to return the funds.[22] However, does a moral and ethical obligation exist?

Mississippi is the poorest state in the United States.[23] One in five people in Mississippi live in poverty according to the U.S. Census, including over 200,000 children.[24] The funds inappropriately donated to the USM Athletic Foundation were federal funds that were to be used to help move people out of poverty.[25] The families and individuals who were unable to receive aid due to the misappropriation of funds are victims.[26] USM has a brand new completed volleyball facility, but citizens of the state of Mississippi couldn’t receive money they needed to meet basic needs.[27] What is their recourse?

While the state has sued 38 defendants for the return of the stolen TANF funds, is there a plan in place to make sure the money gets into the hands of those who need it?[28] USM was not a defendant listed in the suit; unless they succumb to a moral/ethical obligation will they get away scot-free? These are all questions that remain unanswered. However, as more information comes to the surface regarding the stolen funds, these are questions the low-income citizens of Mississippi will demand answers to.

While the cost of the volleyball stadium was just a fraction of the $77 million stolen from TANF, it contributes to victimizing poor people who have not been dealt a fair hand.[29] USM’s value statement states that the University values “community participation that promotes social responsibility and citizenship.”[30] In order to maintain its values, the USM should return the $5 million dollars to a nonprofit that receives TANF funds to promote social responsibility and citizenship.[31]


[1] Jenny Vrentas, Brett Favre’s Most Memorable Stat May Be $8 Million Meant for the Poor, The New York Times (September 26, 2022),; Laura Stickler and Ken Dilanian, Brett Favre texts show his role in Mississippi welfare scandal, NBC (September 14, 2022), [2] Strickler and Dilanian, supra. [3] Id. [4] Id.; Katie Strang and Kalyn Kahler, Brett Favre’s foundation, aimed at helping children and cancer patients, gave funds to USM athletics, The Athletic (September 28, 2022), [5] Id.; Vrentas, supra. [6] Vrentas, supra. [7] Strickler and Dilanian, supra.;Strang and Kahler, supra. [8] Vrentas, supra.; Anthony Olivieri, Brett Favre’s involvement in Mississippi welfare scandal draws outrage and indifference, ESPN (October 7, 2022),; Strang and Kahler, supra. [9] Id. [10] Olivieri, supra. [11] Bethany Cohen, Who is Brett Favre’s Daughter Breleigh Favre?, Sportskeeda (September 15, 2022), [12] Strang and Kahler, supra. [13] Id. [14] Id. [15] Id. [16] Id. [17] Id. [18] University of Southern Mississippi 2020 Tax Return, [19] Chris Hamblin, KYC Due Diligence: Why Every Non-profit Should Check its Donors, Wealth-X (March 7, 2018), [20] Candid. Learning, Where can I find out who has donated money to a particular nonprofit organization?, Candid. Learning (October 12, 2022), [21] Hamblin, supra. [22] Id. [23] Rick Maese, Brett Favre is the face of a scandal, but Mississippi’s issues go deeper, Washington Post (September 27, 2022), [24] Id. [25] Id. [26] Id. [27] Id.; Strickler and Dilanian, supra. [28] Strickler and Dilanian, supra. [29] Maese, supra. [30] The University of Southern Mississippi, Vision, Mission, and Values, The University of Southern Mississippi (2022), [31] Id.

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