Why might alumni donations decline in response to unethical expenditures by a university president?

The correct answer focuses on the concept of financial accountability, which is pivotal in maintaining trust and support from alumni. When a university president engages in unethical expenditures, it affects the perception of financial integrity within the institution. Alumni who may have previously contributed financially could feel disillusioned or betrayed, leading them to withdraw their support. Financial accountability ensures that contributions are utilized appropriately and for the intended purposes, fostering a sense of trust and loyalty among alumni. If that accountability is compromised, it can result in a significant decline in donations as alumni seek to distance themselves from an institution they perceive as mismanaging funds or acting unethically.

In contrast, increased marketing budgets or improved reputation can arise from better practices, while greater alumni engagement typically reflects positive relationships and transparency. However, none of these factors directly address the issue of trust that is compromised due to unethical behavior, making financial accountability a core reason for the decline in donations.