Asklemmy

Public universities in the United States haven't been able to subsist primarily on public funds since at least the Great Recession, and in many cases long before that. To the extent that they are able to, they've tried to bridge the gap between state funds and budgetary needs by attracting more and higher paying students, but that has lead in turn to a startlingly-expensive arms race between institutions trying to build the cushiest student amenities and hiring vast administrative bureaucracies professing their expertise at wooing and retaining high value (read: out-of-state and international) students.. all of which comes at a cost to the student body, in the form of crushing student debt, which paradoxically depresses enrollment -- for many institutions, tuition has soared past the pain point for new high school graduates and their families.

Enter the wealthy donor. Likely they're a successful alumnus or local businessperson, who has more money than they can reasonably spend on their own. They want a legacy now -- to have their name live on for decades or centuries after they're gone. One easy way to do that is to get their name plastered onto the side of a landmark building at their favorite university, so they approach the administration with an offer of some millions of dollars, on the condition that it be used to build a new facility for their college or program of choice, and that it be named after them. This gets the school out of a bind, since they have massive backlogs of deferred maintenance they can't afford to tackle, and a fresh new building for one program means they can play musical chairs with the others until they've vacated their most decrepit building and can just tear it down rather than deal with its problems.

However, as you've guessed, this gives donors incredible power over the universities. I know of one donor who enabled his pet dean to act like a spoiled child and run roughshod over the procurement process, kitting his new building out with useless bells and whistles that took budget away from things that could have actually helped students. In another case, a department chair's actual job became to dote upon an elderly widow of a real estate baron, in order to keep the donations flowing to the department's endowment. Not to mention the distorting effects that what donors choose to give money to have on both the programs that get attention, and the priorities of universities. There was a real glut of new business schools for a while, as an example, and all of them were really excited about the novel ways their MBAs could financialize things that didn't need to be financialized. The late Charlie Munger infamously had UCSB over a barrel with his offer to fix their student housing situation, but only if he was allowed to make the design into a dystopian hell cube.. Not to mention all the donors who will only give money for sports facilities, nevermind what the academic needs are.

In short, the lack of sufficient state funds for the last 15-20 years has drastically worsened higher education in the US for everyone, and opened the door for millionaires and billionaires to exert undue influence on public institutions.