Students at Beijing's elite Tsinghua University can be forgiven for doing a double-take as they entered the school's No 4 building this week. No, they hadn't headed to their local shopping mall instead of the university campus. Rather, the name of a well-known clothes retailer, Jeanswest Clothing, had been added in flashy gold letters, to the outside of the building.

The university tells us that in April, Jeanswest Clothing agreed to a deal with the university to give money for the maintenance of the building and the replacement of equipment. In return, the building was this week branded with the company's name.

Students and alumni alike were reported as being aghast at such shameless commercialization being sanctioned in Tsinghua's hallowed halls of academia.

Yet, accepting, in fact soliciting, corporate sponsorship is nothing new for Tsinghua University, nor is the concept unique to China. Around the world, particularly in North America, private funding is a vital component of many a university's operational budget.

But the practice is hotly debated, and certainly a no-holds-barred approach to a university accepting private dollars, particularly to fund research, presents a Pandora's box of ethical issues.

In 2008, the New York Times highlighted the issue of tobacco giants funding university activities in the US. Many universities voiced their unease regarding the appropriateness of partnering cigarettes, a vice, with education, a virtue. George Gau, dean of the University of Texas business school, which ended a long-standing funding arrangement with the parent company of tobacco maker, Philip Morris, explained the decision to the Times, saying, "The leadership of the school felt that in some sense it was tainted money, that it is money gotten from a product that is significantly harming people."

Another US university had no such qualms. According to the New York Times, the Virginia Commonwealth University had a secret pact to conduct research for Philip Morris. "The contract bars professors from publishing the results of their studies, or even talking about them, without Philip Morris’ permission," reported the Times in May 2008.

At the core of any university is its ability to undertake robust, independent research. It is not, as one blogger put it, that such public-private partnerships are "intrinsically corrupting", but rather universities must be cautious to not buy into any deal that undermines good research protocols, including peer review processes, publishing findings in academic literature, and academia setting the research agenda. The degree to which Philip Morris called the shots in the case highlighted by the Times is simply not acceptable and sets a dangerous precedent for future private-public research partnerships.

Students at the University of Oregon are also pretty staunch when it comes to accepting so-called tainted money. Back in 2000, students gathered around their university's executive administration offices to protest the school's biggest donor, Nike. Globally, criticism of Nike's use of child labor in developing world factories, unwittingly or not, was gaining momentum, and the Oregon students were demanding Nike be subjected to random factory inspections. According to a student blog, Nike informed then University President Dave Frohnmayer that they would rescind a $30 million donation for renovations to the school's sports stadium if the student protests continued and proved damaging to Nike. The school president, initially encouraging of the students' cause, told them to back off.