In an email seen by the BBC, Ross Stevens said he was “appalled” Elizabeth Magill avoided questions about how students calling for the genocide of Jews would be punished.
Ms Magill was grilled by politicians on Tuesday about antisemitism on campus.
She has since apologised for her remarks, but is facing calls to resign.
US media are reporting the advisory board at Wharton – the university’s business school – has written a letter to Ms Magill calling for her to step down “with immediate effect”.
American college campuses have seen angry protests and rising incidents of antisemitism since the war between Israel and Hamas erupted two months ago.
Ms Magill appeared in the House of Representatives alongside the presidents of Harvard and MIT, Claudine Gay and Sally Kornbluth.
They were asked by Republican New York Congresswoman Elise Stefanik: “Does calling for the genocide of Jews violate [your university’s] code of conduct or rules regarding bullying and harassment? Yes or no?”
Ms Magill and her MIT and Harvard counterparts did not reply yes or no but said – in varying ways – that it depended on the “context”.
There has been a widespread backlash since, with the White House condemning the remarks.
“The lack of moral clarity is unacceptable,” Second Gentleman Doug Emhoff, the highest-ranking Jewish member of the administration, said on Thursday at a ceremony to mark the lighting of the national menorah.
In his message about the withdrawal of the donation, Mr Stevens said: “I have clear grounds to rescind Penn’s $100 million of Stone Ridge shares due to the conduct of President Magill.”
The founder and CEO of Stone Ridge Asset Management, he told the university that its “permissive approach” to those calling for violence against Jewish people “would violate any policies or rules that prohibit harassment and discrimination based on religion, including those of Stone Ridge”.
Penn is one of the oldest universities in the US and a part of the elite Ivy League group, which also has Harvard, Columbia and Yale as members.
Wharton counts former US President Donald Trump, Tesla and SpaceX billionaire Elon Musk, and many other powerful names in business and finance among its graduates.
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The donation, in the form of limited partnership units in Stone Ridge, was gifted by Mr Stevens in 2017 to help Wharton create a finance innovation centre.
Ms Magill in particular has faced mounting scrutiny as to whether she can continue in her position.
She released a video on the university’s website on Wednesday apologising for her response during the hearing, saying that she was focused on the “university’s long-standing policies – aligned with the US Constitution – which say that speech alone is not punishable”.
She added she should have been focused on the “irrefutable fact that a call for genocide of Jewish people is a call for some of the most terrible violence human beings can perpetrate”, adding that it is “evil, plain and simple”.
While her apology on Wednesday was welcomed by some, Mr Stevens’ letter appeared to call for her resignation.
He said Stone Ridge would welcome the opportunity to review its decision “if, and when, there is a new University President in place”.
On Wednesday, Pennsylvania Governor Josh Shapiro – a non-voting trustee at UPenn – criticised Ms Magill for her “absolutely shameful” remarks and called on the university to make a “serious decision” on her continued leadership.
“It should not be hard to condemn genocide,” he said. “Leaders have a responsibility to speak and act with moral clarity, and Liz Magill failed to meet that simple test.”
A petition demanding Ms Magill’s resignation had gathered more than 22,000 signatures as of Friday morning.
The House Committee on Education and the Workforce announced on Thursday that they will formally investigate Harvard, the University of Pennsylvania and the Massachusetts Institute of Technology over “rampant antisemitism”.
“Committee members have deep concerns with their leadership and their failure to take steps to provide Jewish students the safe learning environment they are due under law,” the committee’s chairwoman Virginia Foxx said in a statement.
Two University of Pennsylvania students – both of whom are Jewish – filed a lawsuit against the school on Thursday, claiming it has become “an incubation lab for virulent anti-Jewish hatred, harassment and discrimination.”
The lawsuit also accuses the school of “selectively” enforcing rules of conduct “to avoid protecting Jewish students” and hiring “rabidly antisemitic professors who call for anti-Jewish violence”.
Islamophobic attacks have also been on the rise on university campuses.
The Department of Education has launched an investigation into multiple schools over alleged incidents of antisemitism and Islamophobia.
SOURCE: BBC NEWS