Rendell, a graduate of UPenn, argues university president Liz Magill made a "mistake" in failing to immediately condemn alleged antisemitic remarks by the speakers who were slated to appear at a Palestinian literature festival last month.
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That festival, the Palestine Writes Literary Festival, has been the focal point of criticism from influential donors who have vowed to close their checkbooks until Magill steps down.
"She should have moved quickly to condemn. Is that enough of a sin that she should have to resign? I don't believe so," Rendell told CNN in a phone interview.
"That was a mistake. But gosh, if I had to step down as governor every time I made a mistake, I wouldn't have made it a week," said Rendell, who teaches a course each fall at UPenn and served two terms as Pennsylvania governor from 2003 until 2011. "I don't think she is going to step down."
Magill did condemn antisemitism broadly before the Palestine Writes festival and noted that some speakers had a history of making antisemitic remarks.
But facing a growing backlash from donors in the wake of the Hamas terror attacks against Israel, Magill acknowledged last week UPenn "should have moved faster to share our position strongly and more broadly."
Rendell said Magill seems like a "perfectly decent person" and credited the UPenn president for making "very strong" statements about antisemitism prior to the Palestine Writes festival.
RELATED: University of Pennsylvania says President Elizabeth Magill is not stepping down
Indeed, some members of the UPenn faculty and even the UPenn Jewish community criticized Magill prior to the Sept. 22 Palestine Writes festival for being too critical of the event.
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Still, Magill's handling of the Palestine Writes festival triggered a backlash from powerful donors in a campaign led by private-equity billionaire Marc Rowan. Then, after Hamas attacked Israel on October 7, donors' simmering anger toward Magill over her response to the festival turned to a boil.
Alumni including "Law & Order" creator Dick Wolf, former US Ambassador Jon Huntsman, venture capitalist David Magerman and hedge fund billionaire Cliff Asness have halted their donations.
"The notion that the Wolf Humanities Center contributed to this hate fest, otherwise known as the Palestine Writes Festival, is an abomination," Wolf wrote in a letter to Magill obtained by CNN.
Organizers of the Palestine Writes festival denied that it embraced antisemitism, according to UPenn student newspaper The Daily Pennsylvanian.
Ronald Lauder, the billionaire heir to the Estée Lauder cosmetics empire, has warned he will also close his checkbook if UPenn doesn't do more to fight antisemitism.
The intense criticism from affluent donors has been unwelcome by at least some UPenn faculty, with leaders of the faculty senate accusing outsiders of "intimidation."
In a statement last week, the leaders of UPenn's faculty senate said the school's commitment to freedom of thought, inquiry and speech are "being threatened by individuals outside of the University who are surveilling both faculty and students in an effort to intimidate them and inhibit their academic freedom."
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"Let us be clear: academic freedom is an essential component of a world-class university and is not a commodity that can be bought or sold by those who seek to use their pocketbooks to shape our mission," the faculty senate leaders said.
Rendell is unsurprised by the influence wielded by the wealthy donors.
"In every walk of American life, billionaires have an outsized microphone. It's not something that is just happening at universities," Rendell said.
Given the controversy over the Palestine Writes festival, Rendell is calling for the creation of an independent commission that would approve whether outside groups can access the UPenn campus.
"No one should have a right to use Penn property if they are preaching violence or hate," Rendell said.
Rendell is seeking support from other UPenn alumni for the creation of this independent commission, which would consist of administrators, faculty, students and alumni, and aim to prevent a similar problem in the future. Rendell is hoping to receive support from Huntsman, who served as governor of Utah when Rendell led Pennsylvania.
"I hope the donors will come back," Rendell said. "But if they don't, that's their decision."