University President Rod Erickson promised the donation the morning after he and other administrators faced pointed questions at a student-organized town hall forum.
Erickson told The Associated Press in an interview Thursday that the Big Ten bowl revenue, which usually goes back to the athletic department, will go instead to the Pennsylvania Coalition Against Rape and the National Sexual Violence Resource Center.
"This presents an excellent opportunity for Penn State to raise the national visibility of this issue," Erickson said. "Our students and fans are focused on a cause to play for, to cheer for."
Also Thursday, Jerry Sandusky's lawyer said he has not discussed pleading guilty with his client and that the former coach continues to maintain he is innocent of the charges against him.
Joe Amendola said he would consider "possible alternatives" with Sandusky if new charges are filed that involve more victims than the eight boys covered by the 40 pending criminal counts, but that Sandusky has never considered a plea in his case. Sandusky, 67, is awaiting a preliminary hearing.
Amendola said the topic of a guilty plea came up as a "what if" question from a reporter about potential additional charges.
"My answer to the `what if' question was analogous to saying, if weather forecasters were predicting a blizzard next week, which they are not, I would have to at least consider the possibility of postponing my scheduled trip to Philadelphia," Amendola said in an email.
In another development, lawyers for a young man described in a grand jury report as a victim of sexual abuse by Sandusky said Thursday they had settled a legal action regarding a charity's assets.
Harrisburg attorneys Ben Andreozzi and Jeffrey Fritz said the settlement protected the claim their client plans to assert to the assets of The Second Mile, a nonprofit for at-risk children Sandusky founded in 1977.
"We intend to initiate a civil lawsuit seeking damages from the organizations and individuals responsible for the sexual assaults upon our clients," the lawyers said in a release. "However, our priority at this time is to support our clients, including Victim No. 4, who will be testifying against Mr. Sandusky at the preliminary hearing."
Andreozzi and Fritz said that under terms of the settlement, The Second Mile has agreed to obtain court approval before transferring assets or closing and give their client the ability to weigh in before a judge regarding any distribution of assets.
The Second Mile released a statement calling the agreement a reiteration of its existing legal liabilities and saying it does not include a finding of liability.
The Second Mile said earlier this week that its donors should consider giving their money instead to the Pennsylvania Coalition Against Rape, the latest sign that the charity may not be around much longer. The Second Mile said its December programs would go on as scheduled, however.
The Wednesday night forum on Penn State's main campus came on the heels of fresh sex abuse allegations against Sandusky, who was accused in a lawsuit of sexually abusing a young boy more than 100 times after meeting him through his charity.
The state police commissioner has criticized school leaders for failing to do more to alert authorities to the allegations, and Erickson told about 450 attendees at a crowded auditorium at the student union building that ethics would be raised "to a new level so that everyone at the university understands not just the legal thing to do, but the moral thing to do, so that we learn to do the right thing the first time, every time."
Students appeared grateful to get answers more than three weeks after Sandusky was charged Nov. 5, hopeful it would aid in the arduous healing process.
"I think this is a good start for a lot of good things that can happen at the university," said student Andrew Comes, 21, following the two-hour forum. "It's a singularly bad event, but there can still be positive repercussions and good things happening from it."
Administrators sought to reassure students worried about the unintended ramifications of the scandal, such as the reputation of a Penn State degree.
After several questioners mentioned they felt shamed by the scandal, vice president Henry Foley, as part of an answer about the school's top three priorities, told students to focus on academics and to "recognize that none of you are guilty. You may feel shame, but none of you are guilty. Just keep doing what you came here to do."
The scandal has resulted in the departures of head coach Joe Paterno and university President Graham Spanier. Athletic Director Tim Curley has been placed on administrative leave, and Vice President Gary Schultz, who was in charge of the university's police department, has stepped down.
Schultz and Curley are charged with lying to the grand jury and failure to report to police. They also maintain their innocence and have a preliminary hearing later this month.
Erickson told reporters after the forum that Spanier was on sabbatical and that as a tenured faculty member would have the right to teach if he so desired.
Several students also asked about the treatment of Paterno, who was the only school leader fired in the scandal's aftermath. Erickson said afterward he could not offer a detailed answer because it was the trustees' decision.
He reiterated there was no truth to Internet-fueled rumors that Paterno's statue outside Beaver Stadium would be removed or that the Paterno name would be removed from the campus library for which the Paterno family has donated millions of dollars.
"At some appropriate time down the road, I'm sure there will be an opportunity to also reflect on the many years of service Joe and (wife Sue Paterno) provided the university and the many good things that they've done for Penn State," Erickson said, eliciting brief applause.