Why do some Universities give honorary degrees? Most of the question is the title: Why do some Universities give honorary degrees? 

E.g. the President of Indonesia, Sukarno, got 26 honorary doctorates, and Zimbabwe’s president Robert Mugabe has been awarded around a dozen honorary degrees.

What is the benefit for the Universities? Donations? Political leverage? Genuine attempt to give to somebody the recognition he deserves? If last option, why calling it a degree instead of using a more general term like award/medal/etc, like some other Universities do?
Benefits to the university include donations, drawing important people or celebrities to give commencement addresses, and publicity. I'm sure genuine attempts to give recognition are a factor at least some of the time :)

Here are some data points:


Higher ed writer Tim Johnson asked the University of Vermont for a list of honorary degree recipients from 2002-2012, and how much each of those people has contributed to the university over the last decade.

Of the 60 recipients, 35 were on the record as having made donations to the university, for a total of >$13.6 million for an average of $228,248. (Excluding one degree recipient with an outsized $9 million contribution, the average was $68,854).

According to the chair of the UVM honorary degree committee, it's not only a thank you for a donation:


  Gary Derr, UVM’s VP of executive operations and chair of the university’s honorary degree committee, defends the practice, explaining it has to do with recognizing individuals for outstanding achievements or service to the university, state, nation or world. A degree is not, he insists, just a thank-you for writing a fat check.

From the New York Times:


  "Sometimes they are used to reward donors who have given money; sometimes they are used to draw celebrities to make the graduation special," said Arthur E. Levine, president of Teachers College at Columbia University... "I've always viewed it as a last lesson a college can teach, by showing examples of people who most represent the values the institution stands for," Dr. Levine said.


An unusual benefit mentioned in the same article:


  Chapman University in Orange, Calif., awarded an honorary degree to the author John Fowles after he agreed to let it create a writing center and literary festival in his name.

Similarly, former George Washington University President Stephen Joel Trachtenberg reports that "people have asked for an honorary degree in exchange for a donation" but adds


  We also give honorary degrees to people who don’t give us a penny. It's just because their lives are exemplary.

Another potential benefit to universities is publicity. Reportedly, when Southampton College awarded an honorary doctorate to Kermit the Frog in 1996 (commencement address here), 


  31 newspapers picked up the story, a free marketing bonanza that raised the college's profile and drew hundreds of new admissions

Of note: honorary doctorates are an easy offering for diploma mills, since they don't have to pretend it's about anything but money. Here are some examples:


The University of Berkeley Online offers honorary doctorates for a minimum "support honorarium" of $2,000. 
The Los Angeles Development Church &amp; Institute awards honorary degrees for "a simple, one-time donation of $89." You can get the degree in a wide range of diverse fields, including Ufology.
The Abundant Life Bible College and Theological Seminary recently offered honorary degrees for a limited-time offer of $85, down from the usual $150.