by J.D. Davidson
At a time when public and private colleges and universities continue to reiterate their growing financial concerns, a disregard of donor intent is chopping away at public trust, according to an Ohio group.
The Buckeye Institute, a Columbus-based think tank, pointed to a multi-million dollar gift to The Ohio State University’s law school as an example of schools paying for fundraising activities and salaries from original donations, rather than following the intent of alumni.
“Too many colleges and universities have created environments in which hidden management fees, poor rates of return and a callous disregard for donor intent are common and have eroded the trust and philanthropic goodwill of some of America’s most generous patrons,” wrote Robert Alt, president and CEO of The Buckeye Institute.
Alt joined with Cully Stimson, senior legal fellow at The Heritage Foundation, on an op-ed in The Daily Signal, a multi-media news organization of The Heritage Foundation.
The institute said Michael Moritz’ 2001 $30.3 million naming-rights gift to the law school has been depleted and not used to underwrite scholarships to underprivileged students. That, according to the institute, was Moritz’ intended purpose.
“Mr. Moritz intended his gift to endow four law faculty chairs and 30 student scholarships. The school has funded the faculty chairs, but routinely sponsors only 12 to 16 student scholarships per year of the 30 he specified,” Alt wrote. “The Moritz estate has challenged the school’s endowment management in court, arguing that the fund has been poorly invested and that Moritz sought to support needy law students, never intending to pay for fundraising junkets and administrative salaries.”
In the op-ed, Alt and Stimson said four state schools – Ohio State, Penn State, Indiana and the University of Illinois – have “underwater endowment funds with current fair-market values millions of dollars less than the values of their original gifts.”
Ohio State, they said, had 26% of its funds underwater by $51.2 million before the pandemic hit.
“Alumni who are considering large gifts to their beloved alma maters probably should think twice, read the fine print and then hire a lawyer before making the gift to ensure that their money is actually put to use for its desired purposes,” the two wrote.
An Ohio native, J.D. Davidson is a veteran journalist with more than 30 years of experience in newspapers in Ohio, Georgia, Alabama and Texas. He has served as a reporter, editor, managing editor and publisher. Davidson is a regional editor for The Center Square.