Why is the Ross fund unlike any other Foundation fund?

Short version:

The UO administration has been telling people that the Ross Fund modification was a routine part of the UO and UO Foundation’s normal processes. I don’t think that’s true. It was exceptional on many dimensions, as I document below. First, at ~$2.5M, it was by far the largest fund modified since 2009, as far back as my records go. I think the next highest was $175K (although numbers are not there for all modifications). Second, it was the only modification that was opposed by anyone. Third, it was one of only three modifications I could find that explicitly took control of spending from the faculty and gave it to a Dean. Fourth, it was the most significant change from the donor’s original intent of any of the modifications since 2009.

Most of these modifications consisted of converting “old and small” Foundation controlled endowments (more than 2o years and less than $25K) and converting them to immediately expendable cash – with no or small changes to the purpose of the gift.

In addition, it now seems clear that the AH&H faculty never voted in support of the language in the fund modification. They did vote to approve broadening the scope of the spending to include support for PhD students. However the fund agreement modification proposed by the UO Foundation, supported by GC Kevin Reed, and adopted by the court went far beyond that:

Where annual distributions from the fund are in excess of reasonable, practicable, and/or prudent use for the aforementioned purpose, excess distributions may be used to provide for broader research endeavors of the Department of Art History. Such expenditures may include Ph.D. fellowship support, faculty research stipends, research related travel, or other similar types of research related expenditures. Appropriate amounts and usages are at the discretion of the Dean. In accordance with the original intent of the fund, where funds are utilized in this manner, they will be supplemental to expenditures made from the regular budget and not in lieu thereof.

None of the modifications considered and voted on by the faculty considered anything like this language.

Caveat: As you will see there are a lot of pages of legalese here. I may have missed a few things.

Previous posts on this with links to the Court and Oregon DOJ Charitable Activities documents are at:

1/29/2018: http://uomatters.com/2018/01/uo-foundation-ceo-paul-weinhold-breaks-professors-bequest-transfers-control-of-2-4m-from-faculty-to-cod-dean-lindner.html

2/11/2018: http://uomatters.com/2018/02/uo-foundation-took-535k-from-professor-ross-fund-for-expenses-then-sent-his-trustee-a-nastygram-and-ignored-him.html

The department minutes and motions are at

Minutes: http://uomatters.com/wp-content/uploads/2018/03/HAA-faculty-meeting.pdf

Motions: http://uomatters.com/wp-content/uploads/2018/03/Ross-proposals.pdf

Long version:

After learning about the Ross Fund modifications from a CoD professor, I asked the Oregon DOJ for copies of their records on all endowment fund modifications submitted by the UO Foundation since 2009. I got back about 1,000 pages of docs (no charge, because of the obvious public interest):

Document I – covers modifications from ~2013-present: http://uomatters.com/wp-content/uploads/2018/02/Harbaugh-PRR-2.2.18.pdf

Document II: – covers modifications from ~2009-2012: http://uomatters.com/wp-content/uploads/2018/02/Harbaugh-PRR-2.2.18-part-II.pdf

Since 2009 the Foundation has requested permission to modify about 62 funds. 35 of these were done under the UMPFI’s “old and small” rule, which allows an endowment to be converted into immediately  expendable funds if it’s older than 20 years and smaller than $25K. The money has to be spent for substantially the same purpose as specified in the original gift.  The typical situation involves a donation of $10K or so back in 1980 or so, to endow a scholarship for undergraduates in a specific department. The UO Foundation writes to the Oregon DOJ Office of Charitable Activities, explains the fund is old and small (and therefore relatively expensive to administer and spend) and the DOJ responds with a letter saying they can end the endowment and spend the money on things related to the intent of the giver. This is a little sad, in that the donors clearly thought they were endowing a permanent memorial to a loved one or themselves, but too bad – the law clearly allows the Foundation to break these contracts in the interest of efficiency, although it doesn’t require that they do so.

I found two or three funds where the Foundation asked for a modification because the bequest included restrictions that are now illegal – e.g.:

I am enclosing for your review a proposed Agreement Modifying Institutional
Fund in the Antoinette S. Stanton Memorial Scholarship Fund. The Fund was
established with $5,000 in 1969. The donor required that preference be given to unmarried students, which is no longer possible under current law. Additionally, the Fund was for the benefit of students of home economics. That department no longer exists at the University. Therefore, the Foundation proposes to modify the Fund- to provide scholarship support for undergraduates majoring in family and human services with consideration of academic merit and financial need. 

Seems like a good idea, though I would have argued the home economics money should have gone to the economics department, since the Greek root of economics means “household management”.

There were also nineteen fund modifications that involved the consent of the donors or heirs/trustees. Many of these were gifts in the hundreds of thousands range. My favorite is the “Rock’n J Chair in History Endowment Fund”. The donors originally named it after their ranch, but later thought better of it and renamed it and broadened the scope to:

Whereas the parties entered into a prior Agreement in December 2004; and Whereas the scope of the chair was too narrowly defined to be effectively used by the department; Therefore it is the parties’ intent and agreement that the Foundation shall modify the purpose to become as follows: The purpose of the Fund is to support an endowed chair in the Department of History to focus on the history of the U.S. American West.

Here’s the full list, categorized as Unopposed, Illegal, and Old & Small. No promises that I haven’t missed something. (Notation: II p141 means document II, page 141.)

UNOPPOSED:

Thomas C. Stewart Business Professorship. 2010 II p141. 

The parties have agreed to modify the purpose of the fund to more strategically award faculty excellence within the Lundquist College of Business. Awards will be made on an annual basis with a set stipend and potential additional award for professional development costs. Additionally, the name of the fund will be change to the Thomas C. Stewart Distinguished Faculty Fund, See Exhibit B, attached hereto and incorporated herein.

Dynamic Measurement Group Research Award for Literacy Study. 2010 II p162. 

The original purpose was to support research by doctoral
students in early literacy and related areas. Sufficient funds are now available so that the parties wish to broaden the purpose to support other graduate students in addition to doctoral students when no or limited doctoral dissertation projects qualify for the award. All original donors have signed the Modification Agreement

Division of Bernard Charitable Remainder Trust. 2010 II p175.

Max Risinger Memorial Fund. 2010 II p216. 

Modification of Purpose. Whereas the parties entered into a prior Agreement in 1976; and Whereas the fund current generates $1,000 per year, so limiting the annual award to $200 is wasteful;
Therefore it is the parties’ intent and agreement that the Foundation shall modify the purpose to become as follows:
• The scholarship[s] may be used for all standard educational expenses including tuition, fees, books, miscellaneous supplies, room and board.
• The purpose of this fund is to grant scholarship[s] to upper- division or graduate students enrolled at the University of Oregon in choral music education who show promise of outstanding success in the field.
• The recipient of the award is to be selected by a committee of the music education faculty, including the Dean of the School of Music, on the basis of observed talent and performance in music education.
• If for any reason the award is not made for a given academic year, then it shall be added to the endowment principal.

John A. and Patricia L. Gertson Scholarship Fund. 2010. II p 233.

The original language of the endowment fund agreement provides that the scholarship shall be awarded “to an undergraduate student at the Lundquist College of Business (“LCB”) whose grade point average is not high enough to qualify for scholarships based on academic achievement. The student must not have been awarded other privately funded scholarships for the same academic period.” This language is overly restrictive and difficult to administer.

Harold E. Lannom and Adrienne D. Lannom Charitable Remainder Unitrust. 2011 II p251. 

The original purpose of the fund was to benefit the Bach Festival here in
Eugene. However, while the Bach Festival remains a program of the University, the Settlors believe the Festival has come to emphasize performance rather than education, conducts many of its event off campus, and in general has become more independent from the School of Music (although it is still a program of the School of Music). For these and other reasons, the Settlors no longer feel that the charitable purpose provided for one-half the remainder interest in the CRUT will be served as originally intended, and the Settlors have requested a change, to which the School of Music has agreed. The new purpose of the one-half remainder gift to the University of Oregon Foundation would be to support the University of Oregon’s Museum of Natural and Cultural History, The specific fund that would receive the remainder interest is the Museum of Natural History Director’s Endowed Fund. This Fund supports educational and scholarly endeavors at the Museum and would be a valuable asset in recruitment and retention of Museum directors.

Frank X. Wegmann Scholarship for Chinese Studies. 2011. II p 290. 

The original purpose was to provide study-abroad scholarships for junior Chinese language majors. Now the parties wish to remove the restriction requiring the student to have completed sophomore year, and to provide for a preference rather than a requirement that the student be a Chinese major.

Tzedek Lectureship Endowment Fund Modification. 2011. II p294. 

The Tzedek Lectureship brings distinguished thinkers and teachers in the study of moral, ethical and righteous behavior to Eugene and Portland for lectures and other formal and informal gatherings with students, faculty, and others. The endowment fund agreement called for the Tzedek Lecturer to spend approximately a week engaged in these activities, However, over time this has become impractical, and the Foundation proposes to modify the agreement to provide for a schedule of one to three days. The lectures would continue to be published. David B. Stern and Nancy E. Guitteau, the donors, consent to the modification and have signed the Agreement.

Kritikos Professorship Endowment Fund Modification. 2011. II p295. 

The Kritikos Professorship brings distinguished scholars, critics and leaders to Eugene and Portland for lectures and other formal and informal gatherings with students, faculty, and others. The endowment fund agreement called for the Kritikos Professor to spend approximately a week to ten days engaged
in these activities. However, over time this has become impractical, and the Foundation proposes to modify the agreement to provide for a schedule of one to three days. The lectures would continue to be published. David B. Stern, the donor, consents to the modification and has signed the Agreement. 

Pat Lynch Charitable Remainder Unitrust (LCB) 2011. II p428. 1996

The first $150,000 received shall be segregated and set aside to perpetually endow a scholarship for the women’s golf program and shall be know as the Pat Lynch Endowed Scholarship for Women’s Golf. 2. Assets received in excess of the initial $150,000 shall be used to create a separate endowment for the benefit of the Charles H. Lundquist College of Business. Income from said endowment shall be used at the discretion of the Dean of the College. This endowment shall be known as the Pat Lynch Endowed Fund for Business.

Dr. John Miller Memorial Scholarship Endowment Fund. 2012 II p459.

The original Fund Agreement contemplated support for scholarships for students in the University of Oregon (“UO”) wrestling program. Since the wrestling program has been disbanded, the goal is to expand the use to also include UO students in the baseball program. This allows for the possible future return of wrestling to UO, with scholarships once again available to those students.

Donald C. Walker and Norman J. Wiener Research Endowment Fund Agreement. 2012 II p465.

There were three original purposes of the Fund, only one of which is at issue in this modification. Specifically, the original gift instrument mandated that the student research scholarships be awarded to graduates from two specific Portland schools only. This restriction has meant that the scholarship cannot always be awarded. Now the parties wish to broaden the purpose under the student research scholarship section to maintain a preference for graduates of Roosevelt or Jefferson High Schools in Portland, but allow the scholarship to be awarded in the event no Roosevelt or Jefferson graduate applies.

Dennis H. and Christine N. Hill Charitable Remainder Unitrust. (Biology) I p1.

Janice E. Rianda Charitable Remainder Unitrust modification. I p356. We understand that you have requested a modification to the charitable purpose
of the David N. and Janice E. Rianda Charitable Remainder Unitrust (the “CRUT”). Modification, in coordination with the more recent Gift Agreement, is intended to convert the CRUT’s purpose from support of a visiting journalism professional to scholarship support for certain journalism majors, as described in the Gift Agreement, and to support the Janice E. Rianda award.
Oregon law requires this modification of a charitable trust to be approved by the Lane County Circuit Court. Therefore, we have filed on behalf of the University of Oregon Foundation the enclosed Petition for Modification of Charitable Remainder Unitrust.

Robert W. and Bernice Ingalls Staton Scholarship Endowment Fund and the Staton Family Quasi Endowment Fund (rename). II p6. 

Rock’n J Chair in History Endowment Fund. II 38. 

Modification of Purpose. Whereas the parties entered into a prior Agreement in December 2004; and Whereas the scope of the chair was too narrowly defined to be effectively used by the department; Therefore it is the parties’ intent and agreement that the Foundation shall modify the purpose to become as follows:
The purpose of the Fund is to support an endowed chair in the Department of History to focus on the history of the U.S. American West.

Oliver and Robin Collins Presidential Scholarship Endowment Fund. II p44. 

Scholarships shall be provided for athletes who qualify’ as Presidential
Scholars based on academic merit, extra-curricular activity, community
leadership and a written essay:k The University Scholarship Selection
Committee,’ comprised of faculty and students, will award the scholarships
each year with oversight from the Student Financial Aid Office based on,
recommendations .from the Athletic Department.  

Modified: Student-athletes with a high school GPA of at least 3.50, who have participated for at least one year in a high-school extracurricular activity other than athletics and who maintain a minimum GPA of 3.00 while enrolled at the University of Oregon. The student-athletes should be from Arizona, California, Nevada, Oregon, or Washington. If there are no student-athlete candidates from the states mentioned above, then consideration should be given to student-athletes from other states who meet the GPA and extracurricular requirements.

Charles A. and Jackie Swenson Endowment Fund Modification. II p66. 

The parties now wish to expand eligibility for the scholarship and provide that students from Singapore will be given preference, followed by students from Hong Kong, followed by students from any other ASEAN country. We have the consent of donor Richard Scow and do not plan to seek court approval for this modification. 

Stine Graduate Teaching Fellowship Fund Modification. 2009, II p73.

Libraries. Expand to undergrads. 

Tee A. Corinne Institutional Fund Ip5- & IP164

$175K. Modified to “To benefit the Special Collections and University Archives at the University of Oregon Libraries, for the purpose of acquiring, processing, preserving and making available the papers and records of feminists and/or lesbians, including the Lesbian Community of Southern Oregon.”

Dow-Kerns Oriental Art Institutional Fund.  I p309. 

Therefore it is the Parties’ intent and agreement that the Foundation shall modify the fund: To be fully expendable, not endowed; and for the purpose to become as follows: To support the Jordan Schnitzer Museum of Art, with preference for supporting Asian art.

G. S. Douglas Endowed Scholarship. I p398. 

The original Fund Agreement, a copy of which is attached hereto, contemplated use for a women’s soccer scholarship. The spendable cash available as of June 30, 2017 is $368.11. The Fund’s endowment as of June 30, 2017 is $18,973.20. The endowment restriction has caused the fund purpose language to become wasteful. The Trustee will remove the endowment restriction and the fund shall be a currently spendable, not endowed fund. The original purpose of the fund may be best achieved by allowing for full spending of the balance of the monies.

The Robert J. Koch Endowed Fund Agreement. I p408. 

The original Fund Agreement, a copy of which is attached hereto, contemplated use to foster and promote the education and development of the skills of students and the professional development of faculty members in the School of Architecture and allied Arts by establishing an endowed fund which provides unrestricted support to the Dean of the school for those needs he or she deems of highest priority. The spendable cash available as of June 30, 2017 is $1,083.44. The Fund’s endowment as of June 30, 2017 is $19,974.65. The endowment restriction has caused the fund purpose language to become wasteful. The Trustee will remove the endowment restriction and the fund shall be a currently spendable, not endowed fund. The original purpose of the fund may be best achieved by allowing for full spending of the balance of the monies. (Gift language allows Dean to do this any way.)

ILLEGAL:

Miriam McFall Starlin Poetry Fund.

2010 II p 121. 3. Historical Background of Fund. In 1995, Miriam M. Starlin and Glenn Starlin established the Miriam McFall Starlin Poetry Prize with the University of Oregon Foundation. The terms of the Agreement required the prize to be awarded to female University of Oregon • graduate students in creative writing, with a concentration in poetry. See Exhibit A, attached
hereto and incorporated herein. 4. Reason for Modification. The University of Oregon wishes to remove the gender-based restriction on candidate selection, as set forth in Exhibit B, attached hereto and incorporated herein. Donor Miriam M. Starlin consents to this modification. In addition, Ms. Starlin requests that the award be renamed The Miriam McFall Starlin Poetry Award. Donor Glenn Starlin has passed away. 
The Fund will provide an pnual source of income to be used to award the Miriam McFall Starlin Poetry Prii8to graduate students in Creative Writing whose concentration is in poetry. Recipients will be selected by the Director of the Creative Writing Program from among candidates who have shown a significant talent for poetry, and who evidence promise of additional outstanding achievement.

Antoinette S. Stanton Institutional Fund Modification. II p1. 

I am enclosing for your review a proposed Agreement Modifying Institutional
Fund in the Antoinette S. Stanton Memorial Scholarship Fund. The Fund was
established with $5,000 in 1969. The donor required that preference be given to unmarried students, which is no longer possible under current law. Additionally, the Fund was for the benefit of students of home economics. That department no longer exists at the University. Therefore, the Foundation proposes to modify the Fund- to provide scholarship support for undergraduates majoring in family and human services with consideration of academic merit and financial need. 

OLD AND SMALL:

Annual Program Music School Support Institutional Fund Modification. 2009 II p79. 

Walter R. Moberly Memorial Award Endowment Fund. 2009 II p84. 

FailingBeekman Oration Prize Fund. I:p44.

Created in 1889. $20K. Transferred to Humanities Scholarship Fund.

McCool Memorial Scholarship Fund: Ip56. 1985. 

“To the UNIVERSITY OF OREGON SCHOLARSHIP FUND, Ten Thousand
Dollars ($10,000.00), in memory of Eve H. McCool.” EQ35/26-7580
The spendable cash available as of October 1, 2014 is $0. The Fund’s endowment as of October 1, 2014 is $23,937.83. The Trustee will terminate the Fund and transfer the remaining assets to: “The General University Scholarship Endowment Fund: To be used by the Office of Student Financial Aid for general University of Oregon scholarships.”

Newel H. Cornish Scholarship Award. I p68.

Transferred to “The Koert S. Kelman Fund: An award for a student pursuing a career in sales and marketing. Student to have achieved a GPA of 3.0 or higher and preference shall be made for financial need. Recipient is to be determined by committee within the Lundquist College of Business.” 

Wallace B. Caufield, Jr. Memorial Fund. Ip78.

Class of 1902 Scholarship Fund. Ip87.

John Lee-Rick Bullis Memorial Fund Ip96. Architecture. 

Kathryn S. Riddle Scholarship Fund. Ip105. 

“The beneficiary of each of the three (3) bequests herein mentioned shall hold
the principal thereof in trust by it and the income therefrom shall be used to
establish and provide a scholarship for an outstanding upper-class woman
student in the Women’s Physical Education Department at the mentioned
Universities, each to be known as the Kathryn S. Riddle Scholarship. The
recipient of the annual scholarship shall be a student selected by the Chairman
of the Department of Women’s Physical Education at such University with the
advice of the Department Faculty.” 

Frances P. Courteau Scholarship Fund. Ip117. 1963. 

T. Neil Taylor Scholarship in Editing. Ip127. 1940-1954. Journalism.

Edith Kerns Chambers Scholarship Endowment Fund. Ip137. “A scholarship shall be granted to an undergraduate student or students of high scholastic promise who need financial assistance while attending the University

Class of 1903 Scholarship Fund. I p147.

Van Schaack Music Scholarship Fund. Ip156. 

“for the benefit of blind persons studying music.” In the last twelve years only one student has met these criteria. Therefore, it has been impractical to achieve the donor’s original intent and wasteful to hold the fund for such a narrow purpose, as is. For these reasons, we ask that the Fund be modified as follows: “To support scholarship(s) for music students at the University of Oregon, with a strong preference for those who are blind.”

Bennett Prize Fund. Ip167.

Give and bequeath to William J. Bryan, of Lincoln, Nebraska, the sum of Ten Thousand ($10,000) Dollars in trust, however, to pay to twenty-five colleges or universities to be selected by him, the sum of Four Hundred
Dollars ($400) each. Said sum of Four Hundred Dollars ($400) to be
invested by each college receiving the same and the annual proceeds
used for a prize for the best essay discussing the principles of free
government.”

George Rebec Essay Prize in Philosophy Endowment Fund. I p174.

Pennell Memorial Library Fund. I p182.  

In the purchase of inspirational books for said University library, preferably books of biography, as are selected by such librarian and his assistants, the sum of FIVE HUNDRED DOLLARS ($500.00).” Also a house with iffy plumbing. 

Leach Library Book Endowment. I p204. 

“Income from endowment to be used for the purchase of art library books.” The Trustee will terminate the Fund and transfer the remaining assets to:
“The Architecture Library Fund: for the benefit of the Architecture and Allied Arts Library at the University of Oregon. Funds may be used to purchase books,
visual materials, supplies, equipment, travel, student wages or stipends,
furnishings and any other purposes for the general operations of the A&AA
Library. Use of funds is determined by the dean or his/her designee, in consultation with A&AA Librarian, A&AA faculty members and department
heads/directors.

Flora (Campbell) McDonald and Alexander Campbell Fund. I p215. 

“The bond will be inscribed simply, “The University of Oregon” for we wish to make this gift without any limitations whatsoever. The bond may be used in any way and at any time the officers of the University may desire is best. However, in so far as it may be feasible and reasonable, we would like to see the income applied to the purchase of books and /or journals for the University of Oregon Library. In recent correspondence on this matter I have had with Dean Unthank, he mentioned that it is customary for the library to place in items so purchased, a plate indicating the source. If the library cares to do this in the present instance, I would request “Mrs. Flora (Campbell) MacDonald and Alexander Campbell.”

Marie Flodberg Fund. I p224. 

“I give, devise and bequeath all of my property and estate to the University of Oregon, and suggest to said beneficiary that the moneys and/or other property distributed to it from my estate be used by its Department of Ophthalmology for research on diseases of the eye.

Roland Bradley Scholarship Fund I p235. 

Albert Lee and Amelia De Ferris Fund. I p247. 

Warner Law School Endowment Fund. I p261.

“It is understood with the donors that these bonds, both principal and interest,
shall be held, used and disposed of subject to the special. orders of the Dean of the Law School.

John Watson Vogan Spanish Essay Fund. I p271.

Victor H. Todd Scholarship Fund. I p281. 

The Harry J. Allen Memorial Scholarship Fund. I p389. 

The Mrs. George Higinbotham Endowed Fund. I p417. 

The James G. Manczazk Memorial Endowed Fund I p425. 

The Merit Tuition Scholarship Endowment. I p433.

The Joni Paulsen Memorial Scholarship I p447. 

The Oregon Music Teachers Association Scholarship Fund. I p452. 

The Charles Frederick Goettling, Jr. Scholarship Fund. I p 462. 

The Class of 1938 Library Acquisition Fund. I p472.

The Wesley C. Ballaine Fund. I p481. 

Koyl Endowment. I p491. 

The original Fund Agreement, a copy of which is attached hereto, contemplated use for an award each year to a student or students taking courses in literature, public speaking and economics. The spendable cash available as of June 30, 2017 is $3.32. The Fund’s endowment as of June 30, 2017 is $19,051.82. The endowment restriction has caused the fund purpose language to become wasteful.

The Shelton Zack Memorial Scholarship Fund. I p507.  

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4 Responses to Why is the Ross fund unlike any other Foundation fund?

  1. Dog says:

    I think UO matters may be rising to the Kenny Jacoby standard of professional journalism with this investigation

    Keep up the good work – ask for an additional merit raise
    based on this :)

    VA:F [1.9.22_1171]
    Rating: +7 (from 9 votes)
  2. uomatters says:

    I am not worthy.

    VN:F [1.9.22_1171]
    Rating: +1 (from 1 vote)
  3. Payroll Guy says:

    Grifters gonna grift.

    VA:F [1.9.22_1171]
    Rating: +5 (from 5 votes)
  4. Dog says:

    Depends on how deep this corrupted or co-opted use of the Ross fund goes …

    VA:F [1.9.22_1171]
    Rating: +2 (from 2 votes)

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