Stanford, $21,446,006,000
Princeton, $20,995,518,000
Largest endowments among Georgia colleges
Emory, $6,681,479,000
Georgia Tech, $1,889,014,000
University of Georgia, $939,024,000
Berry College, $916,828,000
Spelman College, $367,037,000
2014 figures, from report by the National Association of College and University Business Officers and the Commonfund Institute.
Spelman College’s decision to sever its ties to Bill Cosby discontinued a prestigious professorship funded by the comedian and his wife and highlighted one of the problems that can arise in colleges’ relationships with donors who fund their endowments.
When disagreements arise over the use of the money, it can result in the donation being returned or, as in Spelman’s case, a donor’s behavior can cause the school to tell the donor and his money goodbye.
The donated funds are designed to support an aspect of the university’s operations — such as research, scholarship or faculty salaries — built up over several years and invested.
In addition to ending the William and Camille Olivia Hanks Cosby Endowed Professorship, a spokeswoman said Spelman returned the money associated with it to a foundation established by Cosby's wife.
The professorship was funded through a $20 million gift from the Cosbys to the college in 1998 that also helped fund a new academic center bearing the name of Cosby’s wife. The decision to end it follows revelations uncovered in court depositions that Cosby obtained drugs for women he wanted to have sex with.
Spelman hasn’t said how much money was associated with the Cosby professorship. The college also had no comment this week on whether the name of the academic building would be changed.
Atlanta playwright and novelist Pearl Cleage, a 1971 Spelman graduate who once held that professorship, said, “I am very proud of Spelman College for discontinuing the Cosby Chair and returning the funds to the family foundation.”
The program “brought an outstanding group of women scholars and artists to the campus,” many of whom maintain a relationship with the college, “but I am confident that Spelman will continue to attract great women to interact with the students and faculty and that their principled stand as an institution will only enhance their reputation as a place that produces outstanding women who are committed to excellence and for whom truth and sisterhood are always at the heart of the matter,” Cleage said.
"When people talk about 'an endowment' they typically speak about an institution's total endowment, but in actuality, that total is made up of individual gifts, and each is treated as a separate accounting entity," said William Jarvis, managing director and head of research for the Commonfund Institute, an institutional investment firm.
The Cosby money was a small part of Spelman’s overall endowment, which last year was more than $367 million, according to a report published in January of endowments at more than 800 colleges and universities, compiled by the National Association of College and University Business Officers. The figure ranked Spelman 218th. Only Emory, Georgia Tech, the University of Georgia and Berry College had larger endowments among Georgia institutions, according to the data. By comparison, Harvard University had the largest endowment last year, more than $35.8 billion. Spelman’s severing ties with Cosby is not the first time a nonprofit organization has had to return funds, or to change or erase the name of a donor affiliated with a particular benefactor or gift.
“When the relationship doesn’t work there is usually a way for either party — the donor or the benefiting institution — to get out of it with little penalty,” said Ken Redd, director of research and policy analysis at NACUBO. A school losing a gift may have to move a professor hired by that endowment or find other ways to fund research the money paid for.
“Generally speaking, whatever money is given back would be the value of the fund at the end of the gift agreement,” Redd said, but not the money that has already been spent.
Lawrence Cunningham, a contract law professor at George Washington University, has studied the tenuous relationship between donors and institutions. Spelman’s decision on Cosby is a reminder that both parties mutually depend on “good behavior and shared intentions,” Cunningham wrote in a column about higher education gift agreements adapted from his book on contracts. Most times those agreements fall through when a university makes a major change to its mission or can’t meet expectations set by a donor. Because the gifts may be spread out over a number of years, a change in a donor’s finances may lead the donor to pull out of the agreement, experts said.
A $250 million gift to Centre College in Kentucky was withdrawn in 2013 after a financial deal involving the donor fell through. A $10 million donation to UCLA by Lowell Milken, brother of Michael Milken who was jailed for securities fraud, was criticized by some school faculty. Twenty years ago Yale returned $20 million to alumnus Lee Bass, who complained that the Ivy League school had not created a Western civilization curriculum that the gift required. “A lot of fractured relationships hinge on something that a person is perceived to be and it turns out the person wasn’t that way, and I think that’s the crisis for Spelman,” Cunningham said.
Cosby has not been charged with a crime and has denied the numerous allegations by women who say he sexually assaulted them.
Still, the Berklee College of Music in Boston removed the comedian’s name from a scholarship, and the University of Massachusetts at Amherst said Cosby would step down as honorary co-chairman of a $300 million fundraising campaign. Cosby resigned his post on Temple University’s board of trustees following an online petition posted by an alum. “Colleges announce when they receive gifts, but many times not when they give gifts back, so it’s extraordinary for Spelman to come out and say this,” Cunningham said. “Spelman probably got pressure about cutting ties (with Cosby), but it was made easier by the other institutions that had already done so.”
Fisk University in Nashville, which received a $1 million endowed professorship from the Cosbys in 1988, does not plan to end its program, which is named for Cosby’s wife Camille. And Central State University in Ohio has yet to decide if it will return Cosby’s $1 million donation, according to the university’s spokeswoman. The decision would have to come from the university’s Board of Trustees, which meets again in September. Earlier in the month, Central State covered Cosby’s name on a campus sign in front of a building named for him.
For institutions dealing with the fallout of severed gift agreements, it is possible to maintain support from other donors. “We live in an age where reputation is important and very fluid,” said Jarvis, with Commmonfund Institute. “I think the way to approach this kind of issue is to ask what the nonprofit reasonably could have known when they accepted the gift, and it’s that test of reasonableness that most people will apply.”
