Wednesday, November 25, 2020
OSU can lead the way in ending diversion of dollars from scholarship endowments to entertain rich alums: David Marburger and Jeffrey Moritz
Ohio State University has dealt with a lot in the wake of COVID-19. The football season has been cancelled and brought back, they have had to deal with COVID-10 on campus and have even dealt with a $250 million cut in the operating budget. These obstacles have not been easy to overcome for the new president, Kristina Johnson.
Another obstacle that has been lingering in the shadows is that Ohio State University has been spending millions of dollars that come from privately funded endowments. Due to this massive expenditure, a slew of students are paying for tuition that "private benefactors already have supplied the money to pay."
An endowment is essentially a lump sum payment from a wealthy alum to a university. In exchange for the endowment, the university commits to spend the funds on a specific cause.
The universities will invest the payment on order to preserve the original sum (the corpus) allowing the payment to continually generate money for scholarships.
Sounds reasonable right? Well unfortunately, this is not always what happens. Jeff Moritz discovered that his deceased fathers endowment to Ohio State University was "sinking." Moritz retained an attorney to investigate the blunder and hopefully rectify it.
After studying hundreds of pages of public records, it was found that "nearly half of Ohio State University's 300 largest privately funded endowments established over the last 30 years are underwater."
After Ohio State University was put on notice about this terror, they removed the link on its website allowing the public to review such records, stating that the removal of the link was due to "maintenance."
However, it appears that unchecked spending is the actual problem.
See OSU can lead the way in ending diversion of dollars from scholarship endowments to entertain rich alums: David Marburger and Jeffrey Moritz, Cleveland.com, November 22, 2020.
Special thanks to Susan N. Gary (University of Oregon School of Law) for bringing this article to my attention.