The interim executive director of the University of Louisville Foundation says that while endowment gifts to the university in the first 10 months of the current fiscal year are less than half of their total from the previous year, he expects major donors will return following next week’s release of the much-anticipated forensic audit on the university’s nonprofit.
In a presentation to the foundation’s finance committee on Tuesday, Chief Financial Officer Jason Tomlinson noted that gifts to the foundation from July 1 through the end of April totaled just over $23 million, which is $30.7 million less than the total received during the first 10 months of the 2015-2016 fiscal year.
Keith Sherman, the interim executive director of the foundation who took over last November, told IL after the meeting that he assumed most major donors are still committed to the university but are waiting to resume writing checks once the audit report is released “and get a sense of what happened and what is happening today.”
“I’m hopeful that once we get a chance to digest that audit report, we’ll at least be able to report back on ‘here’s what was going on, yet here’s where we are today,’ ” Sherman said. “And my hope is that there will be very little, very few things that haven’t (already) been addressed, and those that haven’t, we’ll address quickly. And then the donors can feel much more comfortable and realize that it’s a great time to give again to the university.”
The foundation has gone through a complete makeover in the past year, as a wave of scandals and turmoil led to the forced resignation of James Ramsey last year from his position as president of both the university and foundation. The foundation’s board of directors is made up of all new members except for one since last May and has gone through four different chairpersons since that time, led by Diane Medley since January.
The forensic audit of the foundation’s finances commenced last year — to restore the confidence of the community and donors — and the results are expected to be shared with UofL’s board of trustees at their meeting on June 8.
The foundation’s investment adviser Cambridge Associates informed the board that the market value of the university’s endowment now stands at $789.4 million, slightly up from last month. Due to what the board deemed as overspending by the foundation over the past several years, the market value of the endowment assets dropped over that time, and endowment spending toward the university is considerably lower in the proposed budget that trustees will vote to approve in June.
Tuesday’s meeting also featured several pointed comments by UofL trustee, foundation board member and Papa Johns CEO John Schnatter, which has become the norm in meetings over the past few months.
After asking a Cambridge adviser how much in investment returns they typically aim for in a year, and being told that amount is roughly $30 million, Schnatter added “and (James) Ramsey took a million and a half off the table last year, so he gets 5 percent of the take? Do I have my math right?”
In a later presentation about the foundation’s 990 forms submitted to the IRS, Schnatter noted that Ramsey’s former assistant Kathleen Smith made nearly $500,000 in 2015. “$492,000 for an assistant? That’s pretty steep… As a board member, I’d like to know if we’re paying an assistant $500,000 a year.”
Schnatter at other points asked under which budget line item was “Denny Crum’s $700,000,” referring to the Hall of Fame former UofL basketball coach. Though Schnatter faced much criticism over his recent vague criticism of the UofL Athletic Association leadership, he once again returned to the subject — if gently — asking why athletics director Tom Jurich he was paid additional funds by the foundation.
“I’m crazy about Tom Jurich, but shouldn’t he not be on the foundation, shouldn’t he be on the athletics payroll?” asked Schnatter. Informed by Tomlinson that this is no longer the case, Schnatter added more skepticism over foundation payments.
“I don’t want to micromanage the thing to death, but what I think I’ve learned around here is that you’ve got to follow the money… you just do,” said Schnatter, followed by 10 seconds of silence before the board moved on to the next subject.