Posts tagged ‘Richard Trollinger’

September 13, 2013

$250 Million Gift to a Nonprofit is Withdrawn … Sort of

The news headlines were stunning:

Centre College Loses $250-Million Gift — Chronicle of Higher Education 

Centre College Loses $250 Million Gift After “Market Event” — Bloomberg 

Kentucky College Loses $250 Million Gift from Charitable Trust — Reuters 

There’s only one problem with the headlines: There never was a $250 million “gift” to Centre College!

Here are four lessons you can learn from this amazing public relations fiasco:

1. Do NOT mislead the public.

Perhaps the news media can be forgiven for getting the story wrong. After all, Centre College proudly announced on July 30, 2013: “Centre College receives historic gift to establish Brockman Scholars Program.” The official announcement began:

Centre College has received a gift of $250 million in the form of stock in Universal Computer Systems Holding, Inc. (Reynolds and Reynolds) from the A. Eugene Brockman Charitable Trust to establish the Brockman Scholars Program in Leadership and Entrepreneurship.”

Unfortunately, as recent events have demonstrated, the announcement was not just premature it was not true. The fact is that Centre College did not receive a $250 million gift. Peter Lattman, writing for Deal Book/ New York Times, quoted Centre College President John Roush as saying:

In retrospect, we might have put a big asterisk on this thing, but no one had any inkling that this would come about.”

The historic gift was a contingent pledge based on a complex recapitalization deal Centre College - Old Centregoing through. Regrettably, the financial deal blew up and, therefore, the gift never materialized, according to the College.

If the College had simply delayed announcing the gift until it actually materialized, it could have avoided enormous embarrassment. Alternatively, if the College had simply characterized the $250 million as a “pledge” or “potential gift” rather than a “gift,” it still could have avoided significant embarrassment.

2. Recognize the difference between a “pledge” and a “gift.”

Centre College had a contingent pledge for a $250 million gift. They never had the gift. It’s not a gift until you have the cash, stock, property, or irrevocable gift agreement in-hand.

Because the College never had a $250 million gift, it did not lose $250 million. That’s about the best that can be said of this situation. This is really just a case of a nonprofit organization publicly counting its chickens before they hatched. Don’t make the same mistake.

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