Duke, MIT, USC, Cleveland Clinic to Split $1 Billion Gift
November 13 2019 - 11:29AM
Dow Jones News
By Melissa Korn and Valerie Bauerlein
Four institutions have received windfalls of $261 million each
after closely held Lord Corp., a Cary, N.C., manufacturing company,
closed its $3.68 billion sale late last month to Parker Hannifin
Corp.
Duke University, the Massachusetts Institute of Technology, the
University of Southern California and the Cleveland Clinic are
splitting evenly a surprise $1 billion-plus donation as a result of
the sale, which also yielded a hefty payout for the firm's
shareholders.
In the early 1980s, Lord Corp.'s then-chairman, Thomas Lord,
established the Lord Foundations of North Carolina, Massachusetts,
California and Ohio, to benefit Duke, MIT, USC and the Cleveland
Clinic, respectively. Since their establishment the foundations had
given $200 million to the four institutions, but the latest gifts
arrived with little warning.
The institutions' leaders knew in April, when Lord and Parker
Hannifin announced a deal, that they could benefit because the
foundations owned the company stock. But exactly how much they
would get wasn't known until the sale closed Oct. 29. The
complexity of the arrangement would have made it difficult for the
institutions to predict whether a payout might be $10 million or,
as it turned out, $261 million, said Ed Auslander, Lord Corp.'s
former president and chief executive, noting, "It was a great
surprise."
Duke President Vincent Price said it was the largest single
outside contribution to the university endowment since its founding
in 1924. "We did alert the bank to be on the lookout for this wire
transfer just to make sure they did not interpret it as a mistake,"
he said.
Duke plans to use the money to support undergraduate financial
aid, engineering education and research.
The funds come with minimal restrictions, a flexibility that
gives the recipients "the nimbleness to seize opportunities and
address needs that can be hard to cover through traditional
philanthropy," said MIT President L. Rafael Reif.
The payout has been in the works since the early 1980s, when Mr.
Lord toured a number of institutions to determine his philanthropic
giving strategy, Mr. Auslander said. Mr. Lord, who died in 1989,
chose geographically diverse schools with robust business and
engineering programs, as well as the Cleveland Clinic where he had
been treated for arthritis, Mr. Auslander said.
"This opportunity doesn't come very often. I really want to get
it right, " said USC President Carol Folt. She said the school is
still considering how best to direct the money to help with
education and research pursuits. It won't go to a specific new
building or financial aid program, but may go toward programs
related to advanced computational power and analytics, which have
applications in the arts, humanities, science and health care.
Cleveland Clinic Chief Executive Dr. Tomislav Mihaljevic called
the Lord donation, the largest the medical center has ever
received, "a transformational gift." He plans to invest in basic
research and graduate and postgraduate education, particularly in
the fields of immuno-oncology and molecular oncology.
U.S. higher education has entered a new era of megagifts, with
single donations to already-wealthy institutions dwarfing the
entire endowments of other schools. Last November, former New York
City Mayor Michael Bloomberg gave $1.8 billion to Johns Hopkins
University for financial aid, and in September this year, the
owners of Wonderful Co. pledged $750 million to the California
Institute of Technology for sustainability and climate
research.
Seven schools received gifts of at least $100 million in fiscal
2018, according to the Council for Advancement and Support of
Education.
Write to Melissa Korn at melissa.korn@wsj.com and Valerie
Bauerlein at valerie.bauerlein@wsj.com
(END) Dow Jones Newswires
November 13, 2019 11:14 ET (16:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Parker Hannifin (NYSE:PH)
Historical Stock Chart
From Aug 2024 to Sep 2024
Parker Hannifin (NYSE:PH)
Historical Stock Chart
From Sep 2023 to Sep 2024