Ending a yearslong saga, Iowa Wesleyan University last week mailed a $45,000 check to a Chicago branch of Volunteers of America, effectively returning an endowment its donor asked be remitted after learning the private college had stopped using it according to his wishes.
“I will make sure the check is prepared as soon as possible,” Wesleyan President Chris Plunkett wrote to donor Scott Humphrey on Feb. 20 — three days after The Gazette reported the Mount Pleasant school was refusing to return the money, citing a portion of Iowa Code it asserted “does not allow for the return of the gift to the donor.”
Wesleyan Vice President for Strategic Initiatives Meg Richtman had said Humphrey had not authorized the school to petition the Iowa Attorney General to allow the money’s return — a claim Humphrey denied and the state Attorney General’s Office said was unnecessary.
Humphrey created the endowment in his father C.E. “Bud” Humphrey’s memory in 2007 to support scholarships for members of Wesleyan’s golf team. For years, he received thank-you letters from scholarship recipients and endowment updates from the school.
But in 2017, after realizing he hadn’t received updates or thank-yous in years, Humphrey inquired and learned the school had stopped awarding scholarships from his family fund at least five years earlier — when Wesleyan started transitioning to an NCAA Division III non-scholarship conference.
The school never told him, though, prompting Humphrey’s request it return the gift.
After years of back and forth, President Plunkett on Feb. 6 suggested he change the restrictions on his endowment to either support golf program expenses or merit scholarships.
Rejecting the suggestions, he wrote back, “I will not acquiesce on the existing restrictions in any way. I’ve made a straightforward request (have the money returned or directed to another charity where the money will be deployed according to our wishes).”
After The Gazette’s Feb. 17 report, Humphrey followed up with the university.
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“We received permission from the AG last week to return your funds, and just this morning received our additional approval through the general counsel of the USDA,” Plunkett in a Feb. 20 email to him. In the past, the U.S. Department of Agriculture has loaned the school millions to help stabilize its shaky financial situation.
In 2018, Iowa Wesleyan nearly closed due to financial woes, announcing it needed $2.1 million to carry on through spring. Wesleyan survived that period thanks to donors and cooperation with lenders.
Humphrey asked Wesleyan to send the money to Volunteers of America. He also requested a fund reconciliation “so I can have a sense of the uses, gains, losses of the fund balance.” But Plunkett four days later told him the endowment managers wouldn’t provide him with one.
“Our endowment funds are commingled in a larger restricted fund,” she said. “It is therefore our policy not to provide individual fund reconciliations due to the added cost to create such a reconciliation.”
She said $11,033 in golf scholarships had been awarded from his endowment earnings — before the NCAA transition — and the fund balance was $44,875 as of May 31, 2019. But the check to Volunteers of America would be for the “full original gift corpus,” she said.
In a statement, Richtman confirmed the institution mailed the check Feb. 26 and said that commingling gifts into a larger restricted fund is common practice.
“From the first time we received Mr. Humphrey’s request to return these funds, we were advised by our lawyers that under the Uniform Prudent Management of Institutional Funds Act, the Attorney General must be petitioned in order to release the funds,” she said. “However, it came to light, in this case, the AG simply felt the situation was clear enough that requiring us to conform with written regulations was not necessary.”
Humphrey said the endowment should have grown with investments despite the scholarship awards, but he was glad to see the gift repurposed for another cause.
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The Humphrey family is “a great supporter of our mission and our veterans program,” Volunteers of America spokeswoman Bridget Hickey said. “They’ve dedicated a room in honor of C.E. Bud as well. We look forward to our continued partnership with the Humphrey family.”
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