Following up on my previous posts (links below): Columbus Dispatch, Moritz Family Spreading Word About Endowment Battle With Ohio State:
The family of Michael Moritz is awaiting an appeals court decision on reopening the late Columbus lawyer’s estate in an attempt to sort out a years long disagreement with Ohio State University about how the Moritz endowment has been spent since 2001.
But the Moritz family isn’t waiting quietly.
As the legal battles continue, the family has asked U.S. senators to look into what they believe are unacceptable endowment practices at Ohio State and other universities. They’ve also launched a campaign to publicly call out Ohio State’s actions. ...
Jeffrey Moritz sought to reopen the estate in 2017, after he discovered the $30.3 million gift his father gave to the university in 2001 had shrunk over the years to $21.9 million, a 28% decline. He also found the endowment was only being used for 12 to 16 full-ride scholarships, instead of the 30 mandated in his father’s gift agreement.
The 2001 Moritz gift was intended to endow four faculty chairs and give 30 annual scholarships to law students. In recognition of the gift, Ohio State renamed its law college in honor of Michael Moritz.
University officials said an annual development fee, which totaled about $3 million in 2017, had been taken from the endowment since it was created. Such fees go toward pursuing and entertaining potential donors, and to pay the salaries of university fundraising employees. Ohio State officials have said the use of development fees is a widespread practice among universities with similarly sized endowments and is legal.
The Moritz family disagrees.
“These fees are lawful, and recognized by Ohio law as a ‘prudent’ cost associated with managing an endowment,” Ohio State spokesman Ben Johnson said in a written statement. “Neither (Jeffrey) Moritz nor his attorney have ever offered anything — not a single legal authority, not any example of a different institutional practice — that calls into question the lawfulness or reasonableness of Ohio State’s development practices.”
Prior TaxProf Blog coverage: