USC to receive $260-million gift, one of largest in higher education, underscoring its fundraising strength
USC announced Wednesday that it would receive $260 million for teaching and research, a gift that is among the largest single donations in American higher education and underscores the university’s standing as a fundraising juggernaut.
The gift from the Lord Foundation of California will be used to bolster academic disciplines that study artificial intelligence, big data, analytics and environmental sustainability, said USC President Carol L. Folt. She added that the enormous gift of unrestricted funds, a rarity in higher education, would also help support more student financial aid and faculty research to advance the public good.
“I fully intend to build out a big moonshot initiative in keeping with the spirit of the Lord Foundation,” Folt said."This tremendous distribution of funds provides us with one of the greatest opportunities in our history to think boldly and to invest in cutting-edge and strategic initiatives that accelerate our research and teaching to address major societal issues for decades to come.”
The gift is the largest from a named donor in USC history — two other larger donations were anonymous. It would rank 34th among major gifts to higher education institutions since 1967, according to a tally maintained by the Chronicle of Higher Education.
It comes as USC has had to assure major donors that it is on the right track after a series of scandals in the last few years tarnished its reputation.
The private university was completing the second most successful fundraising campaign in American higher education history — raising $7.16 billion between 2010 and 2018 — when it was hit with controversies involving a former medical school dean who was revealed to have used hard drugs and associated with criminals while in his post.
USC is also facing about 700 civil lawsuits and has already brokered a $215-million federal class-action settlement to compensate former patients of George Tyndall, a campus gynecologist who has pleaded not guilty to criminal sexual assault charges after being accused of sexual misconduct toward many USC students.
In addition, the university has been at the center of a college admissions scandal in which wealthy parents are accused of paying to get their children admitted using fake profiles.
The multiple crises led then-President C.L. Max Nikias to agree to resign in May 2018. Trustees replaced him in July with Folt, the former president of the University of North Carolina at Chapel Hill. She has moved to install key executives, including a new provost, Charles F. Zukoski.
USC officials said it was not clear what impact the scandals had on university fundraising.
Albert R. Checcio, senior vice president for university advancement, said that during the height of the fundraising campaign in 2015 and 2016 the university garnered about $850 million annually. In fiscal year 2017 USC brought in $766 million, decreasing to about $670 million in each of fiscal years of 2018 and 2019, the peak of the scandals.
But he said fundraising during recent years was more than twice as large as USC’s annual take of $300 million before the start of the fundraising campaign, which raised $1.1 billion more than the initial goal. He also said donations tend to taper off in a campaign’s closing years, which is when the scandals were revealed.
“How much was natural? How much was scandal? I wish I could tell you,” he said.
He acknowledged several major donors held back contributions until they saw what reforms the university would make to change the campus leadership and culture. Folt has met with all of them, he said.
“They are impressed with her leadership and transparency,” Checcio said. “The changes in board governance were huge. We have them back in the fold. We are winning back whatever confidence we lost.”
He said the “Trojan family” is uncommonly close-knit, with 40% of undergraduate alumni making donations — the second-highest rate among large campuses in the nation after the University of Notre Dame.
As for the new gift, USC is one of four beneficiaries of the recent sale of the North Carolina-based Lord Corp. Three related foundations that support the Cleveland Clinic, Duke University and Massachusetts Institute of Technology also have received equal distributions from approximately $1 billion of the corporate sale proceeds.
The foundations were created by entrepreneur Thomas Lord, whose father, Hugh Lord, founded the Lord Corp. in 1924. The firm became a global company focusing on noise and vibration control products, electric-mechanical innovations, automotive and aerospace applications and chemical products, including specialty adhesives.
Thomas Lord believed in private institutions as an alternative to government in providing solutions to social and economic problems. In the 1980s, when Lord was planning his estate, he set out to identify geographically diverse institutions that had an emphasis on research, innovation and technology to carry on his legacy, said former Lord Corp. head Edward Auslander, who worked at the company from 1985 to 2019.
“What really impressed Thom Lord and [then board chairman] Don Alstadt ... was USC’s connection between the engineering school and the business school,” Auslander said.
Lord established the foundations supporting the four organizations and gave each of them shares in his company. When the company was acquired by Parker-Hannifin Corp. in April for approximately $3.675 billion, those shares were liquidated and each foundation automatically became entitled to a distribution of proceeds.
Since 1980, the Lord Foundation of California has funded a variety of teaching and research initiatives at USC, including the Girls Who Code Summer Immersion Program, the social enterprise lab and business competition program at the USC Marshall School of Business and the Space Engineering Research Center at the USC Viterbi School of Engineering.
The foundation is expected to distribute the proceeds to USC in 2020 following legally required approvals.
“Quite simply, this is a Provost’s dream,” Zukoski said.
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