(Updates with latest ranking in 15th paragraph.)
Sept. 10 (Bloomberg) -- Centre College, a liberal arts school in rural Kentucky, lost a $250 million pledge to fund scholarships after the donor withdrew the gift.
The college, which has hosted two vice-presidential debates since 2000, said in July that the A. Eugene Brockman Charitable Trust was making the gift, the largest ever to a liberal arts institute. Evatt Tamine, who directs the trust, said he informed the college two weeks ago that he was withdrawing the donation because the scholarship program couldn’t be structured in a satisfactory way.
“We couldn’t finalize the terms of the scholarship,” Tamine said in a telephone interview late yesterday. “In the end, we decided it was best to step back from it.”
The trustee’s comments capped a confusing day that began with the college saying the donation had been withdrawn because of a “significant capital market event.” The development also represented a major disappointment for Centre in Danville, Kentucky, which had 1,137 students in the 2012-2013 academic year and was founded in 1819.
The Brockman Trust, which is based in Bermuda and was established by the father of a former student at Centre College, contacted the school at the beginning of July to inquire about making the donation, Tamine said. Michael Strysick, a Centre spokesman, declined to address the trustee’s comments.
By the end of July, the school announced a $250 million gift, which would more than double its endowment, valued at $206 million in fiscal 2012, according to the National Association of College and University Business Officers. The donation would have created 160 scholarships, starting with 40 a year in 2014 for students majoring in the natural sciences, computational sciences or economics.
“That’s a mega gift,” said George Ruotolo, who runs Ruotolo Associates, a fundraising consultant in Cresskill, New Jersey. “Many institutions would use the term transformational.”
The philanthropy involved a transfer of stock that the trust held in Universal Computer Systems Holding Inc., which owns Reynolds & Reynolds Co., a Kettering, Ohio-based automotive software company. In July, the company began a corporate reorganization and refinancing that included a $3.4 billion loan deal that was terminated last week, after Tamine said the donation had been withdrawn.
Thomas Schwartz, a spokesman for Reynolds & Reynolds, confirmed in a telephone call that the closely held company canceled a planned recapitalization, which included a payout to shareholders.
It was a “simple business decision” because the company didn’t want to take on more debt, Schwartz said. He said he wasn’t familiar with a connection to the withdrawn college donation.
John Roush, the college’s president, said in a statement yesterday that the gift was “linked to a significant capital market event, which put considerable time pressure on efforts to structure the gift and the proposed scholarship program.”
“In the end, the parties determined that it was not possible to finalize these matters and get the required approvals from both sides in the time available,” Roush said.
In a phone interview yesterday afternoon, Roush said that the college felt compelled to announce the donation in July after credit-rating companies issued reports about Reynolds & Reynolds’ planned refinancing, which led to speculation on the gift.
“We had every reason to think we were moving along as planned,” Roush said. “We had a commitment on the gift. We’re not happy about the outcome.”
A. Eugene Brockman’s son, Robert Brockman, is chairman of Reynolds & Reynolds and was a Centre student from 1959 to 1961, the college said in July. The college, which hosted the 2000 and 2012 vice presidential debates, was 49th among liberal arts colleges in the 2014 U.S. News & World Report rankings that were released today, up from 52nd place a year earlier.
Former students include John Breckinridge, U.S. vice president from 1857 to 1861, and Adlai Stevenson, vice president from 1893 to 1897 and grandfather of the 1952 and 1956 presidential candidate.
The trust has made a number of donations to Centre College over the years, including a $19.5 million gift for a dormitory that opened a year ago, according to Strysick, the school’s spokesman.
Tamine, who oversees the Brockman trust as the director of the Bermuda-based St. John’s Trust Co., didn’t rule out the possibility that discussions about the donation could be revived.
“It’s a pretty horrendous thing to announce a $250 million gift and then have it evaporate,” said John Cash, chairman of Marts & Lundy, a philanthropy consultant. “In my experience it’s really unprecedented.”
--With assistance from Oliver Staley in London. Editors: Lisa Wolfson, Chris Staiti