One Nonprofit Executive Transition Consideration: Sudden Donor Drop-off

March 14, 2018; Las Vegas Review-Journal

There are a lot of things that can go wrong with a sudden CEO transition—including the loss of funds. This familiar story illustrates what can go wrong when governing bodies are unable to sustain relationships with their executive leaders and those leaders serve as stewards of donor trust.

A donor to the University of Nevada, Las Vegas has rescinded a $14 million pledge to the school after the family foundation heard that its president, Len Jessup is planning to resign amid rumors that he is being forced out. Jessup confirmed he is looking for another post and added, “It’s no secret that a few regents and I have not always agreed on the direction of UNLV under my leadership.”

The Engelstad Family Foundation had pledged the money to the university’s planned medical education building. But as Kris Engelstad McGarry, a trustee of the foundation, said Wednesday, “Part of our proposed commitment to them was predicated on the fact that leadership did not change. We rescinded that grant today. We are completely dedicated to the scholarships we have in place for the undergraduate and medical school students, but we don’t trust the stewardship of the Board of Regents to handle our money, sadly.”

The donation agreement, according to Engelstad McGarry, required that Jessup and Barbara Atkinson, the founding dean of the medical school, retain their leadership positions.

“The way this has unfolded has left us even more concerned with this system and what’s going on with the regents,” Engelstad McGarry said. “It’s a very sad thing when you want to support your local university and they make it very difficult to do so. I think they forget it’s a gift—it’s not an obligation.”

This is not the foundation’s first gift to the school. It has donated millions for scholarships to support student tuition over the new medical school’s first four years.

Regent Sam Lieberman said that though Jessup has accomplished a lot, he hasn’t always done things in a way the regents have liked. “He has allowed people around him to make decisions…but the buck has to stop somewhere, and the buck has to stop with him,” Lieberman said. But one thing Jessup has done is spend lots of time on fundraising, and donors and other important partners support him. “I think that the donors and community leaders will not see this a positive thing if he does indeed seek another job,” Lieberman said.

The first thing we do when examining a situation like this is look at the history of the relationship between the governance body and the executive. Jessup is UNLV’s fifth president since 2007, which means the institution has been averaging approximately one president one every two years. That’s likely why the provision regarding leadership was there to begin with; by lasting more than three years, Jessup has beat the average.—Ruth McCambridge