July 18, 2017; Courier-Journal
The last shoe may have dropped. After a full board turnover with a dozen new members, the forced resignation in September of the president, James Ramsey, and then that of Ramsey’s top lieutenant, Kathleen Smith, last month, the financial officer at the University of Louisville (U of L) Foundation has finally been terminated. The CFO, Jason Tomlinson’s signature appears on the 2013 and 2014 Form 990s.
We have reported on the ongoing troubles of the college’s foundation for quite a while. Since 2009, the U of L Foundation has been overspending. Their expenses were higher than revenue each year, steadily eating at their endowment. It is a mystery why the financial officer was the last to be let go when the financial woes of the organization were so pronounced. Any year with expenses over income is an anomaly that a nonprofit should address. Seven years of fiscal imbalance is irresponsibility equally shared by staff and board.
The losses for the U of L Foundation, the largest of them in worthless real estate investing and startup companies, are estimated to be over $60 million dollars, according to the university’s outside attorney, Craig Dilger.
Since the foundation’s financial condition has come to light, gifts to the school’s programs have dropped. From 2016 to 2017, the decrease in contributions was 25 percent. The $63 million in gifts for last year was provided mostly by smaller donors. The significant donors who have been generous in the past have stepped back in a wait-and-see position. Those donors include such Louisville foundations as the James Graham Brown Foundation and the Gheens Foundation.
The current board chair, Diane Medley, and the interim executive director, Keith Sherman, have assured the new board members that past overspending and misspending will not happen again. Ex-president Ramsey was able to spend money without any oversight. The most significant bylaw change resulting from the malfeasance prevents the university president from also being the foundation president.
One hopes strong fiscal checks and balances procedures are also being enforced. We have a resource for that, if they should need assistance.—Marian Conway