KU Endowment Holdings Could Be Lever of Change
Last of Three Part Series
BY CRAIG PARKER
Kyron Staff Writer
Advocates of corporate responsibility are seeking to gain control of "industry."
One way to achieve partial control is to encourage large institutional investors, such as the Kansas University Endowment Association, to use their rights as stockholders to influence corporate activity to be more responsible and in act more in the public interest.
If educational endowments bulk at hefting their economic weight against industry, those in the corporate response must also take an active role in making their resources-proxies, and other rights as stockholders -available to groups who might use them to encourage their own growth.
There are, however, many steps that
may be taken to reform corporate practices while still maintaining, and even increasing, ownership in a particular company.
The KU Endowment Association is an important source of revenue for the University, providing nearly $150 million in building funds and other gifts. On a national level endowment earnings cover the cost of all education funds at the college level.
THE ENDOWMENT Association has additional ventures, such as the three-year Program for Progress in 1966, which insure the continued growth of the university. The Program for Progress collected apportions $1.6 million for the University by 1969.
A 1969 Foley Foundation study "The Law and the Lore of Endowment Funds," cites the importance of maintaining the earning power of endowment funds.
"If endowment funds were taken from them (universities) or if their contribution were seriously reduced, alternative sources in many cases would be simply unavailable. The inevitable result would be the curtailment of operations and a decline in the high level of the nation's educational standards. For this reason it is
mandatory that every effort be made to preserve and if possible to increase the purchasing power of our endowment funds."
porate Information Center of the National Council of Churches, described the situation when outsiders suggest that investments be made socially responsible.
THE PRIMARY purpose of endowment funds is to make much-needed money for the institutions they represent. But another important consideration, which is
"THEY HAVE many answers for those who might ask why." Whitte said. "The answers are not just the answers."
Background Report
the goal of those who favor social responsibility in institutional investments, is at what cost to the consumer, to the environment and to society in general that
Most of these claims, when closely examined, emerge as myths which have been used to justify government policies.
The operation of educational endowment funds is shrouded behind claims of legal limitations and good business practices. Most of these claims, when closely
THE LORE of endowment funds is extensive.
One of the fundamental defensive tactics, employed by corporate management as well as by endowment funds, is the claim of special knowledge or expertise.
who cannot claim any special knowledge in such matters. They are impressively framed as "legal" basis and "good" basis, supposedly beyond the knof of most of us.
Frank P. White, director of the Cor-
A variety of claims have gained credence with regard to the inviolability of principal, the use of capital gains, the donor's intent when giving a gift, and the amount of flexibility allowed under corporate and trust law.
The Ford "Law and Lore" study noted that some groups had suggested the investment of capital gains, to further increase endowment incomes.
“THIS SUGGESTION,” the study said, has repeatedly been met with the response that it was “not a problem.”
capital gains of endowment funds may not be expended, because the principal of endowment funds must be maintained capital gains and capital gains are part of that principal."
The "Law and Lore" study found otherwise.
It said, “... there is no substantial authority under existing law to support the widely held view that the realized gains of endowment funds of educational institutions must be treated as principal. No case has been found that holds that such an institution should not be required to determine for itself whether to retain all such gains or to extend a prudent part.”
A SECOND FORD Foundation study,
"Managing Educational Endowments",
said, "It is our impression that any
educational institution that is willing to
adopt such a program will find a substantial
portion of its endowment unencumbered
by such restrictions.
Those responsible for institutional investment often claim that their hands are in the air.
"The 'Law and Lore' study quoted John Stuart Mill:
"No reasonable man, who gave his money, when living for the benefit of the wealthier," he wrote.
mode of benefiting the community should be adhered to when a better could be found. The study also concludes that, despite the predictions of endowment managers, a failure to follow the requests does not lead to a decline in gifts to charity.
THE FORD STUDY also examined 642 different examples of donor's requests, or instruments. Virtually all donors studied have the same level of gain to be treated, and in most there were no explicit directions set forth about retention or expenditure of either principal
The "Law and Lore" study concluded, "Legal impediments which have been thought to deprive managers of their independence in analysis to be more legendary, than real."
Alternatives for those who seek more of a "moral input" to investment process include: social profile questionnaires to be sent to corporations; research of corporations and programs to educate the public as well as financial institutions; education on stockholder proxies, proposals at stockholder meetings, and stockholder class action suits; and, public divestiture of stock in a corporation.
82nd Year. No. 9
The University of Kansas—Lawrence, Kansas
Friday, September 10, 1971
Kansan Photo by JIM HOFFMAN
Fambrough Blends Optimism with Apprehension, Old Styles with New
What's Cooking This Weekend
SUCH LABELS just don't football in 1971 at the University of Kansas. There's too much of the old and too little revolution to justify the classification.
BUT ONLY "normal" apprehension permeates Fambrough.
Now, after 23 years in a subordinate spot, he's ready to put his team on the field. One would expect such a man, in middle age, finally where he wants to be. He's more, at his alma mater, to head into his first game with apprehension.
"I'm really no different," he said Tuesday in an interview. "You can be just so nervous, I've been through it for a number of years. You get used to it."
New head coach goes back 25 years at KU
Coach Combines Change, Tradition
Instead there's a mix. The change, the freshness are there, but so is a substantial "Rock Chalk Jayhawk," and in the broadest sense.
"The big difference is trying to think about all phases of the game. Before, as an assistant, I was just concerned with one area.
The man responsible for the mix is Don Fambrough, the perennial assistant, who early this year ascended to the head job when Job佩雷 Rodgers left for UCLA.
BY JOHN RITTER
Kansan Sports Editor
Bv JOHN RITTER
You can't really say a new era of football has begun at the University of Kansas even though Saturday a new head coach will take its season opener in Memorial Stadium.
New eras spur connotations of dying tradition, of dramatic change, of inhumanity.
Under Jack Mitchell and later Rodgers
were primed primarily with Jayhawk
lineups.
He was an assistant at KU for 19 years, at intervals since his graduation in 1948. He was first a graduate assistant under J. V. Sikes. A year later he became freshman
HE ALSO HAD a distinguished played career at KU. He enrolled at KU after World War II and played offensive guard and linebacker for George Sauer's teams
FAMBROUGH HAS had plenty of education.
"You always wonder whether you've done everything that needs to be done—whether there's anything forgotten. But you also are concerned with so many arrangements. Things like pre-game accommodations, travel and so on."
Instead he gives the impression that details weigh more heavily on his mind.
NO DOUBT that's what should be said by a new head football coach. But, in fact, Farnbrough gives little evidence to support any claims that he is preoccupied with idealistic notions about the circumstances and implications of his rise to the top.
"No, I'm not really apprehensive. You expect ups and downs. That's football. I don't think I want to win any more now than I did as an assistant. That's true of any coach. Our whole staff wants to win just as badly as I do."
In 1964 he followed Sikes to East Texas State, where he was an assistant for three years. Before returning to Kansas in 1986 he was an assistant under Chalmer Woolard
See Page 8
The 1946 club posted a 7-2-1 record and the next year the Jayhawks finished 8-1-2.
of 1946 and 47 that won conference cochampionships.
See Fambrough, Page 5
Joint Session Hears Speech
Nixon Urges Congress To Protect Dollar Value
WASHINGTON (AP)—President Nixon urged Congress Thursday to help him build a stable economy when he ended the present-day wage-freeze in mid-October.
He called for "bipartisan support in meeting the challenges of peace" and said that the current freeze would be followed by some other system of wage and price stabilization that would be worked out later.
The President's 25-minute speech, which was delivered in the House chamber to a joint session of Congress, was televised and broadcast nationally.
To achieve the goal of a strong peacetime economy, he said, three factors must be taken into account.
NIXON WAS interrupted about 20 times by applanation, which was led mainly by the appearance of a woman applauded enthusiastically when he said, "In the years ahead, we will remain a good and generous nation. But the time has also come to give a new attention to America's
In general, the President repeated his earlier request for removal of the 7 per cent excise tax on automobiles, for more tax incentive for business investment in automobiles and for a one-year advance on a $$$ increase in personal income tax exemptions.
He asked Congress to join him in establishing 'a new prosperity without social injustice.'
HE PROISED to give Congress a new tax program next year.
Nixon gave no hint of what the new economic program after mid-November would be. “We’re going to be more detrimental to the new prosperity in the long run than to put the nation’s great, strong free enterprise system in a permanent strait-jacket of control.”
THE FIRST TWO problems—defense
The President said the reaction of the American people to the new economic policy had been "unselfish and courageous." "The reaction of our trading partners abroad," he said, "has been measured and constructive."
and armed forces cutbacks and the rise in the cost of living—he called "a legacy of war," the third problem, "a legacy not of war," the President said, is to protect the value of the dollar and "to learn once again to be competitive in the world."
He said he was confident that the congress would respond "in a similar pattern."
NEXON WILL start meetings today with a cross-section of business, labor and management.
what will follow the 90-day freeze. AFLCIO President George Meane, a recent critic of Nixon's policies, will be among the labor leaders attending. Friday's session.
The President's budget chief, George P. Shultz, told the House Ways and Means Committee that Nixon's new economic plan included a spending-cut program of $5 billion, a cut slightly larger than earlier estimates.
SCHULTZ, DIRECTOR of the Office of Management and Budget, confirmed earlier estimates that next year's federal deficit might be $27 billion or $28 billion. A major reason, he said, is that tax collections are likely to be $13 billion to $14 billion lower than was estimated in January.
TOPEKA (AP) - Alty. Gen. Vern Miller said today there was no place for a double standard of law enforcement and called for enforcement of laws against drinking on public property, including football stadiums and parking lots.
Miller Asks Enforcement Of State Land Liquor Ban
"The consumption of alcoholic liquors upon state property, especially at football games, has been the subject of some concern to me." Miller said.
"It is obvious that if adults insist on strict law enforcement concerning offenses, the young people quite properly expect their elders to abide by the criminal laws of this country."
"It is fundamental that the criminal laws on the books must be enforced fairly and equally, and that no double standards of enforcement exist."
The attorney general's remarks were in a letter to Dr. Robert Harris, president of the Johnson County Community Junior College.
Similar letters were mailed to the heads of the state universities and colleges and sent to the Governor.
Miller said his office had received a number of inquiries and complaints concerning the enforcement of intoxicating liquor laws on state property.
Miller said he felt certain that once a majority of persons attending athletic events are informed of the prohibition against consumption, they will want to demonstrate to those who are complaining that they are not performing forcement that they themselves are responsible and wish to set examples "for all of us to follow."
Wilson Foundation Suspends Awards
KU has long been proud of its number of Woodrow Wilson Fellowships, but now the Woodrow Wilson Foundation is in financial trouble and, for the first time in 20 years, there will be no fellowships given this semester.
Francis Heller, vice-chancellor for academic affairs, said Thursday that the Ford Foundation no longer gave support to the organization, where more support would come from.
For 18 years the program has run on a national level and KU has been in the top dozen schools in number of fellowships, Heller said.
He said the University of Michigan was the only public-supported institution that had a computer science degree.
Two years ago about 18 KU students were given Woodrow Wilson fellowships. Last year graduate students at KU were given about a third that number, he said.
Heller said that the foundation went ahead and designated Woodrow Wilson High School, and hoped the graduate schools would grant the students scholarships. The National Science
Fourth, the source of the schools could come do that he said. In announcing that the fellowship program be temporarily suspended, H Ronald House, National Director of the Woodrow Wilson National Fellowship Foundation, said, "Funds currently available to the Foundation for first year graduate fellowships are being used to support over 200 Fellows during the 1971-72 academic year.
"Prospects for securing new funds are uncertain. During the coming year, trustees and officers of the Foundation in cooperation with representatives of the academic world, will design a new fellowship program that takes students in graduate education and in the teaching profession, and seek funds for this new program."
Foundation sources started to dry up and the schools could no longer do this, he said.
A total of 213 Woodrow Wilson Fellows will be supported this year at 69 graduate schools. Fellships are being held in reserve for 25 others who have had to postpone graduate study because of military or alternative service.
Other foundation programs will be
To support its programs, the Woodrow Wilson National Fellowship Foundation receives grants from other foundations and contributions from individuals, including over 2,000 former Woodrow Wilson Fellows.
The Wilson Fellowships are only one of a number of programs throughout the country which have suffered from the budget cuts, and which said the U.S. government, which in 1967 supported nearly 1100 fellowships for beginning graduate students, has reduced or eliminated several programs. It will receive about 1,500 new fellowships for 1972-73.
At the same time many state govern-
ment agencies also reduced the amount of
support for the campaign.
continued during 1971-72 and 1972-73. These include the Dissertation Fellowships, the Martin Luther King, Jr. Fellowships and the Graduate Information and Counseling Internships, the Teaching and Administration Intersections, and the National Humanities Series.
As a result of rapid growth of graduate schools, more Ph.D. s have been produced this year than can be placed, Rouse said. The economic recession and the recent wave of anti-academic sentiment across the country have combined to reduce the number of colleges offering for college faculty positions, he said, and as a result of these two factors, the demand for college teachers has dropped just at the time when the supply is increasing.
programs financed by corporations and private foundations have been discon-
While the country may have overreached to the college teacher shortage of a decade ago, there is now the danger that it will similar to the higher education currents, the teachers, by discouraging outstanding students from considering academic careers, Rouse said. "Today's undergraduates who are considering academic career; must look to the new model," he said. "By that time the present economic and political climate will be history."