U Of Chicago Donors Want Their Money Back

A family foundation is seeking the return of almost $23 million, part of a $100-million grant announced three years ago to the University of Chicago to established a world renowned center to study global conflicts.

The Tulsa, Okla.-based Pearson Family Foundation filed suit Feb. 20 in U.S. District Court for the Northern District of Oklahoma, claiming the university breached the original agreement. In 2015, the foundation made a conditional grant of $100 million to The University of Chicago to establish The Pearson Institute for the Study and Resolution of Global Conflicts (TPI) and The Pearson Global Forum (TPGF) at the Harris School of Public Policy. It was the second-largest gift to the university at the time.

Although neither had a direct connection to the university, Thomas and Timothy Pearson directed the foundation to make the grant to honor their family, particularly their mother and father “who had spent much of their lives engaged in peace and social justice efforts among other causes.” Their father, Richard L. Pearson, was a well-known Methodist minister and their mother, Ramalee E. Pearson, a college professor, both deeply engaged in the Civil Rights Movement, nuclear disarmament and other issues of the time, according to the 21-page complaint.

They contend in the lawsuit that as soon as the grant agreement was executed in April 2015, the university “repeatedly and in various ways breached its obligations,” including failure to:

  • Appoint an institute director to run day-to-day operations;
  • Create and/or develop original academic curriculum;
  • Fill four chaired faculty positions with pre-eminent individuals;
  • Provide an acceptable operating plan and budget; and,
  • Hold the first annual Pearson Global Forum.

The foundation is seeking the return of $22.9 million paid so far, which includes $11 million in both 2015 and 2016 and $900,000 this year, according to the suit.

In a statement, the university called the complaint “without merit” and plans to defend itself against what it called baseless allegations.

Since the agreement to establish the institute, the university said it has “created a flourishing institute that has attracted world-renowned scholars and outstanding students to pursue research and education aimed at understanding and resolving global conflicts. In the short time since its formation, the institute has hosted dozens of events, enrolled more than 200 students in courses related to the study of global conflict, and fostered an engaged community of scholars.”

The university was to have appointed an institute director by September 2016, per the grant agreement, and even had a one-year cure period. The university appointed Professor James Robinson as faculty director in June 2016. The lawsuit alleges that just before the cure period was to expire, the university altered the Pearson Institute’s website, without notice to the Pearsons, to change Robinson’s title to institute director.

The grant agreement also stipulated three other appointments of chaired professorships to “attract the caliber of distinguished scholars with the profile and reputation desired.” The lawsuit contends that two junior, non-tenured professions were hired to fill chaired positions who had pre-existing relationships with Robinson that were never disclosed to the foundation.

The University of Chicago was obligated to hold the first annual Peterson Global Forum in October 2018, and the grant agreement allows for a cure period until October 2020. The lawsuit alleges that the university stated that it would not hold the forum in 2018 but rather meet its obligation by involving the institute in the 2018 Irish Catholic Bishops World Meeting of Families Congress. The foundation stated that participation in that conference is inconsistent with the obligation.

The Pearsons approached the university in January 2014 to discuss the possibility of making a large grant to create the institute. They evaluated several leading universities and chose the University of Chicago because “of its representation that it is one of the world’s great academic institutions, and as a learning environment that valued rigorous study driven by data and evidence,” according to the complaint.

The university, in its statement, continued that it has a demonstrated history of responsibly stewarding and administering gifts and grants of all sizes and for many purposes. The university honors its grant agreements with its donors, and it did so with the Pearsons. Further, all academic and hiring decisions are the sole purview of the university and its faculty, guided by the principles of academic freedom.”

The University of Chicago typically is among the top schools in the nation when it comes to fundraising. The institution raised more than $483 million last year, 14th among all universities in the U.S.