Disenchanted Donor Seeks Return of $1.6-Million Gift

Six years ago, Paul F. Glenn donated $1.6-million to the University of Southern California, hoping

to underwrite biological research that would help unlock the secrets of the aging process.

Last year, he sued the university, asking that his money be transferred to another institution.

His growing disenchantment in the intervening five years is an example of what can happen when disagreements arise between donors and their beneficiaries. Some observers believe that cases like his will be increasingly common in the nonprofit world, where many donors have strong ideas about what they want their gifts to accomplish.

Mr. Glenn, 72, a successful investor, set up the Glenn Foundation for Medical Research in 1965 to explore the biology of aging. Having watched his grandfather die of cancer and having seen other relatives afflicted with osteoporosis, Alzheimer’s disease, and other age-related frailties, he decided to focus his foundation on the kind of basic medical research that might hold clues to all such illnesses.

“Since the major killers were age-related, like cancer and heart disease, I decided that I could be most effective by getting involved in the biology of aging,” he says.

Mr. Glenn agreed to endow a professorship at the Andrus Gerontology Center at the University of Southern California on condition that the chair be held by promising young untenured researchers in the field of gerontology, rotating every three years.

But, Mr. Glenn now alleges, university officials never used any of the endowment money for research on aging. “They’ve admitted that they haven’t paid the money, but they’ve never said why,” he says. “That’s a great mystery.”

What’s more, he contends that two of the three occupants of the chair to date were ineligible for their appointments because they were already on the USC faculty and well on their way to receiving tenure, whereas his intention had been to bring in researchers from outside the university at the start of their careers.

Officials of the university, which disputes the charges, subsequently met with him in an effort to seek some resolution to his concerns. But “their attitude was one of mild hostility,” he says, “and they were not at all interested in explaining why they had not honored the contract,” which he says was formed by oral and written communications with the gerontology-department dean.

The university and its gerontology-department dean “have deliberately defied our intent,” says Mr. Glenn, who wants to withdraw the money from USC and give it to an independent research institute such as the Buck Institute, in Novato, Calif., which Mr. Glenn also helped to establish.

The University of Southern California will “vigorously dispute” the charges in court, says its lawyer in the matter, David M. Roberts, who added that the university’s policy is not to comment on pending litigation. “We believe that USC’s position will prevail.”

Court Reversal

The Superior Court of Los Angeles County initially dismissed Mr. Glenn’s case, agreeing with the university’s contention that Mr. Glenn had made a gift to USC rather than an enforceable contract with it, and therefore had no grounds for a lawsuit. But the Court of Appeal for the Second Appellate District reversed that decision in September, ruling that Mr. Glenn’s oral and written communication with the gerontology center’s dean qualified as a contract, and sent the case back for trial.

Life Changed by an Endowment

To some extent it could be said that Mr. Glenn owes his choice of career to an academic endowment. While he was a student at Phillips Exeter Academy, in Exeter, N.H., he took a business course that an alumnus had endowed, with the stipulation that it be taught by the school’s treasurer and accompanied by a subscription to The Wall Street Journal.

That sparked an interest in business that Mr. Glenn continued to pursue at Princeton, where he was business manager for the college paper, the Daily Princetonian, and at Harvard Law School, where he helped found the Bull and Bear Club, which brought speakers with business and financial backgrounds to the campus. That experience exposed him to commodities trading, which he dabbled in while still at Harvard. After seeing his first trade (in zinc futures) double his money overnight, he decided to abandon law in favor of market trading.

A broker for 18 years, he later began making his own investments in stock and venture capital, amassing enough money to establish his foundation in 1965.

Research supported by his foundation has contributed to many advances in understanding the aging process, he says, including development of a drug that can be used to treat strokes — a topic of more than passing intellectual interest to Mr. Glenn, who recently suffered a mild stroke himself.

But Mr. Glenn’s experience with the University of Southern California has reshaped his views on philanthropy, he says, and shifted his interest away from universities, which he believes are riven with internal politics as professors jockey for external sources of revenue.

“We feel we have a better chance of having our funds used in ways we intended by not giving to endowed chairs that can be misappropriated and misinterpreted,” says Mr. Glenn. “We’ll think twice before giving major donations to a university.”

Rather than give a large lump sum to a university, he says, he’s more likely now to keep the principal in some structure under his control, and designate only the earnings for the institution’s use.

He also is more committed to supporting research through organizations such as the American Federation for Aging Research, which supports scores of scientists around the country who are selected by a scientific panel.

“That means that each year our money is going to different investigators at different medical schools,” Mr. Glenn observes. “It’s a better way for us to distribute our risk and have less of a commitment to one institution.”