Duke University and three other institutions jointly announced Wednesday that they are anticipating a massive, unrestricted windfall from foundations established by an entrepreneur before his death.
Just how much? Those institutions — Duke, the Massachusetts Institute of Technology, the University of Southern California, and the Cleveland Clinic — expect to receive more than $260 million each.
The expected distribution of more than $1 billion is believed to be among the largest single allocations of its kind, according to officials at the four institutions.
It's also unusual because the funds will come without restrictions. Most major donations typically arrive with detailed agreements stipulating how the money may be used.
That means the universities and medical center can target priorities and needs that are pressing but may not be appealing to donors — whether that's basic research, graduate-student scholarships, upgrades to outdated buildings or an ambitious drive to solve a global problem.
The money comes from proceeds of the sale of the Lord Corp., a global technology and manufacturing company established in the 1920s and based in Cary. Thomas Lord, who led the family-owned company until his death in 1989, created foundations to support institutions chosen by him and his successor at the corporation, with funds targeting advancement of education, research, science and technology. The foundations Lord established support MIT, Duke, USC and the Cleveland Clinic.
The Lord foundations have already provided about $200 million to the four institutions since their establishment in the early 1980s.
"For 95 years, LORD Corporation transformed innovative ideas into materials and solutions to move every person in the world," Ed Auslander, Lord's former president and chief executive, said in a statement. "Consistent with Tom Lord's deep-rooted values and social responsibility, he leaves a permanent mark on using knowledge and an entrepreneurial spirit to solve technological challenges, making the impossible real."
Last month, the nearly $3.7 billion sale of Lord Corp. to Parker Hannifin was finalized, triggering distribution of $261 million to each of the four foundations. That distribution, expected to be completed after required approvals, has recipients anticipating an infusion of money.
Most major gifts to universities come from donors interested in a particular topic, said USC Provost Charles Zukoski. "'I want to cure cancer,' or 'I want to advance the studies of ancient Greece.' " In this case, there are no restrictions. "That's what makes this really remarkable and transformative," he said. "It's fabulous."
There's no shortage of ideas that could be explored with an infusion of cash, he said. "What we're looking at with this money is to begin to focus it around a narrow set of topics to have an enormous impact," he said, drawing on expertise across the university, using data science and artificial intelligence to address complicated problems such as environmental issues or challenges confronting the biggest cities. "That will set us up to do something in depth - sort of a moonshot, if you will," he said.
There's debate in the philanthropic world about restricted and unrestricted gifts, said Jacob Harold, executive vice president of Candid, a nonprofit that provides information about philanthropies. Harold said he believes there's a place for both, but giving an unrestricted gift shows trust in an institution. To give a gift of this scale, he said, "you sure better have faith in their management."
At Duke, the entire $261 million will go to the endowment — the largest single contribution to the endowment since the school's founding in 1924. The income generated will underwrite institutional priorities including financial aid for Duke undergraduates, funding for the Pratt School of Engineering building under construction, and support for programs and initiatives at the Pratt School.
"The Lord Foundation's exceptional support for Duke will transform our efforts to address the world's most intractable problems," Duke President Vincent Price said in a statement.
MIT President Rafael Reif said in a statement that "the value of the distribution is magnified because it comes with great flexibility, giving institutions the nimbleness to seize opportunities and address needs that can be hard to cover through traditional philanthropy."
MIT Provost Martin Schmidt said university leaders have been discussing institutional priorities, including support for graduate students and graduate research, upgrading buildings, and accelerating MIT's work on climate change.
Federal support for basic research has diminished, Schmidt said. The funding will allow the university to pursue research that could take decades — and lead to breakthroughs. This will allow MIT to support graduate students who have an idea that excites them and their faculty advisers, he said. And it will allow the school to take steps to make the campus more welcoming and inclusive, he said.
At the Cleveland Clinic, the expected money — more than double the institution's largest-ever single donation — will extend support of research and education, with greater support for graduate and postgraduate education and for basic research in immunology.
The flexibility of the funding will allow researchers to adapt as science and technology change, benefiting patients and caregivers, said Tomislav Mihaljevic, the clinic's chief executive.