Endowing Endeavors--Forever

October 1, 2004

 

Locke: saying yes to the worthy projects

Locke: saying yes to the worthy projects.

Photo: Nancy Pierce

The Duke Endowment contributed more than $300 million to the Campaign for Duke, far exceeding its obligations to the university year in and year out. Elizabeth Hughes Locke '64, Ph.D. '72, who retires as president of the endowment after twenty-two years with the foundation, talks about giving on a grand scale and the nature of a "special relationship."

Is The Duke Endowment in any way affiliated with the university?

No, that's something a lot of people don't realize. People tend to think The Duke Endowment is somehow part of Duke University, and it isn't. It's a completely separate, private foundation, just like the Ford Foundation or the Rockefeller Foundation. We always have Duke people on our board, but we don't have any seats on our board designated for Duke alumni, and our trustees are separate. In fact, when our last trustee was elected, he had to resign from the Duke board of trustees before coming to ours. So, while we share a history, a founder, we're separate entities.

That confusion has been problematic in the past. As recently as the late 1950s, The Duke Endowment's contributions to the university accounted for about 50 percent of its operating costs. And that really hurt the university's fund raising because the normal response from any would-be donor was, "Well, you don't need my twenty-five dollars, you've got The Duke Endowment." People thought the endowment was going to provide everything the university needed forever. The endowment doesn't account for nearly as much of the university's budget now, but that doesn't mean it's cut back its support. In fact, it's greatly increased its support over the years. It's just that the university has increased its costs by so much more.

How does it feel to give away so much money?

It feels great, of course, to be able to say, "Yes, that's a wonderful idea, here's the money, go and do it." But for every time we're able to say yes, there are ten times that we say, "I'm sorry, we can't do that," or, "Your project isn't right for us." So really we're saying no a whole lot more than we're saying yes. And that's not as much fun.

We are somewhat insulated, though, thanks to Mr. Duke's wisdom in setting up the trust indenture. The primary reason we would turn people down is that they are not eligible. And that's easier, of course, than saying, "Your project isn't good," or, "We don't have faith in your organization," or any number of other things you can say that would be very hurtful. Mr. Duke narrowed the field geographically but also by institution.

What was the most difficult "No"?

One situation that's very hard and that happens frequently is when a group of funders, usually local funders, gets together to do something--something good and worthwhile. Somebody will call up and say, "All of us are getting together, and we are pledging to try to help the Special Olympics. And we've got all these pledges. Can we count you in?" And the answer is "No." And that feels bad. It feels like you're not being a team player with your fellow donors, and you're refusing to help something like the Special Olympics or another very worthy cause. That's always hard.

What, in your mind, has been the most meaningful program or project you've been able to fund?

That's hard to say, but, unquestionably, building and establishing and nurturing Duke University from a fledgling school into one of the best universities in the country has been something we are very proud of. We didn't do it alone, but, on the other hand, for a time, I'd say, we did do it alone. Duke would have closed during the Depression if it hadn't been for The Duke Endowment, and it certainly would not have the stature that it has now if it hadn't been for the endowment's consistent and persistent infusions of money. And advice. In addition to supporting the school financially, we have, for many years, advised the university on the development and direction of different programs.

Do you think the image of the Carolinas has changed during your involvement with the endowment?

I think the image of North Carolina as a progressive and economically sound kind of state really started with [former Duke President and U.S. Senator] Terry Sanford, and [former Governor of North Carolina] Jim Hunt. There have been leaders in North Carolina who positioned this state rather favorably. I don't think South Carolina has had the benefit of that kind of leadership, although I certainly have to mention Governor Richard Riley, who was a great leader, a former U.S. secretary of education, and a member of our board for some time. And, accordingly, South Carolina has not prospered.

Now, the popular thing to say, and it's the truth, is that there are really two North Carolinas. You have the urban, middleclass Piedmont in the center of the state--Raleigh, Durham, Winston-Salem, Charlotte, Greensboro--and then, East of I-95 and West of I-85, you have abject poverty. And those were the places that were dependent upon agriculture and manufacturing--both fading industries, which have yet to be replaced. And so The Duke Endowment is trying to help people in these areas. We've recently started a program called "The Rural Program," whereby we try to rebuild the economies of twenty communities in North and South Carolina. It's very exciting for us. We've never tried to do economic development before. It's not in our charter. But the grants are going to our eligible beneficiaries. And I think it's looking good.

How does the endowment identify which organizations it will support and how it will support them?

In the Indenture of Trust that created The Duke Endowment, James B. Duke specified the types of institutions he wanted to support. So the endowment supports Duke every year, and quite generously, but it also has commitments to three other schools--Davidson College, Furman University, and Johnson C. Smith University--and to nonprofit hospitals and children's homes and rural Methodist churches throughout North and South Carolina. That's where Mr. Duke made his money on tobacco and hydroelectric power, and he felt that the money should go back to those places.

And in terms of how it gives that support, the endowment is unique. Unlike most foundations, which designate donations for specific projects, roughly half of our grants are general operating support, meaning they can be used at the recipient's discretion. We do that for all four of the schools, and that's probably among the most treasured money that we give.

So Duke automatically receives a certain amount every year in general operating support without putting in a request for it--and will continue to. But then there's a whole lot on top of that, which the endowment specifies for a particular building or program. That's money that's negotiated, that could go to other causes, to another college or hospital. Duke doesn't want to assume an entitlement that it doesn't have, but at the same time we're not just like any other foundation. We're closer to Duke than that. We have historical ties and a very special relationship.