Donor Withdraws $20-Million Pledge to a Florida University

After Florida International University this month turned down a trustee’s request to stretch out payments on a $20-million pledge so he could save money on taxes, the trustee withdrew the pledge and stepped off the board, saying the university’s president had insulted him.

Herbert A. Wertheim, chief executive officer of Brain Power, a manufacturer of optical chemicals and instruments in Miami, made the pledge last year. The state of Florida had promised to match it, providing the Miami university with $40-million to build a medical school.

“This is truly Herbert Wertheim’s College of Medicine because his support and vision are two of the elements that made it possible for South Florida to get a public medical school,” the university’s president, Modesto A. Maidique, said in September, when the plan to name the institution after the donor was announced. “His investment in the vision helped get us here.”

Under an agreement with the university, Mr. Wertheim was to fulfill the entire pledge within 30 days of the September announcement, but later asked the university if he could stretch out the gift over three years to save what he said would be $4-million to $6-million in taxes.

Florida International officials balked, saying that changing the structure of Mr. Wertheim’s gift risked the $20-million match from the state.

Mr. Maidique explained their concern to Mr. Wertheim, but after a phone conversation between them ended, Mr. Wertheim sent a letter to the university, withdrawing his pledge and resigning from the Board of Trustees. He wrote that Mr. Maidique, whom he described as a longtime friend, had offended him by saying Mr. Wertheim had won the naming rights for the medical school “on the cheap” because the university could get $100-million for the rights.

“We’re disappointed, but these things sometimes happen in philanthropy,” said Mr. Maidique in a written statement about Mr. Wertheim’s decision. He said he expects to raise money from other sources to allow the medical institution to proceed with construction plans.

Before he made the $20-million pledge, Mr. Wertheim had given about $18-million to the university, and a performing-arts center and conservatory were named in his honor to acknowledge those gifts.

Mr. Wertheim says he doesn’t understand why the university wouldn’t budge on the payment schedule. “It was my sense that the university could be more flexible in receiving these funds,” Mr. Wertheim told The Chronicle of Higher Education, saying several trustees had asked him to rethink his resignation from the board. “I still consider [Mr. Maidique] a friend. It’s just that there was no reason for me to lose $6-million.”

Fund-Raising Pressure

Though Mr. Maidique has shrugged off the disappointment, he may be feeling pressure to find other donors quickly — especially because the $20-million pledge was a key reason the state university system’s Board of Governors had approved the idea of locating the medical school at Florida International and not elsewhere in the state.

“The fact that FIU had put together a very strong commitment from the community was a factor,” said Bill Edmonds, director of communications for the university system’s governing board.

The board expects the university to go back to the community to look for other donors to make up for the lost gift, he said. “We don’t want to have to go to the legislature to ask for funding.”

Sumner Hutcheson III, associate vice president for university advancement at Florida International, said that the medical school had raised $5-million from the North Dade Health Foundation, in Florida — and a number of small gifts — to build the medical school. Mr. Hutcheson could not say exactly how much the university hoped to raise for the medical school, but said that John A. Rock, who begins as the school’s dean in January, “will be making those kinds of critical decisions.”