Golden Rule

The owners of Hobby Lobby, a chain of arts-and-crafts stores, were eyeing a year of strong profits late last year, and they knew they wanted to expand their giving.

David Green, who started the 400-store chain with a $600 loan and turned it into a fortune worth $1.8-billion, according to Forbes magazine, gathered with other family members to pray about their charitable desires, hoping God would provide some direction.

That’s when articles about the financial plight of Oral Roberts University — and a scandal involving its president — began showing up almost daily in the newspapers. The Greens, who live in Oklahoma City, had no relationship with Oral Roberts University, which is two hours east in Tulsa, but they had been impressed with Oral Roberts alumni and students whom they had met through work and church.

When Richard Roberts, the university’s president and Oral’s son, resigned in November amid accusations of misspending and a subsequent no-confidence vote from the faculty, the Green family met with the university’s Board of Regents and offered $70-million if it agreed to radically improve the university’s governance.

“We were coming up this side of the hill, and Oral Roberts was coming up the other side, and we were both shocked when we saw each other at the top,” says Mart Green, David’s son, who played the primary role in negotiating the gift and has since become chairman of the university’s new Board of Trustees.

Strings Attached

The $70-million gift placed the family at No. 27 last year in The Chronicle’s annual ranking of the most-generous Americans. But the gift also came with some hefty strings.

Mart Green, who wanted to see a fresh start at a university that has been plagued by poor decision making, essentially forced the board to vote itself out of existence before he would commit his family’s money to the university.

“We said we’re willing to step in, but we’ll need some changes because we know this is not good stewardship,” Mr. Green says.

The gift prompted skepticism from people on campus who questioned the Green family’s motives. Oral Roberts is a charismatic Christian university, and many students come from churches that embrace miracles, prophesy, and spiritual healing and are not associated with traditional denominations. The Green family belongs to the Assemblies of God denomination, which has 57 million adherents worldwide.

The university’s founder, Oral Roberts, asked Mr. Green straight out in their first meeting if he wanted to turn the university into an “Assemblies of God school.” Mr. Green says he told Mr. Roberts his interest was only in improving the university’s governance and finances.

Oral Roberts’s “biggest concern was the future of the university — that it retain its Christian standards and heart and purpose,” says Ron Luce, a new board member at the university, and president of Teen Mania Ministries, which organizes rallies for Christian teenagers. “He was thinking, ‘Here are these new people — how do I know what’s going to happen?’”

Oral Roberts eventually endorsed the Greens — saying the gift would make the university “better and stronger and larger” — and some students and alumni are calling the gift a miracle.

Influence of Donors

With any large gift, there’s likely to be some push and pull between donor and recipient, but the issue of how much control philanthropists can exert over their contributions has become an especially hot topic in recent years.

In 1995, Yale University returned a $20-million gift from Lee M. Bass, a wealthy alumnus, after he demanded the right to approve the people who would teach the Western-civilization program his gift would have established.

Last year, three foundations created the Center for Excellence in Higher Education, which will work with donors and encourage them to set terms for their gifts to ensure that universities honor their intentions as time passes.

The founders were inspired in part by the Robertson family, which maintains that Princeton University violated the terms of a gift made by their parents. The family is waging a high-profile legal battle to extract more than $800-million from the endowment that supports the university’s Woodrow Wilson School.

But philanthropy experts see few parallels between the gift to Oral Roberts and the negotiations at wealthier institutions over how much influence a donor can have over his or her pet project.

Most administrators and professors here say that Richard Roberts’s strength was running his ministry — the Oral Roberts Evangelical Association — rather than the university.

Yet the university’s old system of governance concentrated power in the “spiritual regents” — Oral and Richard Roberts and their wives. Teachings of the spiritual regents “represent the teachings” of Jesus applied to modern times “and must be followed” by leaders and staff, the university’s old bylaws said.

Rick Fenimore, one of five members from the old Board of Regents chosen to serve on the new Board of Trustees, says that on the old board, either Oral or Richard Roberts initiated the ideas and presented them to the board for approval.

“It was one person directing,” Mr. Fenimore says.

Lawsuit Charges

The lawsuit that set in motion the changes at Oral Roberts was filed by three former professors who said they had been wrongfully dismissed. The lawsuit alleged financial mismanagement and questionable expenditures by Richard Roberts and his wife, Lindsay. (Both have denied any wrongdoing.)

Another lawsuit, filed by a former senior accountant at Oral Roberts, alleges that more than $1-billion per year was funneled through the university, possibly to regents. Most people here find that sum laughable.

“If we knew about a billion dollars, this roof would look a lot better,” says Ralph Fagin, the university’s interim president.

The old Board of Regents had problems of its own. Four televangelists — Creflo Dollar, Jessie Duplantis, I.V. Hilliard, and Benny Hinn — resigned from the old board late last year after the Senate Finance Committee began an investigation into the tax-exempt status of organizations run by several televangelists, including Mr. Hinn and Mr. Dollar.

The organization in charge of accrediting Oral Roberts agreed to renew that status in November amid the campus turmoil, but it required the university to complete a study of its operations by April 2009 in the areas of finances, governance, and leadership.

Renata J. Rafferty, a consultant in Indian Wells, Calif., who works with donors, says all philanthropists have an obligation to make sure their gifts increase the health of the organizations to which they’re giving.

“This donor is absolutely right on in believing that this board was not on top of the game,” she says. “Why would you hand the control back over to them, with an additional $70-million, when they screwed it up the first time?”

During the January board meeting at which the old Board of Regents voted to accept the Green family’s $62-million gift (the family had given the university $8-million two months earlier), Mart Green laid out the terms of his gift. He insisted on a move to shared governance in which the board, the president, and the faculty would all have some power, and the appointment of a new Board of Trustees that would have ultimate authority over all university affairs.

“I said, Guys, guys, listen to me,” Mr. Green says, recounting his pitch to the old board. “If you have to choose between the ideas I shared with you today, or the $62-million, take the ideas. Please hear me: cake, icing. Without the ideas, the money won’t do any good. It will only delay the death.”

Before the old board voted to accept Mr. Green’s plan, it made a change to the bylaws to respond to Oral Roberts’s fear that the university might one day stray from its mission. Trustees can now change the name and purpose of the university — education of the “whole person,” including mind, spirit, and body — only through a unanimous vote of the full board three years in a row.

Mr. Green tapped some of his business associates to serve on the new Board of Trustees, and he worked with Robert E. Cooley, a consultant and a former president of Gordon-Conwell Theological Seminary, to find other board members from the academic world. Mr. Green also agreed to keep five members of the old Board of Regents.

So far, the university has appointed 19 of the 22 trustees permitted by the new bylaws. The old board permitted as many as 44 regents, though only 24 had voting power.

Mr. Green made it through only a year of college himself. In 1981, near the end of his freshman year at now-defunct Tomlinson College, in Tennessee, his father called him with the idea of starting a chain of Christian bookstores. Mart Green returned home and built Mardell Christian and Educational Supply from scratch into a regional chain of 28 stores.

He says he didn’t expect to take a top leadership role at Oral Roberts, but as he began to assemble the Board of Trustees, his new recruits insisted he become chairman. He makes the two-hour drive to campus from his home in Oklahoma City once a week, usually on Fridays. He expects to be heavily involved in university operations for at least another 18 months; the university hopes to hire a permanent president for the 2009-10 academic year.

The new shared-governance concept is already at work. Two faculty members are heading a committee to identify the qualities the university would like to see in the new president.

Mr. Cooley says the terms accompanying the Green gift were not a power grab by the family, but rather an attempt to make sure leadership of the university is shared broadly and placed in the most capable hands.

“Without the gift’s restrictions, the university would have had an extreme uphill climb to right itself and ensure its sustainability,” Mr. Cooley says.

Maintenance Costs

Even with the gift and the governance changes, hard work remains. The university is still $25-million in debt, and its “futuristic,” Biblically inspired architecture suffers from an estimated $60-million in deferred maintenance. Enrollment of undergraduate and graduate students has dropped by about 13 percent, to 3,390, over the past seven years.

The university also must improve a woeful giving rate among alumni — at a time when some alumni may be assuming that the $70-million gift solves the university’s financial problems.

Last year only 6 percent of the university’s graduates donated directly to the university — about half the average giving rate of alumni at colleges of all sizes, according to the Council for Aid to Education — and their gifts amounted to just $763,000. That may be understating the true rate of giving, though, because some alumni give to the university through the Roberts’ ministry.

In February the university started a new campaign in which trustees, including Mr. Green, have pledged to match donations to the university dollar for dollar, up to $25-million, through the end of the year, and use the matching money to reduce the debt. A full trustee match would eliminate the remaining $25-million in debt.

“It’s a big, hairy, audacious goal,” Mr. Fagin says.

Finding an Address Book

To help meet that goal, the Oral Roberts Evangelical Association — which is splitting away from the university — has agreed for the first time to provide the university’s development office with names of ministry donors who designated their gifts for the university. Last year, 12,000 people gave to the university through the Roberts’ ministry.

“It’s like finding an address book that you’ve lost,” says David Wagner, vice president of university relations and development. “We’re anxious to get those addresses and start our relationship-building with those donors.”

Mr. Wagner sees some positive signs. The university raised $240,000 at a homecoming banquet in February — $110,000 more than the university has ever received at the banquet before. An older alumnus called Mr. Green just hours after the matching campaign was approved and said he and 20 other alumni wanted to give the university $1-million.

And Joey Odom, a 2003 graduate who serves on the university’s alumni board, hopes to raise another $1-million from 1,000 young alumni. He concedes it’s a “stretch goal,” but says his e-mail campaign is spreading quickly to potential supporters.

“People who have vowed never to give to ORU are now giving,” he says. “It’s not that they didn’t love the experience there, but they just weren’t sure what was going to happen to their money. Now they know that their money is going to be used wisely.”

The Green family has also supported for many years organizations that translate Bibles and distribute the Gospels around the world. But Mart Green says the family has no immediate plans to make additional large gifts to new charities. After the Greens completed the deal with Oral Roberts, Mart Green turned to his father and asked: “Have we outgiven Grandma yet?”

“No, not yet,” David Green responded.

David Green’s father was a pastor, and the family had little money, but his mother sewed small doilies that could be sold for 50 cents, and put them in the collection plate each week at church.

“My grandmother gave out of what she didn’t have,” Mart Green says. “Her giving impacted a little boy — my dad — and that impacted me, and now it’s impacting Oral Roberts University.”